Could recession force government U-turn on optical-fibre rollout?

Is government considering cash for optical-fibre rollout?

Communications minister Lord Carter has hinted that the government could rethink its decision not to put significant funding behind an optical-fibre rollout in the UK to support next-generation broadband.

Speaking at a joint Westminster eForum and Westminster Media Forum seminar today, Carter acknowledged that the current economic crisis could adversely effect telecoms companies ability to raise funds to invest in high-speed network infrastructure.

"It is clear there are many other countries in the world taking a completely different view of the role of infrastructure as an essential part of an economy and the role of government in the provision of that infrastructure," he said.

Carter also implied that his forthcoming Digital Britain review will look at the need for universal broadband provision using a combination of fixed-line and mobile communications.

"Today we are way beyond the view that broadband is a niche product, it is an enabling and transformational service and therefore we have to look at how we can universalise it," he said.

Government strategy on broadband delivery by optical fibre was set out in Francesco Caio's report, produced last autumn. The report said that public money should not be used to fund an optical-fibre rollout, a view endorsed by Ofcom after its consultation into the issue, which also suggested the way forward is through private sector investment.

Profits warnings in the UK technology hardware and equipment sector, which rose by more than 60 per cent in the fourth quarter of 2008 could be a contributing factor, as could the drop in UK telecoms firms' share prices.