A new proposal from industry regulator Ofcom may result in reduced broadband prices for three million rural homes.

Under the measure, the price of broadband would be cut between 10.75% and 14.75% below the inflation rate in places where BT Wholesale is the only available provider. Ofcom has said that the measure comes as an acknowledgement that prices in rural areas have not been forced down due to competition.

Currently, a range of internet service providers offer broadband service to rural customers, however they are all sourced from BT Wholesale. Now Ofcom hopes that if prices were reduced it would provide both higher levels of competition for rural consumers as well as a better quality of service than many are currently receiving.

Meanwhile, BT has responded by saying that it agrees that a wholesale price regulation system should be put into place in rural regions, however it urges that such a device should not deter its investments. A BT spokeswoman said that the key was to find a balance between incentives for investing in rural areas and the ability to control prices.

According to Ofcom officials, the measure would benefit almost 12% of households in the United Kingdom, most of which are located in rural regions of Wales, Scotland and Northern Ireland as well as in southwest England, Northumberland, Norfolk, Cumbria and Yorkshire.