The simple answer from sky's point of view will be yes it can - and in reality it can.
But to be more realistic... it depends on a number of factors.
If you are 4k from the exchange and when you add another 10m on with an extension cable it drops by half then you need to be logical as to why that has happened.
If you go to argos and by a cheap telephone extension cable you will get a thin wire with two cores to carry the signal, this is not the same sort of cable between your house and the exchange.
If however you spend money on a shielded cable (it will have a copper braid surrounding the two cores to stop interference) then you will get a minimal drop in performance because the noise from other electrical appliances is shielded from the signals on the cores within the cable. This is the principle reason why most ISP's ask for the master socket - the 20ft you extend with crappy cable can be way worse than the 4km with proper cable.
So if you get a proper shielded cable for your extension lead, the loss over distance would be no more than adding the loss over the 4k to the exchange your already at.
You pay for what you get lol - it can be that dramatic if you use cheap cable, you can improve it by making sure that you have shielded cable so as to prevent the interference. have a look at
http://en.wikipedia.org/wiki/Twisted_pair
Dont pay more for a cable if its not shielded, but if you pay for shielding then you minimise the noise from appliances and will achieve no worse a distance than if you were connected to the exchange directly. Avoid running a cable next to AC cables where possible and definately not near a pump motor.
Every cable when active will act like an aerial, you just need to shield against it - or add distance so the interferance is weak.