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Britain’s broadband postcode price lottery: the hidden cost of rural broadband

Why is rural broadband so slow and so expensive?

Rural broadband is a different beast to the service users get in Britain’s cities, towns and commuter belts. It’s not only more expensive, it’s slower as well.

Around three million British homes and businesses are in areas where BT is the only ISP supplying broadband or phone services from the local exchange.

In many cases the exchange won’t be upgraded to the current standard of ADSL 2+ broadband technology, or ‘unbundled’ so other broadband providers can come in and fit their own kit. 

There’s no big conspiracy: there just aren’t enough people served by these exchanges to make it worthwhile for BT to make the upgrades or other companies to push for them.

Nevertheless, when they sign up for broadband, these customers often find they’re not in a ‘low cost area’ or they’re ‘off-network’. Aside from BT Retail and a few other providers, they’re usually charged extra by ISPs.

Britain’s broadband postcode price lottery: the hidden cost of rural broadband (Image CC David Hillas)
Plaistow in West Sussex is a classic rural telephone exchange (photo David Hillas)

What do rural broadband users get?

Read Recombu Digital’s guide to Rural BroadbandMost of the UK uses BT’s network only for the ‘last mile’ between the local exchange and their home or business. After that, their ISP takes over, which is why different ISPs vary in quality.

Rural broadband connections use BT’s network for everything from their doorstep to the internet, and ISPs buy a wholesale connection from BT.

For older exchanges, BT Wholesale calls this service IPStream Connect Max and Max Premium: it uses older ADSL Max technology and has a top speed of 8Mbps, against the up-to-24Mbps of newer ADSL 2+ networks.

As rural broadband users know all too well, 8Mbps isn’t a realistic figure: above-average distances to the exchange and the limits of older ADSL tech mean they’re often lucky to get a couple of Megabits. 

To make matters worse, the ‘backhaul’ from your exchange to the internet is often a second-division connection, and there are often monthly download limits as low as 40GB a month. 

There are some exceptions: you’ll get much faster speeds if you’re lucky enough to live in an area that’s covered by a community broadband ‘altnet’ like B4RN or Gigaclear.

What’s more likely is that your exchange will be covered by a government-funded BDUK project, which will see even the smallest local exchanges upgraded to ADSL 2+ over the next few years, and fibre broadband offered in many areas where BT would never bother on its own.

Britain’s broadband postcode price lottery: the hidden cost of rural broadband
Elements of BT’s Wholesale Broadband Access service

Left to right: Main Distribution Frame (MDF), Public Switched Telephone Network (PSTN), Digital Subscriber Line Access Multiplexer (DSLAM), Synchronous Digital Hierarchy (SDH) optical network interfaces, Asynchronous Transfer Mode (ATM) backhaul, Broadband Remote Access Server (BRAS) and handover to the ISP’s network (click to zoom).

Why is rural broadband more expensive?

Quite simply, there’s no competition, so ISPs have to pay whatever BT wants.

Fortunately, communications regulator Ofcom has set strict price controls on IPStream Connect Max and Max Premium in the so-called ‘Market 1’ areas where BT Wholesale is the only option.

In 2011, Ofcom decided that BT Wholesale would have to cut its ratecard prices by approximately 11 per cent below inflation. It’s still more expensive than in other areas, but better than nothing.

Some ISPs make this charge clear by referring to either ‘low cost areas’ or ‘off-network’ services. 

Some, like BE Broadband, just won’t take customers not connected to one of its unbundled exchanges, and a few charge the same for all customers, spreading the extra cost of off-network users across everyone’s bills.

Who doesn’t charge rural Market 1/off-network users more for their broadband?

In most cases, these ISPs don’t have an unbundled exchange network and all ADSL customers pay the same, whether they’re on up-to-8Mbps or up-to-24Mbps.

  • BT Retail
  • Eclipse
  • John Lewis Broadband
  • Post Office
  • Primus Saver

If you should be on this list, let us know via

Who charges more for rural Market 1/off-network broadband?

  • Direct Save Telecom’s out-of-area cost is £14.95/month plus line rental with a 40GB limit, which is worse than its standard £1.95/month unlimited plan, but still competitive.
  • EE charges up to £15/month more if you’re either not an EE, T-Mobile or Orange customer, or you’re not on its network.
  • Plusnet charges an extra £7/month to Market 1 customers, even those on exchanges capable of providing FTTC (fibre-to-the-cabinet) broadband.
  • Sky, which gives away basic broadband with TV (capped at 2GB/month), charges £17/month for its off-network Sky Broadband Connect package with a 40GB download limit.
  • TalkTalk’s off-network broadband costs a whopping £15.32/month on top of its normal prices, with a 40GB monthly download limit.
  • Tesco Broadband charges an extra £10/month for off-network customers who take their line rental, but only £4/month if you get line rental from another provider.
  • Virgin Media National Broadband is an off-network broadband/phone service for those who just love Virgin Media but live outside cabled areas. The basic 40GB-limited downloads service costs £24.98/month including line rental, or £21.99 without. Unlimited broadband costs £29.98/month with line rental or £27.99 without.

Will rural broadband ever get better – and cheaper?

The rules imposed by Ofcom in 2011 mean that BT is committed to improving the bandwidth available, although it started out at a pretty low level.

The average broadband capacity assigned to each user in 2012/13 is a pretty miserly 89kbps, rising to 111kbps in 2013/14. 

Ofcom’s current deal with BT runs out in March 2014, and it will start assessing the market again from  summer 2013, so there’s time to consult and decide how connections should be priced.

Read Recombu Digital’s guide to BT Broadband Rollout UpdatesA lot has changed since 2011: BT has significantly expanded its ADSL2+ network through its own commercial upgrade and the start of government-funded BDUK upgrades. Many more upgrades will come to fruition by 2016, giving more residents a choice of broadband provider.

Yet the Digital Divide is getting wider is other ways: many on-network broadband users in competitive exchanges are now getting totally unlimited connections without a whiff of traffic management. 

Meanwhile exchanges upgraded to support FTTC (fibre to the cabinet) broadband are giving speeds of up-to-76Mbps to urban, suburban and commuter-belt users, widening the gap to the few stuck with purely copper broadband, even if there are fewer of them.

The aim of BDUK is to ensure that everyone in the UK gets at least 2Mbps, although there’s no guarantee how much it will cost in the most remote areas.

It looks like the Last 10 Per Cent will have to look beyond BT to lift them out of broadband poverty. Altnets and community projects will have a vital role to play, but there’s no guarantee every community will be able to muster the leaders or raise the funds they need. 

Read Recombu Digital’s guide to 4G BroadbandMobile broadband will also have a role to play, with O2 committed to providing 98 per cent coverage of the UK population in exchange for its slice of 800MHz radio spectrum.

When all of these projects have shaken out, it’s likely that Ofcom and the government will still  need to step in to ensure no-one is left in the slow lane because they happen to live in the wrong place, or overcharged while the next generation of connections is being built.

Image: David Hillas @ under Creative Commons Licence


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