Recently, several news sources have reported on concerns that the implementation of the Universal Service Commitment (USC) in the Digital Britain Report will result in price variations across the UK in the range of broadband services. This is often pitched as an urban vs. rural battle, without considering the prices consumers currently pay for their broadband services.
The problems of broadband speeds and availability are far from a rural/urban issue but are more complicated. There are many in towns and cities with broadband access problems and equally villages with exceptional broadband services due to the proximity of the telephone exchange. The access speed situation is akin to a postcode lottery across the UK, where the dice was rolled when the General Post Office (GPO) originally located the telephone exchanges when the telephone network was being built.
ThisIsDevon.co.uk is one of a number of publications that discusses the issue of rural consumers being expected to pay more for their broadband, but this situation has existed since 2006. For example, TalkTalk has a surcharge of £15 per month if you are not at one of their 'unbundled' telephone exchanges, which in effect means those in less populated areas will pay more. O2 charges around £10, Sky £17, PlusNet £6 and the list goes on.
So why this variation already? Primarily the costs of providing a service over Local Loop Unbundling (LLU) has allowed providers to deliver cheaper broadband services due to economies of scale which are achievable only in those markets where there is significant demand. In these locations, the pricing regulations on BT's wholesale services make LLU a very desirable option, provided the exchange is relatively close to the major backhaul routes. For providers such as Plusnet who do not use unbundling, the reason for the lower prices is due to Ofcom's definitions of a number of Markets in the UK, and allows BT Wholesale to charge lower prices where the level of competition is greatest.
One big danger is that if we as a nation remain obsessed about price alone and insist on lowest possible price for our broadband is that as we start to go faster, the overall capacity will not be expanded resulting in more congestion at peak time. There is little point in having a 2 meg connection if when you want to use it, its performance is the same as your old 0.5 meg connection. The outrage when average speeds are published shows perhaps that the link between price paid per month and the amount of capacity made available to people at peak times has not being fully explained yet.
We may look abroad and complain that a particular country has broadband at 100 meg for just £4.50 a month and believe the PR that says everyone gets good speeds, but forget that every taxpayer in the country may have already paid for the infrastructure. In the UK compared to other entertainment costs broadband is one of the cheaper elements, with one trip to the cinema with popcorn and drink costing the same as one month's broadband from a wide range of suppliers.