The Government has actually extended the previous lot’s deadline for universal access from 2012 to 2015, but it’s planning to put its hand in its pocket: there’ll be £830m of public money made available over the next seven years, including an extra £50m of funding announced today. About two-thirds will go towards direct ‘Fibre-To-The-Home’ connections, which can offer speeds of 100 Megabits per second or more. The rest will go to ‘Fibre-To-The-Cabinet’ connections in rural areas – this will involve a ‘digital hub’ with a fibre-optic connection, which will then be connected to homes and businesses in the area via old-fashioned copper cables. The maximum speed here will be more like 40Mbps; but since fewer than 1% of UK homes have a connection over 24Mbps, and only 15% regularly get more than 5Mbps (in contrast to South Korea’s 65%), that will still be a major improvement.
So in the circumstances, it’s probably good news is that the Government’s ambitious aim to lead the way in Europe by 2015 won’t entirely be based on connection speeds; apparently, it’s planning to use three other measures, namely coverage, price and choice. Which might give us more of a fighting chance.
Naysayers might argue that this is a lot of money to spend in a time of austerity. But the economic argument is compelling: as Hunt said this morning, the UK digital industries already generate around £130bn a year and employ more than 1.7m people (that’s 6% of the workforce). And a study by the London School of Economics has suggested that these new measures could create 280,000 new jobs, adding £18bn to GDP. So it should be a price worth paying.
Not everyone’s happy, though. Smaller broadband companies are concerned they’ll be pushed out by BT; apparently they’ll have to pay rent to BT to use its ‘ducts and poles’, the infrastructure on which they’d need to string their fibre optics. Since BT won’t have to fork out, it’s at an immediate advantage in terms of costs – creating an obvious barrier to entry, which could reduce competition and prevent downward pressure on prices (especially since smaller players won’t be allowed to target the higher value business market). Unless the Culture Secretary can address those concerns, James Naughtie might not be the only one affecting a Freudian slip when discussing Hunt…