Government Opens Bidding For £50m Broadband Fund

The British government has released its first instalment of the £530 million it pledged for the rollout of superfast broadband. Local public authorities are being invited to bid for a share of the £50 million fund, which is intended to extend Internet access to areas of the country that are not commercially attractive to Internet service providers.

In the Comprehensive Spending Review, published 20 October 2010, the coalition government acknowledged that “advances in information and communications technologies have driven productivity improvements across the private and public sectors.” It stated that investment in broadband would ensure that all regions benefit from these potential gains.

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. Around 2 million households will benefit from this investment, according to the review, including some of the most remote areas of the UK.

Locally-driven

“We want to have the best superfast broadband network in Europe by 2015 and today’s £50m will benefit up to 800,000 homes and businesses,” said Chancellor George Osborne (pictured), during a visit to HP’s offices in Bristol on Friday. “This is very much a locally-driven process and we encourage bids from all local people with plans for improving broadband in their local area.”

Superfast broadband pilot projects are also scheduled to be carried out in North Yorkshire, Cumbria, Herefordshire, and the Highlands and Islands. Each trial has been allocated a fund of between £5 million and £10 million, although no providers or technologies have yet been chosen.

Culture secretary Jeremy Hunt has already pledged to make the UK the best place for super-fast broadband in Europe by 2015, although this will rely heavily on the private sector. BT has promised to match any of that money which the government decides to put its way.

Hunt also said that the government’s investment would create 600,000 new jobs, based on an estimate by investment body NESTA. However, academics at the London School of Economics put the figure at 280,000, and the Federation of Small Businesses believe fast broadband will add £18 million to Britain’s gross domestic product.

Slow progress

Despite these ambitious plans, the government has been criticised over the slow progress it has made, and Labour MP Ian Lucas demanded last month that the government “pull its finger out” to get the pilot projects up and running.

Meanwhile, BT is in the process of investing £2.5 billion in rolling out fibre to around two thirds of UK homes by 2015. BT believes that the new commitments will make the UK one of the best connected countries in the world for so-called next generation broadband.

The company also recently ran a competition called ‘Race to Infinity’, which promised to provide fibre broadband to the five exchanges that showed the most interest by early 2012. The winning six exchanges were Baschurch, in Shropshire; Blewbury, in Oxfordshire; Caxton, in Cambridgeshire; Innerleithen, in the Scottish Borders; Madingley, in Cambridgeshire; and Whitchurch, in Hampshire.