AOL puts £10 premium on BT broadband

 

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By Simon Aughton

Posted on 23 May 2007 at 16:33

AOL broadband services will now cost £10 more in areas where the company's own LLU service is not available. In these exchanges, AOL instead buys capacity from BT. The development will give extra weight to concerns that the advent of LLU-based broadband services could widen the UK digital divide.

The increase in price for new customers is not entirely surprising, as its new owner, Carphone Warehouse, also charges lower prices for its TalkTalk phone-and-Internet service where it has installed its own kit in BT exchanges. But the amount of the discrepancy is surprising.

Outside the scope of AOL's 300 plus LLU exchanges, the Broadband Silver up-to-2Mbps service will cost £24.99 while the up-to-8Mbps Broadband Platinum will set new subscribers back £39.99, which, as thinkbroadband points out, is a 'pretty high price for a product that while labelled as unlimited does have a fair usage policy'.

What's more, AOL is now requiring a minimum 18-month contract, though it does throw in a free wireless router.

As things stand existing subscribers are not affected.

By 2005 talk of digital divide in the UK had largely been silenced. BT may have taken some time over it, but having - some would say belatedly - woken up to the scale of demand for broadband it eventually enabled ADSL Internet connections across almost the whole country. Since then, the advent of 8Mbps services, LLU and ultimately ADSL2+, has opened a new divide, where households in built-up areas get faster speeds and lower prices.

BT recently cut the price of its wholesale broadband products to make them more competitive with LLU, though for AOL this clearly was not enough. The worry is that other ISPs may feel encouraged to follow suit.