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Case for public intervention in next generation broadband weak
Friday 12 September 2008 13:31:42 by Andrew Ferguson

UK Broadband has always been a largely commercially led beast, but there are parts of the UK where government and EU money has helped when costs meant that private companies would otherwise have ignored the area.

The much anticipated report by Francesco Caio for the Department for Business Enterprise & Regulatory Reform has now been published, a short summary can be read on, with the final report available as a PDF download.

"The UK and its consumers and businesses benefit from a competitive broadband industry and a rich choice of digital communications and entertainment platforms.

Although demand for bandwidth and Internet traffic continues to exhibit strong growth, 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. I have therefore concluded that the case for a public intervention at this time is weak at best. But it is the right time to create the conditions that will deliver a competitive NGA infrastructure in the next five years"

Francesco Caio commenting on the report

It seems that the approach recommended is for government to keep a hands off approach to the next generation network roll-out, so whether this will have an impact on the regulatory authority Ofcom is unclear. To date Ofcom appears to be taking the position that the BT Group should offer some form of equal access to any fibre network, and even Virgin Media appear to be under some pressure to provide wholesale access. What seems likely is that the regulations on equal access from Ofcom will fall into the area of creating the right conditions, i.e. there will be controls over how the private companies operate their networks to avoid the emergence of an all powerful monopoly.

A number of recommendations are also contained within the report:

  • Supporting the development of local access networks by helping them organise and develop common standards;
  • Allowing NGA to be delivered over new overhead lines, by relaxing rules that currently prevent this;
  • Working with the construction industry to ensure all new homes have next generation broadband; and
  • Supporting Ofcom to ensure spectrum auctions take place soon.

The UK as a whole spends some £46.6bn a year online, which is around 15% of the total retail spend in the UK. So to some extent it would seem current broadband model is working since we can spend so much money using it. Perhaps it is part of our national psyche to just moan about broadband speeds, with broadband complaints replacing weather as the national moan topic. We spend some 34.4 hours a month online compared to 24 hours in Europe and 31.4 hours in the United States.

So what can we expect in terms of broadband in the next five years? Well it looks like if you live in what is largely defined as an urban area that you'll have the choice of at least a 50Mbps connection but whether the price will be attractive to millions is a great unknown. For those living in market towns, then they may see some efforts by local bodies such as councils and RDA's subsidising infrastructure in an effort to compete with other towns. For those in villages or more rural areas, then it seems it will be a case of waiting for it to be proved that commercial operators will never bring faster connections, so the message is either move your business or home to a nearby town with better connectivity if you need it, or roll your own in the form of a community broadband solution.

For those wanting a very short summary, if you can only manage a 0.5Meg or maybe 1Meg connection now, and don't already have the option of an ADSL2+ provider in your area, then your broadband speeds are not likely to improve for some years.


Posted by doowles over 8 years ago
I've just read a story about Amsterdam getting fiber to every home(a third government funded), then I read about the uk "do nothing" approach and wonder why we even bother talking about it.
Posted by bezuk over 8 years ago
People should be a little cautious about assuming that anyone living in an "urban area" can get cable - I've lived in four fully cabled towns over the last five years, but each time in a block of flats, none of which had the wiring and no option to have it put in. I imagine people living in such flats is a significant % of the "urban" population.
Posted by Frank22 over 8 years ago
i am living a stone throw away from Gatwick airport, rumoured to be the 2nd busiest airport in the world, my neighbour is BT Broadband Head Office, and my broadband connection is limited to 1mbps. Friends in living in other European countries are laughing. How can the UK be so far behind and not even have plans to do anything about it?
No need to wait for expensice and lengthy reports. Simply contact friends in other European countries and you will get the message straighaway!
Posted by comnut over 8 years ago
bezuk: The problem about blocks of flats is that it is not owned by the same people as the high street/pavement is.... the owner of the flats has to first PAY to get this installed..

Posted by comnut over 8 years ago
Frank22: Size and 'fame' does not get good fast BB.. Distance from the exchange, space in that exchange, and the ability of your ISP to provde 'good kit' is what does it..

And I would say that size makes a company slow and unresponsive, and 'fame' makes them overconfident, and ignore users...
Posted by comnut over 8 years ago
You can try making a mobile call(to your friend standing next to you!!) while being right next to the biggest phone mast in london, but it will still take a long time to get the call connected! (congestion!!)

Tests have proved that to get a fast connected call you have to be in an uncongested area like deep in the country, miles away... (where almost no-one is using the nearest transponder!)
Posted by chrysalis over 8 years ago
I think its down to a simple decision do we (a) want a broadband infrastructure to be proud of that supports businesses outside the m25 as well as inside. or (b) want it to be a cash cow for private entities only and as such leave it to commercial viability.
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