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BT hopes to show off the potential of its fibre-to-the-premises technology in the new year, with a trial in Suffolk that will push downstream speeds up to 1Gbit/s.

The purely technical exercise in Kesgrave, involving engineers from BT's nearby Martlesham Heath labs, will aim for a downstream speed ten times the 100Mbit/s offered to customers at launch. The upstream needle will meanwhile be pushed to 400Mbit/s.

The trial will move BT ahead of Virgin Media in their largely academic broadband arms race. The cable firm is currently trialling a 200Mbit/s service.

About one third of BT's ongoing network upgrade programme - which BT has so far said will cover two thirds of its universal network - will see fibre optic access points installed in homes and businesses. The rest of the programme will rely on fibre-to-the-cabinet technology, theoretically capable of just up to 40Mbit/s downstream at launch.

Virgin Media is increasing maximum downstream speeds on its entire network from the current 50Mbit/s to 100Mbit/s, by mid-2012. However it only covers around half the country, so for many the BT network is the only option for fixed-line internet access.

Alongside the announcement of its 1Gbit/s trial, BT said today that given the right incentives - ie gigantic taxpayer subsidies - it could increase the coverage of its FTTP/FTTC upgrades.

In a pitch for the lion's share of the subsidy pot, it said: "The government has indicated it will make £830 million available over the course of this parliament and the next.

"Were BT to win funds on that scale, the company's initial estimates suggest that, with supplementary funding, it could extend fibre to up to 90 per cent of UK premises, assuming no unfavourable changes to the investment or regulatory environment."

The government has the earmarked funds to deliver fibre optics to the third of the country BT believes is too sparsely populated to justify purely commercially-funded upgrades. Ministers are obliged to allocate it on a competitive basis and have been encouraging lower-cost, community-run projects.

However, rival firms have criticised tax arrangements that mean it is much cheaper for BT to lay new fibre than for them.

The culture secretary Jeremy Hunt, who will reveal details of the Coalition's broadband plan in a speech on Monday, praised BT's efforts, but also raised hopes of a more level playing field.

"BT has said it will contribute further funding to supplement any of the public money the company may win when we hold tenders for rolling out rural broadband. It's a great example of public funding and initiative stimulating private sector investment," he said.

"I will be setting out on Monday how we can do even more to boost broadband roll-out - by stimulating competition and creating an environment in which business can flourish by removing barriers and cutting costs."

So far the government has set itself the aim of boasting "the best super-fast broadband network in Europe" by 2015. ®

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