Broadband to schools could benefit local homes too

The telecommunications firm has announced plans to extend its own broadband technology to 80% of the country by next year.

Currently around a third of the population cannot get fast net services.

But with the government planning to connect every school and doctor's surgery to broadband, it has huge potential to promote broadband and provide it to homes in the surrounding local communities, said BT.

Government help

It is a massive undertaking and it does take time to look at demand DTI spokeswoman

"Our plea is for government to put their weight behind it [broadband Britain]," said Ben Verwaayen, Chief Executive of BT.

"We are asking the government to use their need for broadband to help normal people get it," he added.

The government has set up local taskforces to look at public sector broadband needs across the country.

Operators will be asked to bid for broadband contracts although the Department of Trade and Industry admits that so far none of these have gone to tender.

"It is a massive undertaking and it does take time to look at demand," said a spokeswoman for the DTI.

If local areas decide to use local telephone exchanges, the government will pay some of the upfront costs, providing BT with an added incentive to upgrade rural exchanges.

Newly available software and fibre links between exchanges has allowed BT to cut the cost of broadband-enabling remoter telephone exchanges and accelerated the rate it connects rural areas to fast net services.

In order to reach its target of one million ADSL customers by the summer, BT has also announced a �2 reduction in the wholesale cost of the technology.

Unhappy ISPs

It is not yet clear though whether this reduction will be passed on to consumers.

It is like giving with one hand and taking away with the other Spokesman for AOL

BT's own service providers are yet to decide about whether to pass on the price cuts.

Other ISPs claim hidden costs are actually increasing the wholesale price.

At the beginning of the year BT reduced the activation fee it charged ISPs from �50 per customer to �25.

It was expected that the three month offer would be extended but BT has raised the amount to its original level.

This coupled with a small increase in the annual cost of renting backhaul from BT means ISPs gain nothing, said AOL.

"It is like giving with one hand and taking away with the other," said a spokesman for AOL.

Businesses will be the real winners from the price cuts announced by BT.