In January 2011 Ofcom proposed charge controls for those rural areas in Britain which are not served by wholesale competition. This is to ensure better value connectivity for areas such as Northumberland, Wales and Northern Ireland as well as the South West of England, Norfolk, Yorkshire, Cumbria and parts of Scotland.
Ofcom proposed significant reductions in the prices that BT Wholesale can charge ISPs in those parts of the country where it is the sole provider of wholesale broadband services. Ofcom has proposed a reduction of between 10.75 per cent and 14.75 per cent below inflation.
The thought is that ISPs, who will now benefit from the lower wholesale prices, should be able to buy more capacity for their customers and lower their retail prices giving the end user better value connectivity.
Hence by enforcing charge controls, ISPs would be able to allocate more bandwidth per customer as a result, which could benefit nearly 3 million home and business consumers. This could narrow the difference between prices that businesses in rural and urban areas are paying for Internet services and perhaps give those businesses in rural areas a chance to increase productivity, and overall make Britain more competitive compared to other European countries.