Government should not subsidise next-gen broadband

The government is being urged to support the development of local access networks

The UK telecoms industry should deliver next-generation access (NGA) to broadband services without government subsidies or intervention, an independent report commissioned by the Treasury and the Department for Business Enterprise and Regulatory Reform concluded today.

And concerns that rural areas will miss out because it is not financially viable for providers to extend access to those areas should be addressed by experimentation with new wireless or overhead deployment methods.

The government still has a role to play, according to Francesco Caio, author of the review.

"I have concluded that the case for a public intervention at this time is weak at best. But it is the right time to create the conditions that will deliver a competitive NGA infrastructure in the next five years," he said.

"The government needs to play its part across a number of areas in supporting the development of NGA. It cannot afford to be complacent."

The government's role includes supporting the development of local access networks by helping them organise and develop common standards, relaxing rules that prevent NGA's delivery via overhead lines, and supporting Ofcom to ensure that spectrum auctions take place soon.

"We will consider these recommendations as we plan how to make sure the UK remains one of the world's leading internet economies," said Secretary of State for Business John Hutton.

"We want to create the right conditions for private sector investment and stand ready to play our part in ensuring that the UK has a competitive infrastructure in the years to come."

The review concluded that it is unrealistic to expect a single entity to deploy a single fibre network universally across the UK, and that different networks will be installed by different companies using a mix of fibre and wireless technologies.

A recent study by the Broadband Stakeholder Group found that universal fibr e-to-the-home would cost almost £29bn to install nationwide.

Kip Meek, chairman of the Broadband Stakeholder Group, said: "Importantly, this report states that, although there is no government money on the table, there is a key leadership role for both government and Ofcom, and that everyone involved in the provision of broadband must work more closely together if we are to address the challenges of deployment of next-generation, super-fast broadband in the UK."