A Promising Start

The Secretary of State for Culture, Media and Sport, Jeremy Hunt, gave a speech on June 8th on the Government’s proposals to encourage the rapid roll-out of superfast broadband.  Much of the speech re-iterated policies that were originally set out in the Coalition Document in May.  But the tone of the speech was more ambitious than previous Tory positions on Next Generation Access, which have tended towards waiting to see how much the private sector would deliver before intervening. 

 There was a recognition that superfast broadband could create thousands of jobs and that the internet is a key “trading route” for digital content.  Interestingly, Mr Hunt casts aside the doubters by understanding that it’s not about doing things faster, but that it’s about doing “totally new things”, as well as about improving services such as education and healthcare.

The 2 Mbit/s Universal Service Commitment that followed from the previous Government’s Digital Britain report was described as “paltry” and “pitifully unambitious”.  This will now be supported as “the very minimum that should be available” and a proportion of the under-spend from the BBC licence fee will be used to fund this.

The Minister pledged to ensure that those in rural areas do not find themselves on the wrong side of a digital divide due to the fact that they are uneconomic to serve for private sector investors.  He announced three pilot projects for subsidised superfast broadband in rural areas which will help determine what kind of stimulus is required from the Government.  More details about these projects will be announced on July 15th.

The Government is making available £250 million, which is not enough to roll out fibre optic cables to the “final third” of the country.  So it is crucial that that money is spent wisely and targeted appropriately.  One suggestion is that it could be allocated in the form of gap funding to support private sector, public sector and community partnerships. 

It remains to be seen how much financial investment will be provided by the Government, and how much it will rely on its proposals to require existing infrastructure owners to allow access to their networks to deliver high speed broadband.  Ofcom has already announced plans to regulate access to BT’s ducts and poles, and now Jeremy Hunt has stated that he will legislate, if necessary, to obtain access to the networks of other infrastructure providers.  This makes some sense as duplication of local access networks is a luxury we cannot afford.

Some might say that, by scrapping the Independently Funded News Consortia that were to be funded from the BBC licence fee surplus, Mr Hunt has chosen broadband over local news.  (The savings from the IFNC pilots will be used to support the market testing pilots in rural areas.)  But the Minister rightly sees a link between the provision of local news and the availability of high speed broadband.  This has been shown to be the case in other countries (such as with OnsNet in Nuenen, Holland). 

So the Government seems to have grasped the nettle with a bold (though arguably unrealistic) target of having the best superfast broadband network in Europe by 2015.  It remains to be seen how well they deliver.

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About Ayres End Consulting
Telecoms consultant specialising in interconnect, regulation & public policy.

One Response to A Promising Start

  1. chrisconder says:

    Lots of work being done over on http://www.finalthirdfirst.wordpress.com which could help the rollout to the final third. It was interesting to hear yesterday that this government is keen to make sure the ones without access currently aren’t left out of NGA. Hopefully the pilots they are planning will expose some of the misinformation that blighted the digitalbritian report, and show that it is possible to get fibre to everyone at a sustainable cost, and blow away the copper cabal that is currently throttling the innovation in this country in a last gasp attempt to claw back its £9 billion pension deficit.

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