Few can deny that the UK’s rural areas could benefit from improved broadband services. Indeed, if you happen to live in the country or have been to visit somebody who does, you’ll likely have been shocked by the speeds on offer.
It’s an issue that the government know all too well, which is why they’ve made plans to improve broadband for rural areas. However, that is now under threat as TalkTalk branded it “legally questionable”, over plans to allow BT to recover the costs of the upgrades through higher wholesale charges – something which would affect companies like TalkTalk.
The comment came from none other than TalkTalk chief executive Trista Harrison, and is being viewed as a threat to launch High Court action to block the scheme, unless the government’s plans change.
Ms Harrison made her comments after Ofcom announced that the cost of providing effective broadband to 1.4 million homes would add just shy of £2 per line a year to wholesale charges across the country.
For their part, BT have offered to front costs of between £450m and £600m in exchange for the freedom to increase prices. They want to install new technology which will deliver data over long telephone lines at more than 10Mbps, which Ofcom say is the minimum speed that everyday services like Netflix need to operate.
Ms Harrison said: “We fully back the Government’s ambition to give every home decent broadband as quickly as possible, but the current offer on the table is legally questionable, and will be more complicated and more expensive to implement than it may at first appear.
“It’s critical Government and Ofcom stand up for customers, and deliver high speed broadband for everyone, in a transparent and cost-effective way that preserves competition.
“Without a level playing field or properly regulated fibre prices, there is a real risk that investment in Britain’s full-fibre future will be jeopardised.”
TalkTalk have previously claimed that the bill gives BT too much license, and could mean that the annual cost of broadband per line could rise by as much as £20. Ofcom believes it would add just 39p to bills next year, followed by £1.19 in 2019 and then £1.93 in 2020.
Nevertheless, the plans are highly controversial within the telecoms industry. At present, BT’s Openreach division are in charge of hooking up the vast majority of new broadband lines to the network, which has left Openreach customers like TalkTalk and Sky concerned that their own equipment will be squeezed out of local exchanges, increasing their costs. They’re also frustrated that Virgin Media won’t be forced to cover any of the cost, because they own their own network.
Government ministers haven’t yet committed to the plan, but they are said to favour an agreement in broadly the shape of the one discussed. What this could mean for TalkTalk customers is unclear, but increased costs would certainly drive plenty of angry customers towards the contact details for TalkTalk, and at a time when TalkTalk are attempting to revitalise their image with consumers, that would be a dangerous thing.