Broadband boost to UK productivity

Ubiquitous broadband access will raise UK economic productivity by 2.5 per cent and GDP by £22bn by 2015, according to research.

The report from the Centre for Economics and Business Research (CEBR) says high-speed telecoms enabling technology will reduce government borrowing by £13bn by 2015, thanks to lower spending and extra tax revenues from a faster-growing economy.

Investment will be £8bn higher as broadband stimulates spending on the necessary hardware and the process of putting services online.

'This is the first proper study of the economic effects of broadband in the UK,' said Douglas McWilliams, chief executive of CEBR.

'We predict that over the next 20 years broadband will have a similar impact on the economy to that of the introduction of electricity from 1890 to 1920.'

The CEBR research was commissioned for the launch of the Broadband Industry Group this week. The group's aim is to campaign for greater competition in the high-speed telecoms market. Its objectives include the introduction of 'cost plus' pricing for wholesale broadband services and a level playing field for all internet service providers.

Founding members are Brightview, Cable & Wireless, Centrica Telecoms, Energis, Freeserve and Tiscali.

• BT has set broadband trigger levels for a further 2300 local exchanges and announced plans to reach 100 per cent broadband coverage by 2005.

  There are now only 600 exchanges, serving around 100,000 households, without trigger levels, which determine the local demand required to upgrade to broadband.

  'The last 600 are disproportionately expensive,' said BT chief broadband officer Alison Ritchie.

  'We've tried to draw a balance between setting triggers to getting broadband to as many people as possible whilst recognising a different approach is needed for the last few.

  'Though the trigger levels we have set are challenging, it is a clear statement of clarity to those areas of what can be achieved by working together,' she said.

  Local campaign groups and Regional Development Agencies have had a significant impact on raising awareness and driving demand for broadband, says BT.