The broadband pricing lot of the rural customer in the UK is not always a happy one, with many often paying significantly more for broadband service than users in towns and cities (BT customers excepted). Pricing isn't the only issue; with general quality and speed of service often cited as comparatively poor. Moreover, Ofcom, the UK communications regulatory body, does not have any power to force these two-tier pricing ISPs to reduce their prices.

Ofcom's recent announcement, however, which states that BT must reduce wholesale prices by 12% below inflation per annum, from mid-August onwards, in areas where it is the only wholesale provider of broadband, will no doubt be welcome news to rural dwellers. The reduction should lead to greater competition among retail ISPs, which in turn will mean lower retail prices for consumers. Ofcom believes that the benefit of the caps will not just be restricted to retail pricing; improvements in service quality may also follow, as ISPs will be able to allocate more bandwidth per customer, and as a result, deliver faster broadband services.

How quickly consumers in rural areas will see the effects of the caps remains to be seen - Ofcom is anticipating that ISPs will start reducing retail prices by the end of the year. It certainly seems to be a step in the right direction

If you're interested in developments in broadband pricing, this is something that Teligen tracks closely though its broadband benchmarking service, T-Connect.