The outcome of next year’s General Election will go a long way to deciding the future of British broadband, according to industry experts. Speaking at a Westminster eForum on the future of Britain’s internet, the chief executive of the Broadband Stakeholder Group (BSG) said that broadband policy is split down party lines.
On the one hand, you have Labour’s “industrial activism” which plans to subsidise universal access to 2Mbits/sec broadband and use the 50p “broadband tax” to pay for next-generation networks. On the other, you have the Conservatives’ “market activism”, which will leave the expansion of the broadband network to market forces.
Either way, broadband policy will remain up in the air until the General Election. “We’ve got to accept that there’s considerable uncertainty going forward, especially for the next few months,” BSG chief executive Antony Walker claimed.
That opinion was echoed by Matt Yardley, partner at IT consultants Analysys Mason. “[Lord] Carter’s idea of a fund [for next-generation broadband] was pre-emptive and unusual, but there’s some doubt at this stage whether it’s going to come into being,” he said.
Whoever wins the election, many experts believe that public money will be necessary to bring high-speed broadband to the entire country.
Walker claimed that BSG research showed that the industry alone would only reach 60% of the country with next-generation networks. “As you get into more rural areas, investment gets a lot harder,” he said.
BT painted an even more pessimistic picture. “Investment in fibre is risky and expensive,” Tim O’Sullivan, director of public affairs at BT said. BT has committed to bring fibre to 40% of the country by 2012, but O’Sullivan claimed that there was “no commercial case beyond 40% at present.”
He said the politicians had to make a stark choice. “It boils down to a policy decision,” O’Sullivan said. “Do we as a country want to push fibre to go faster and further than it would naturally? If we do, some kind of financial levy will be required.”
Waste of money
BT rival TalkTalk claims that spending public money on next-generation broadband would be both wasteful and damaging. “We think it’s absolute nonsense,” said the company’s executive director of strategy, Andrew Heaney, referring to the proposed broadband tax. “The last thing you need is the Government wading in and saying ‘we know best'”.
Heaney claimed the Digital Britain team approached the Treasury for £1bn worth of funding for next-gen broadband before the publication of its summer report, but was turned down. “The Treasury didn’t think it was a good use of public money,” he said. “If the Treasury doesn’t think it was a good use of public money, why is it when financed out of the public’s pocket?”
Heaney argued that the broadband tax would discourage companies from investing in high-speed rural broadband, while they waited for public funds to become available