City versus rural broadband and Ofcom's market 1, 2, 3

March 1, 2009

I have been contacted by Plusnet recently. Plusnet have released two new broadband products – Plusnet value and Plusnet unlimited. Plusnet have encouraged me to update the pricing information on their products (I still need to do this – but am writing this post as I learn what the pricing refers to …. BT’s broadband Market 3 etc. ???).

With Plusnet’s new pricing came references to.

“the cheapest market 3 broadband in the UK”

At this point I am not sure what market 3 means. Read on if you want to follow me on my journey of finding out. Jump to the bottom of the post if you prefer un-pretty pictures.

From what initially sounds like (from Plusnet) two simple broadband products, there is in-fact some confusing pricing that goes hand in hand. It appears that the price you pay for your broadband is dependent on the level of competition in your local area. (I know I am writing a broadband website here but this is relatively new news to me).

It appears that where your local BT exchange houses equipment from other broadband providers, the price you pay for your broadband is lower….. this confuses me and I am sure it will confuse others.

Live in a city – get cheap broadband

Now I may be reading too little into this, but it seems that the only customers that benefit from cheap broadband are going to be customers where companies such as Sky, o2 and Orange are prepared to put in their own equipment to a BT exchange. Now broadband companies are only going to do this in areas where there are large number of potential customers… yes, you guessed it….

“people living in cities still pay considerable less for their broadband than those of us that live out in the country.”

So if you live in a city (or other areas with broadband providers competing for your custom) – good for you – you live in a Market 3 area and can get nice cheap broadband. And, at £5.99 per month, Plusnet Value now provides the cheapest broadband in these competitive areas.

For the rest of us. Expect to continue to pay high prices for you broadband connections. The same Plusnet value product in a ‘normal’ area is £11.99 per month. Not so great.

In case you are interested to know more about the digital divide in the UK. Skim the notes below. If you live in an area highlighted in red, you can get cheap broadband. If you don’t, you’re stuck with slow broadband speeds and high prices. Doesn’t quite ad up does it?

Ofcom descriptions for broadband markets

Under Ofcom regulations introduced in May 2008, telephone exchanges are graded in one of four categories.

  1. Market 1BT Wholesale are the only broadband provider
  2. Market 2Broadband is available from 2 or 3 providers (including BT)
  3. Market 3Broadband is available from 4 or more providers (including BT)
  4. Hull area – broadband provided by Kingston communications

If an exchange is scheduled to offer broadband from 4 or more providers in the future then it’ll be Market 2 if it serves less than 10,000 lines and Market 3 if it serves more than 10,000.

Ofcom broadband map - market 1, 2 and 3 - 2008

Ofcom broadband map - market 1, 2 and 3 - 2008

Comments

Reader's Comments

So far we have 3 comments about the product “City versus rural broadband and Ofcom's market 1, 2, 3”

  1. Ben on September 13th, 2010 12:57 am

    What seems to be quite frustrating is that these market gradings do not seem to be being reassessed as more providers install equipment into exchanges!! My local exchange was in market 2 at the time of the introduction of these regulations but has since, at least in my interpretation, has become a market 3 zone. However, the exchange is still regarded as market 2. Clearly the ISPs are happy to stay hush hush until somebody notices. Is there a defined process for a change of the market grade??

  2. paul murray on May 24th, 2011 9:51 pm

    I live in North Wales and have recently moved to plusnet, I found the ‘market area’ cost very well hidden and it came as quite a shock to see how much my monthly bill was – only a 10 meg download limit too and slow speeds to boot.
    In my area I have used Eclipse, Post office, Talktalk (oh dear) and now plusnet, plus I could use BT and a few others – yet according to Plusnet I am in a market 2 area….4 or more providers market 1 and therefore cheaper? mmm makes me wonder.
    In my personal opinion, Plusnet’s claim’s are inaccurate. For what I am paying them I could have unlimited downloads, better speed, unlimited phone calls and line rental. Not impressed to be honest plusnet.

  3. Stuart Moodey on September 12th, 2011 9:56 am

    I think Ofcom have created a monopoly for BT and other ISP to charge more where there is no competition. This is WRONG! We are moving office 3 miles down the road, from Dunstable to Hockliffe in Bedfordshire, and we get charged an extra £14.40 for the exact same service…This is a rip off and should not be allowed.

    And we thought Ofcom were there to help against theft like this!

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