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Friday, 28 September, 2001, 12:25 GMT 13:25 UK
Cost of broadband net 'must fall'
Sale signs in a shop BBC
Price cuts are needed to boost broadband's prospects
By BBC News Online technology correspondent Mark Ward

BT must do more to help Britain become a nation of broadband net users, the e-commerce minister, Douglas Alexander, has said.

He called on BT to make broadband net services more popular by cutting costs.

Mr Alexander said UK cable companies as well as telecommunications firms in other European nations seemed to be doing more to boost the adoption of high-speed technologies.

The minister's comments followed the release of a draft report by a government group that advises on how to create a nation of speeding surfers.

Price cuts

"The challenge for BT is to follow the example of the cable companies in setting fair prices aimed at bringing broadband to the mass market," said Mr Alexander.

The e-commerce minister Douglas Alexander BBC
Alexander: Wants lower prices
He called on BT to cut the prices of getting high-speed Digital Subscriber Line (DSL) technologies for consumers, businesses, and companies that want to resell the net services under their own banner.

Currently, BT offers DSL services to resellers through its wholesale division. To date, 180 companies, including BT Openworld, are reselling the DSL lines made available through this division.

Only days before Mr Alexander's comments, BT announced that it was halving the cost of installing DSL lines to homes and businesses until the end of the year. Installation now costs 75.

Despite the cut, installation costs of cable modems from NTL and Telewest are still cheaper.

Driving prices down

Mr Alexander said BT must cut internal costs to ensure prices are low when companies start paying for access to BT's exchanges to set up their own DSL services - a process called Local Loop Unbundling.

"We need the industry to be driving prices down, and driving demand up," said Mr Alexander. "BT has a particular responsibility here".

In making his assessment, Mr Alexander drew on a draft report by the Broadband Stakeholder Group, which was set up in March 2001.

The draft report said progress towards creating broadband Britain "has been slow" but it said that problems over the supply of DSL and cable modem access was not entirely to blame.

As much at fault were world economic conditions and questions by consumers about what they would do with a high-speed net connection.

Until the compelling reasons for subscribing to a broadband service become apparent, the government can promote its use by helping schools and local authorities to take up the services.

See also:

02 Jul 01 | dot life
Whatever happened to broadband?
24 Sep 01 | Business
BT chiefs mull total split-up
24 Sep 01 | Business
Speed freaks sign here
05 Sep 01 | Sci/Tech
Pay and play by the hour
08 Jul 01 | Business
Cable giants join to boost broadband
12 Jun 01 | UK Politics
Profile: Douglas Alexander
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