Openreach, the networking arm of Britain’s BT, plans to build gigabit-capable broadband to 3.2 million homes and businesses in rural areas after regulator Ofcom proposed a supportive pricing regime on Wednesday.

The network roll-out is part of BT’s ambition to spend 12 billion pounds on building full-fibre connections to 20 million premises by the mid to late 2020s if it receives the backing of the government and regulator.

Ofcom said it was consulting on allowing a “regulatory asset base approach” for investment in hard-to-reach regions of the country that would allow BT to recover its investment by indexing the cost of slower copper connections and allowing pricing flexibility on fibre.

Openreach CEO Clive Selley said full fibre technology could underpin the UK’s economic recovery from the Covid-19 pandemic.

“Right now, we’re building an ultra-reliable full-fibre network that will boost productivity, cut commuting and carbon emissions, and connect our families, public services and businesses for decades to come,” he said.

“It’s Ofcom’s proposals that give us the right conditions to build commercially in hardest-to-reach areas.”

Ofcom today published updated proposals to help bring faster, more reliable broadband to rural areas, in light of BT’s new commitment to extend its fibre network to a further 3.2 million rural properties.

Today’s proposals are part of the review of wholesale telecoms for residential and business services in the UK. This sets out how Ofcom will regulate BT for the period from April 2021 to March 2026.

Openreach has committed to build fibre to at least 3.2 million rural properties. So Ofcom is consulting on revised proposals on how it will set Openreach’s wholesale prices for these areas. If Openreach does not meet this commitment, Ofcom can set lower wholesale prices in future to reflect this.

Public funding will also be vital in connecting rural areas. The UK Government is planning to invest £5 billion to reach the most challenging 20 percent of the UK.