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No Government cash for next-gen broadband

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Garnet Roach garnet@consumerchoices.co.uk

The telecoms industry will have to raise the cash for any next generation broadband network without aid from the Government, a new report has warned (15-09-08).

Francesco Caio, the former boss of Cable & Wireless who was recruited by the Department for Business, Enterprise & Regulatory Reform (BERR) and the Treasury to look at the UK’s broadband market, said that the case for Government intervention was “weak at best” according to his long-awaited report.

“It is true that the UK has a lower number of homes connected through fibre than other countries, but I think we should take a rather more articulate view of how broadband is used, what there is today and how the system is evolving, as opposed to just counting the number of fibres there are in the ground,” he said.

Britain’s high levels of broadband penetration and strong market competition were cited as reasons not to invest public money. Caio added that next-gen broadband would be a mixture of fibre and wireless networks and noted BT's (www.BT.com) £1.5 billion commitment to next-gen broadband and Virgin Media's (www.VirginMedia.com) forthcoming 50Mb product as proof that competition, not intervention, was the way forward.

“There is little evidence that in the short term the UK is going to suffer from the lack of an extensive next generation access network,” said Caio.

However, he did recommend that the Government help reduce the estimated cost of between £5.1 billion and £28.8 billion by coordinating the digging up of streets and the opening up national infrastructure such so that fibre optic lines can be installed. He also added that the Government and Ofcom should encourage firms to take the financial risks themselves.

A next generation fibre network, replacing the old copper wires currently used for ADLS lines with fibre cables that use light to carry data, would allow speeds of up to 100Mb.

The current average speed in the UK is between 3Mb and 4Mb - though this can vary widely depending on where people live and the length of the copper wire from the local exchange to their home.

Caio’s review, which has been accepted by the Government and welcomed by BT, comes ahead of an Ofcom publication outlining the regulator’s thoughts on next-gen broadband later this month.

Michael Phillips, BroadbandChoices.co.uk product director, said: “If BT’s commitment to invest £1.5 billion in a network that would bring fibre optic broadband to street cabinets that will ultimately connect 40 per cent of the UK - or 10 million homes - is not backed up by further investment, we run the risk of a far bigger digital divide than is currently present in Britain; where around half of businesses and homes are connected to the internet at super-fast speeds of up to 100Mb, while the rest languish on current generation broadband.”

Related article - Boost your broadband speed.

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