BT Press Release 13 August 2002

BT TO TRIAL NEW COMMUNITY BROADBAND CONCEPT

BT is to run trials to test a new approach that could bring broadband ADSL technology to small exchanges where previously it was not commercially viable. It will be innovative both in terms of the business model employed and the technology used.

The concept trial, beginning this Autumn, will involve a sponsoring body with a social, development or commercial interest in bringing broadband to specific areas. These sponsors will be Highlands and Islands Enterprise; Gwynedd County Council; Denbighshire County Council, together with IT consultants The ITC (UK) Ltd; the East of England Development Agency; The New Forest Business Partnership; and Omagh District Council.

The sponsoring organisation will team up with a broadband internet service provider of their choice to aggregate demand, source funding and deliver service. The sponsor's contribution will be £7,000 towards the trial of each broadband ADSL exchange unit that supports approximately 16 users. This contribution will cover the length of the six month trial.

Prices for any continuation of service beyond six months, or for a full service should BT decide to go ahead after the trial, have not been set and would depend on the outcome of the trial.

John Davies, chief operations officer of BT Wholesale, said: "We are determined to spread the benefits that broadband can bring as widely as possible, but we have to do so in ways that make good business sense. This sort of innovative partnership approach may well help us do that by unleashing innovative financing schemes, and I am confident we will learn a great deal from these trials."

The trials will also use new broadband ADSL exchange equipment which can use the existing transmission links into BT's internet backbone and can be deployed in much smaller units than currently - serving as few as 16 end users per site but only linking to a single broadband service provider. BT will be working with several equipment manufacturers to develop the concept during the trial.

Details of the trial areas

Scotland: exchanges at Drumnadrochit, near Loch Ness and Muir of Ord, to the west of Inverness will each be equipped to supply broadband ADSL. Highlands and Islands Enterprise will be the sponsor, and they have appointed Scotnet as the ISP on the trial which will bring broadband to small businesses.

Wales: the exchange at Corwen, Denbighshire, will be upgraded to serve 16 ADSL customers under the combined sponsorship of Denbighshire County Council and The ITC (UK) Ltd. Penrhyndeudraeth exchange, near Porthmadog on the edge of the Snowdonia National Park, will be similarly upgraded under the sponsorship of Gwynedd County Council. Broadband will be used principally to service business parks in each area.

England: The East of England Development Agency is sponsoring the inclusion of exchanges at Burnham Market in Norfolk and Shottisham in Suffolk in the broadband trial. In Hampshire, the New Forest Business Partnership, backed by member and technology consultant, Alistair Banks, is sponsoring the inclusion of the Lyndhurst exchange in the trial. Broadband service will be offered to those associated with the partnership during the trial.

Northern Ireland: Omagh District Council is sponsoring the inclusion of Beragh in the trial.

Note to Editors

BT Wholesale has installed ADSL equipment in 1,116 exchanges which serve more than 66 per cent of UK homes and businesses and more than 73 per cent of current internet users. At the beginning of July 2002 BT Wholesale introduced a broadband registration scheme setting demand levels, based on the cost of providing ADSL broadband at individual exchanges, at which further exchanges would be upgraded to provide ADSL broadband services.

BT is committed to widening the reach of broadband and is continuing to explore a range of technologies and business models to help reduce costs and bring broadband to areas where it is not currently commercially viable. These include the trial of mesh radio technology for the delivery of broadband services and trials of high speed internet by satellite.

Initiatives involving regional development agencies and other bodies in Cornwall and Wales have attracted funding which has helped bring broadband ADSL to exchanges where it would have otherwise not been commercially viable. BT is continuing to seek partners to develop further such initiatives.

BT has a target of one million ADSL connections by summer 2003 and five million by 2006. In addition to its own campaign to increase awareness of broadband, BT Wholesale is supporting the marketing campaigns of a range of broadband service provider through an awards scheme.

BT Openworld operates a satellite broadband service which is available across the UK - for information visit www.btopenworld.com/satellite