High charges for rural broadband investigated by Ofcom

Ofcom is to investigate why BT is quoting some people thousands of pounds to get broadband connections.

It follows legislation to introduce a universal service obligation (USO) giving homes and business the right to request broadband with speeds of at least 10 megabits per second (Mbps).

BT's job is to assess the costs of providing a connection.

It said it "strongly disagree with Ofcom's assessment of our delivery of the USO".

Mike Hooper lives in Cumbria, and currently gets 4Mbps broadband speeds. He told the BBC he was given a quote of £152,000 to provide fibre broadband to his home and five neighbouring properties.

Another person, living in south Cheshire - only 2.5 miles from the telephone exchange - told they BBC they were quoted £133,000.

"While the cost of some connections will be high due to the remoteness of any of these premises, we are concerned that BT may not be complying with the regulatory conditions correctly where it assesses excess costs for a given connection," said Ofcom.

"This could result in some customers' quotes for a connection being higher than necessary."

BT said it was disappointed that Ofcom had opened an investigation when "we're fully committed to working with both Ofcom and the government to find better ways to connect the hardest to reach".

It added: "We are obliged to send USO quotes to customers when they request them, and appreciate that for the most remote properties some of these can be unaffordable. We're working hard to enable communities to be able to share the costs of an USO connection to help drive down costs for individuals. We will launch this as soon as possible."

And it pointed out that connecting the last 0.5% of the country remained "a challenge".

It called for a new plan for these "hardest to reach" properties, with other solutions such as satellite needing to play a role.

"We know these are the hardest to reach and most expensive households to connect, where there are real barriers and real costs to deploying broadband, and where further government subsidy may be needed," said Matthew Howett, founder of research firm Assembly.

"Sometimes eye-watering quotes might arise because of estimates made without full engineering surveys having yet been completed. We're still at the early stages of the scheme so Ofcom's investigation may result in useful guidance when calculating quotes for future requests."

The regulator will now gather evidence and plans to decide what should happen next before the end of the year.