The government has announced it will set up Regional Aggregation Bodies (RABs) to negotiate deals for broadband on a regional basis on behalf of public facilities, such as council offices and hospitals, and so obtain better terms from suppliers.

Many public institutions are in areas where broadband is not yet available and it is expected that large orders placed through the RABs will result in new infrastructure that can then be used to provide broadband services to the surrounding communities.

In July the government asked broadband providers to say whether they would be interested in supplying services to the RABs, as part of an EU-approved scheme. Forty-five companies replied and the list has now been whittled down to 27 by the DTI.

Eventually a shortlist of 10 to 20 companies will be selected and among them they will have an effective three-year monopoly to supply broadband services to government bodies. The RABs will negotiate regional contracts with suppliers, and the intention is that the RABs should be self-funding by taking a slice of the funds that flow through them.

The plan is a good one and it should result in considerable savings for public bodies. It will build on experience gained from the existing Office of Government Commerce Buying Solutions (OGCBS) scheme for broadband purchasing. But will it achieve the second aim, of increasing access to broadband in more rural areas?

The theory is that if there is sufficient public demand in a village with no broadband facilities, suppliers will provide new backhaul connections to the telephone exchange or some other distribution point. This extra bandwidth could then be used to provide services to local businesses and residential customers.

One potential problem is that suppliers may have a different way of providing the service that would not significantly increase the availability of local bandwidth. The government would like to make it a condition of contracts that the spin-off benefits really do happen, but the laws make it very difficult to insist on such things.

It has been suggested that the bandwidth contracts should stipulate that excess capacity should be made available for resale to local businesses and residents. But this may contravene laws on state aid. However, such resale activity has potential to improve the finances of the public bodies, so it does warrant some thought.

In some countries, broadband services are considered so important that exceptions are made to the law, and this has resulted in rapid roll-outs of broadband services to even the remotest areas.

Even outside the activities of the RABs, suppliers are trying to justify investment in rural areas. Easynet has a scheme to supply broadband even if it has orders from only quite a small number of public bodies or businesses.

This is helped by its selection as one of the broadband suppliers in the OGCBS scheme. It is without doubt a promising sign for the RABs but it would not take much effort from the government to make a larger improvement.

Let's hope this happens.