Amid Cuts, Government invests £530m In Broadband

The government has pledged to invest £530 million to support the UK’s broadband network and to enable the roll out of superfast broadband in areas that the private sector would not otherwise reach.

In the Comprehensive Spending Review, published today, the government acknowledged that “advances in information and communications technologies have driven productivity improvements across the private and public sectors,” and stated that investment in broadband will ensure that all regions benefit from these potential gains.

Funding from BBC Licence Fee

More than half of the this investment – £300 million – will come from the TV licence fee, with the remaining £230 million to be provided from the government purse. The coalition government proposed this idea back in May, as an alternative to the 50p-per-month broadband levy, which was dropped by the Labour government in the closing days of the last parliament.

Around 2 million households will benefit from this investment, according to the review, including some of the most remote areas of the UK. Superfast broadband pilot projects will also be carried out in North Yorkshire, Cumbria, Herefordshire, and the Highlands and Islands.

However, according to network infrastructure provider ADC, the money needs to be spent wisely in order to future-proof network infrastructure.

“The government’s role is to support operators such as BT, Virgin Media and others to deliver their ‘Superfast’ broadband rollout plans in dense areas, whilst helping to ‘plug the gap’ in harder to reach locations where infrastructure investments can cost much more per connection,” said Mansel Healy, UK Managing Director of ADC UK.

“In order to achieve this, the UK government needs to offer a fair and favourable environment for private investment in network infrastructures, not just by supporting the capital build stage, but by helping to miminise operating costs once the networks are up and running.”

No fibre tax review

Back in August, the government’s Digital Minister Ed Vaizey said there would be no review of the business rates on fibre networks, which some say are the biggest single barrier to investment in next-generation networks. The Valuation Office Agency – which sets business rates for the so-called “fibre tax” – currently forces small operators to pay considerably more than their larger counterparts, making superfast fibre optic broadband networks unfeasible for many smaller ISPs.

“What the government is announcing is effectively subsidising trials and initial capital investment, but increasing running costs through higher taxation of fibre networks,” said ADC’s Healy. “Scrap the ‘fibre tax’ and the country will naturally see greater, faster and cheaper connections to high speed broadband, increasing the impact and effectiveness of the government’s £230 million investment.”

Also in the spending review, the government confirmed that a 2011-2012 date for the much delayed auction of rights to use the 800MHz and 2.6GHz spectrum bands, suitable for delivering the next generation of mobile broadband. Vaizey already announced this back in June, promising that the UK’s mobile industry will “have access to the 21st Century infrastructure it needs to give UK consumers the latest technologies”.

At least 500MHz of public sector spectrum below 5GHz will also be released over the next ten years for new mobile communication uses, including mobile broadband, the review stated.

IT services to cut costs

In his speech at the House of Commons today, Chancellor George Osborne was keen to emphasise the potential of technology to modernise public services and reduce waste, in areas as wide ranging as the NHS and the UK Border Agency.

According to Peter Rawlinson, vice president at AppSense, the spending review will increase the pressure on IT departments within the public sector to deliver value and innovation. “IT is one area where simply cutting spend, or shelving projects is rarely the most effective way to find greater efficiencies,” he said.

“Technologies such as virtualisation have allowed organisations to reduce costs related to desktop and server management while remote working technologies have allowed staff to work far more effectively through their working day. These are two areas where the public sector can find efficiency without having to take any retrograde steps in terms of the quality of service they can deliver to the public.”

Earlier today, eWEEK Europe reported that £650 million has been earmarked for a cyber security initiative, after the Strategic Defence and Security Review highlighted cyber attacks as one of the greatest threats alongside terrorism.

According to Claire Sellick, Infosecurity Europe’s Event Director, this investment lays the foundations for a new period of UK defences, with the battle lines of the future being drawn in the cyber landscape as well as the traditional physical landscape.

“The rapid pace of electronic hackery and espionage, however, is such that crackers will develop new attacks and methodologies that can be employed for fraudulent, and well as terrorist means,” said Sellick. “We’re confident that, with the latest technology at their fingertips, today’s British businesses can better defend themselves against the coming wave of security threats.”