UK doesn't need government subsidy for future broadband

The UK's competitive telecoms market can deliver the next generation of broadband, according to Francesco Caio, the former head of Cable & Wireless who led the review.

Next generation access (NGA) will deliver faster services to homes and small and medium-sized businesses, and will be important to ensure that the UK can keep up with the opportunities that broadband brings.

Caio’s review examined the barriers to investment in NGA. He has reported that major players such as Virgin Media and BT are already investing in faster broadband services, and that local communities are also experimenting with new deployment methods.

“The UK and its consumers and businesses benefit from a competitive broadband industry and a rich choice of digital communications and entertainment platforms,” said Caio as he unveiled his report, entitled “The next phase of broadband UK; action now for long term success”.

“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.”

The report say the government should monitor the development of the new networks and support their rollout through measures to lower costs without distorting the market. These include: 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 that spectrum auctions take place soon.

Caio added: “The government needs to play its part across a number of areas in supporting development of NGA. It cannot afford to be complacent.”

Business secretary John Hutton said: “We will consider his recommendations as we plan how to make sure the UK remains one of the world's leading Internet economies. It is reassuring to have evidence of timely investment being made by a broad range of players.

“We want to create the right conditions for private sector investment and stand ready to play our part in ensuring the UK has a competitive infrastructure in the years to come.”

The report: “The next phase of broadband UK; action now for long term success” is available at http://www.berr.gov.uk

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