With European and regional aid, BT is to ADSL-enable four exchanges in Cornwall in a pilot scheme which may be extended to other rural areas across the country.
But analysts have warned that the scheme must not become a blueprint for a BT rural broadband monopoly.
As well as upgrading the exchanges, the multimillion pound project will provide business support, hardware and other services, as well as broadband connections.
Previous efforts which simply linked businesses to high-speed internet connections in areas of Wales and Scotland have so far failed to attract large numbers of businesses.
The UK government has refused to provide additional funding to support infrastructure rollout of ADSL.
The initial stage of the scheme connects around 3,000 local businesses in Penzance, Newquay, St Austell and Redruth. An exchange at Truro has already been upgraded.
If stage one, running from January to March, is judged successful, a further eight exchanges around the county will be ADSL-enabled in 2002, bringing broadband to 14,000 local businesses and 93,000 homes.
BT is investing £1.7m, with £5.3m coming from the European Union, around £1m from the South West of England Regional Development Agency, and £2m from a mix of local government and business organisations. The telco expects revenues from businesses to push the value of the expansion to £12.5m.
Experts have welcomed the scheme but warned that Oftel must not let such public/private schemes be used to strengthen BT's position.
"It's low risk for BT, and other schemes haven't been successful," said Alan Pyne, director at telecoms analyst Schema. "As well as hardware, support and training you need the applications that make broadband worthwhile. At the moment it's just high-speed internet access, and how worthwhile is that?"
Pyne added that state aid for infrastructure was probably the only way forward, but expressed fears that BT was simply being handed a rural monopoly. "The regulator must make sure that the access infrastructure is available to more than just BT. And the regulator doesn't seem to have much of a clue," he said.
BT said the programme, called Act Now (Access for Cornwall through Telecommunications to New Opportunities Worldwide), could provide a blueprint for the development of broadband services in rural Britain.
The telco has flatly refused to ADSL-enable any more of its exchanges beyond the 60 per cent of the country it currently covers, unless it either receives state aid or is convinced by local business organisations that it would be in its commercial interests to do so.
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