People in rural areas are losers in broadband postcode lottery

Millions of broadband customers across Britain are being penalised just for living in the ‘wrong’ area, reveals uSwitch.com.

The independent price comparison and switching service said depending on where someone lives can mean they can pay a minimum of £10 a month more for broadband services.

It named internet service providers (ISPs) such as TalkTalk, Sky, UK Online and Virgin Media as guilty of differentiating both the price and speed of their broadband services for some areas in the UK.

This ‘two-tier’ pricing system is particularly evident in the more sparsely populated rural areas because these customers often fall outside an ISPs local loop unbundling (LLU) network.

Installing their own equipment into BT exchanges means broadband companies have been given more flexibility over the costs and speeds they offer their customers. The result has been a wave of highly competitive deals as companies have aggressively sought to sign up as many new customers as possible in a very short time frame

However, of the UK's 13 million broadband connections, only 1.5 million lines are unbundled and just 45 per cent of the population can access the cable network.

So while broadband prices fell by up to 17 per cent last year and are continuing to fall, this is not the case for many customersb who fall outside an ISP's LLU network because it is not economic to introduce LLU to these households.

The result according to uSwitch is people in rural areas are effectively classed as ‘second class citizens’ in the eyes of the broadband operators.

Now AOL has announced it is introducing two new tariffs, with customers outside its LLU network paying £10 a month more for its services. USwitch warned ISPs were creating a new broadband 'class system' and called for a halt to what it terms 'this postcode lottery'.

Steve Weller, head of communication services at uSwitch said: “The new tariffs introduced by AOL bring into sharp focus the digital divide that is forming between LLU and non-LLU households.

"Unfortunately, AOL is not the only company to penalise households not falling within their unbundled network. Rural areas tend to be the ones being neglected by the LLU roll-out.

"With a lower number of homes to every exchange, broadband providers aren’t able to claw back enough value out of their investment, so instead have concentrated on unbundling areas with a higher population density.

"People living in the country are effectively second class citizens in the eyes of the broadband operators. It’s simply not acceptable that one customer may be paying £19.99 a month for a service of up to 1Mb yet their friends down the road could be paying just £14.99 for a 2Mb service – as is the case with UK Online - just because their postcode happens to fall under their provider’s LLU hit list."

From 22 May, AOL will offer customers living within its LLU network a 2Mbit/sec service for £14.99 a month and an 8Mbit/sec service for £29.99. Customers living outside the LLU network will be offered the same services for £24.99 and £39.99 respectively.

uSwitch said AOL was potentially reducing the attraction of the deal for 40 per cent of the population. Although it said it was fortunate that companies such as Orange, Tiscali and Pipex were not "succumbing to this regional discrimination policy" it warned there was nothing to stop them.

"Who’s to say they won’t jump on the bandwagon soon? We are calling for this new ‘postcode lottery’ practice to be halted in its tracks before other providers join in, denying more consumers the chance to benefit from the great deals that are currently out there," said Weller

People can use the uSwitch.com postcode checker on the website to find the best deal depending on where they live or call 0800 093 06 07.