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Government unveils ‘Britain’s Superfast Broadband Future’

by Scott Bicheno on 6 December 2010, 12:12

Tags: Virgin (NASDAQ:VMED), British Telecom (LON:BT.A), UK Government

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A cunning stunt?

Secretary of state for media-and-a-bunch-of-other-stuff - Jeremy Hunt - is delivering a speech today in which he's unveiling the next phase in the government's plans to stimulate the roll-out of ‘superfast' broadband across the UK.

The cunning plan has two main features: to speed-up broadband, and to ensure the whole country has access to it. This involves the state contributing £830 million to the effort, which will now centre around creating fibre ‘digital hubs', with individual communities responsible for creating the final stage of the connection from the hub to the home.

"...we recognise that taking high-capacity fibre deeper into the network is likely to be key - which is why our goal today is very simple: to deliver a fibre point in every community in the UK by the end of this parliament," said Hunt.

This was followed by lots of talk about how nice it is of BT to pledge some of its own money towards infrastructure development, as long as that investment is matched by the state. There was even some classic doublespeak: "Our strategy, backed by a £830 million government investment, will help deliver that by stimulating private investment and competition."

It's hard to know what, ultimately, to make of this. If the result of this public/private partnership is that everyone in the country has a 1Gbps broadband connection in five years then that's great. But if that facility is controlled by BT, then it's hard to see how competition has been stimulated. In fact, by favouring BT over its only fibre competitor - Virgin Media - competition has been actively inhibited by state intervention.

Several media have held forth on this matter. The Guardian is not happy about the apparent favouritism being shown to BT, calling the public policies on this matter "a mess". It refers to a Computer Weekly rant that concludes: "STOP wasting our money supporting a single company against the citizens and businesses of this country."

The Beeb points out that the previous administration had promised 2Mbps to 100 percent of the country by 2012, and this plan postpones that by three years. What is doesn't mention is that Labour said a lot of stuff it never expected to be called up on before the last election. On the Radio 4 Today programme, the state broadcaster revealed a rather more Naughtie perspective.

Hunt's speech, which you can read in full overleaf, doesn't address the central problem of creating a state-sponsored monopoly in next-gen broadband across much of the country: competition. There will be talk about BT being regulated into sharing its network and infrastructure with third parties, but years of supposed progress - and extensive lip-service - in this area have yet to yield satisfactory results for many.

The fact is, the only way to ensure true broadband competition is for there to be at least two parallel fibre networks across the UK. If the tax-payer must, once more, be called upon to help-out private enterprise, then the money should be distributed evenly between BT and Virgin. The fact that it clearly won't be poses serious questions about the relationship between both the government and Ofcom with the former state monopoly.

You can download the full PDF of the Britain's Superfast Broadband Future report here, and read a full transcript of Hunt's speech overleaf.