Broadband News

Government response to EFRA Rural Broadband Report

The Environment, Food and Rural Affairs Committee (EFRA) reported to the House of Commons on Rural Broadband in July 2003 and the Governments response is now available for reading here.

While no specific action is immediately evident from the response it does apply pressure to BT with regards the continued roll-out of broadband across the UK. The Government also endorses EFRA's view that more can be done. Moving onto some of the key points:

Apparently BT can now expect letters from various Ministers, "Ministers will write to BT to put forward the view that it is in their interests as a company as well as in the local public interest, for them to be open and transparent about trigger levels, but this must be a commercial decision for the company.". Many people have called for the setting of trigger levels to be more transparent, the biggest call is that the level be published for ALL exchanges, no matter how high. This may give BTs competitors an advantage, but given the remaining exchanges cover around 10% of households then it is perhaps a commercial risk that should be taken to ensure the continued growth of broadband as a whole across the country.

On the issue of cross-subsidising exchanges, it appears that this is now clarified with the position being "This is an issue for Oftel and BT, but the Government is pleased that Oftel has met BT to clarify the degree to which BT is able to cross-subsidise the enablement of exchanges. The Government understands that there is no regulatory rule which requires BT to recover the costs of upgrading an exchange from revenue generated in the area served by that exchange. However, in setting the prices of its broadband products (which it sets on a national basis), BT must comply with competition law and its regulatory obligations. This means, for example, that the products must not be priced below cost with a view to excluding competitors."

One keystone to the Governments current policy on broadband is aggregation of demand, to date this has provided little visible benefit, this latest report highlights that the drive for educational and health care establishments to get broadband should endeavour to allow individuals and private companies to benefit also. This in essence means rather than just adding a leased line to a GPs surgery in a village, the needs of the residents should also be considered.

Various bodies pushing for a universal availability of affordable broadband in the UK, are pushing for the Government to declare Broadband a 'Service of General Economic Interest' (SGEI), unfortunately it has been stated "The Department of Trade and Industry will clarify this area of policy in October by guidance for local authorities. There are no plans to make broadband an SGEI on a national basis.". Declaring an SGEI will potentially reduce the red tape that holds back funding to subsidise roll-outs, but to declare SGEI is to announce a market failure for the service. Declaring a market failure for the whole of the UK may be something that politically people do not want to do, but it is clear that for many areas of the UK the market led approach is NOT working.


Post a comment

Login Register