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BT has been given the green light by Ofcom to start work on a £1.5 billion fibre-optic cable broadband network.

Speeds are expected to reach up to 100Mb after work has been carried out, with ten million households earmarked for access by 2012.

Discussions with the communications watchdog have centred on BT's ability to make its money back through the wholesale of parts of the future network.

Communications minister Lord Carter, who penned the recent Digital Britain report, has also indicated that he expects Virgin Media to follow suit and divide up parts of its 50Mb network for wholesale to fellow providers.

Testing has already got underway for BT's new service, which will use a combination of fibre-to-the-home and fibre-to-the cabinet technology.

Whitchurch in south Wales and Muswell Hill in north London have been chosen as the first locations to receive BT's new super-fast offering.

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