Culture Secretary Jeremy Hunt is seeking answers from communications providers on ways to improve broadband access across the UK, as the Government prepares for an industry summit day this week.
The news comes as digital champion Martha Lane Fox and Prime Minister David Cameron announced plans to get the poorer elements of society online. The ‘Networked Nation programme’ will help persuade digital refuseniks to access the web, but Hunt wants ideas on how to provide people off the net with the means todo so.
The government’s Industry Day summit this Thursday is expected to be attended by up to 80 companies, and will address the problem of the digital divide in the UK, according to the Guardian.
Back in early June, culture secretary Hunt committed to two main objectives for the Coalition’s policy for broadband. This included making sure that everyone can get at least two-megabits per second broadband by the end of 2012, a speed which he admitted at that time was “pitifully unambitious.” His other objective is to give the UK the best superfast broadband network in Europe by 2015.
In the UK, it is thought that three million households (mostly in rural areas) still cannot access 2 Mbps broadband speeds. And around 160,000 UK homes still cannot get a broadband connection at all – nearly a decade after services were first introduced.
Earlier this month, the government of Finland declared that access to the Internet is a fundamental right for every citizen. In doing so, Finland became the first country in the world to declare that its people all have the right to access a 1Mbps broadband connection. And it vowed to connect everyone to a 100Mbps connection by 2015.
While the industry has welcomed Hunt’s approach, there are concerns how it can be expected to build networks that would not be commercially viable in more rural communities. Possible solutions include Government subsidies to give commercial firms an incentive to invest.
The Government has indicated that it has provided public funding for three pilot projects to subsidise the rollout of broadband into so called not spots. The location of these trials has yet to be released.
Of course the previous Labour administration had sought to fund fibre rollout in rural areas with a broadband tax, which would have made every household with a landline pay an extra 50p per month. The plan was heavily criticised by members of the industry, many of whom said the government’s figures didn’t add up, and it was scrapped shortly before the election.
The Conservative Party believes that the market should drive the investment and Hunt plans on using around £300 million of the underspend on the TV digital switchover to fund broadband rollout.
BT has already committed to investing a further £1 billion in upgrading its network to reach two-thirds of the population by 2015 and giving speeds of up to 40Mbps. Last week residents in a village in Kent used funding from their local council to get BT to rollout fibre broadband to their village.
And back in April, a village in Rutland was also connected to fibre after the community-run Rutland Telecom raised £37,000 to add its own a cabinet to the BT network. In November last year residents in Alston Moor in Cumbria announced that they are digging their own trenches in order to ensure their Parish enjoys superfast speeds promised by fibre. And prior to that in August an RNLI crew in rural Humberside literally dug their own highspeed connection.
Virgin Media confirmed last month that it is talking with utility companies to expand the UK footprint of its fibre optic network. Its cable network reaches approximately 12.7 million homes in the UK, which is a little over 50 percent of UK homes.
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As Martha Lane-Fox has rightly pointed out in her “manifesto”, broadband – and access to it - is critical in the modern era and its benefits are both to society and businesses.
But, in order for it to become reality, the regulators need to quickly develop a framework where private capital is encouraged to invest because without this framework, consumers will not get high-speed broadband, and businesses will face stunted economic and technological growth.
Strategic plans for the next 10 years for nearly every industry will incorporate the need for high-speed broadband networks, irrespective of whether or not an enterprise is business-to-consumer or business-to-business, and therefore the more homes that can interact over broadband the better.
We see that clearly in the Google and Apple iTunes offerings, but even bricks and mortar companies will want to distribute computing power to the Cloud, as well as empower workers to work remotely for employee satisfaction and lower operating costs.
But infrastructure critical for business success and the overall desire for broadband can only be achieved if it is matched with appropriate regulation. And that is where the plans fall short.
For the past few years, the U.S. government has spent approximately €4.7 billion Euros per annum to support broadband infrastructure and augmented that with a €5.7 billion Euros stimulus program. Meanwhile, the EU spends approximately €5.5 billion Euros annually for broadband. Good levels of investment, but only about 15 to 20 per cent of what is needed for Universal Service.
Both the EU and the U.S. want to see facilities-based competition in broadband. As a result, they are demanding that new fibre networks be open for use by other providers.
However, this puts the return on the fibre investment for private companies in question, and has resulted in a slowing of capital investment in broadband.
Here in the U.S., where Verizon FiOS (Fiber Optic Services) has probably the most advanced and compelling set of broadband services over any fibre network, capital spending has been slowed in light of this movement to “open to competition” regulation.
(It should be noted that Verizon only started to invest in building FiOS when they received regulatory agreement that they would not have to share the network).
It is admirable that Martha Lane-Fox is advising the Government on these matters, but Government needs to act on regulation, because without it, Martha’s ideas will not get off the ground.