Next Generation Fund
digital britain

UK's Next Generation Fund to invest £1 billion in "super-fast broadband"

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bis[UK] The UK government today announced that its Next Generation Fund will invest £1 billion to help bring “super-fast broadband” to 90% of the country by 2017, particularly rural households and businesses who might otherwise be left out of so-called Digital Britain.

The “additional” investment will be funded directly by the British tax payer as a continuation of the “duty of 50p on all fixed lines”, which was previously announced in the Digital Britain White Paper as part of the government’s unambitious ‘Universal Service Commitment’ to deliver broadband speeds of 2Mbps broadband to the whole country by 2012. The Next Generation Fund certainly ups the speed stakes, though it appears to be an ambition rather than a guarantee and, conveniently this time round, “super-fast” broadband isn’t actually defined.

A consultation will now be held with “stakeholders across the telecommunications and internet provider industry” on how best to raise and spend the fund, and a procurement team to oversee the delivery and management of Next Generation Access will soon be appointed. Although on the spending front the government has already laid out its overall aims.

Alongside evening up the country’s digital divide and boosting the digital economy, the fund is being pitched as part of the government’s sustainable growth strategy. In other words, there’s inevitably a ‘green’ political play at hand here too. The consultation paper makes great mention of the benefits the fund will bring to Telemedicine, Teleworking and Cloud computing, for example, with reference to reducing carbon emissions.

In fact, if the government is to be believed, there’s something in it for everybody. One sentence in particular caught my eye. Teleworking “brings social and economic benefits to those who are less mobile such as people with disabilities.” Now, I can personally attest to that being true. I’ve been using the Internet to overcome aspects of my disability by teleworking off and on since 1997 – although that was years before Digital Britain was even invented.

  • Tom Allason

    how fast is ‘super fast’? i can’t remember the last time i thought by broadband bandwidth wasn’t sufficient… wireless is another matter but that doesnt appear to be relevant to this initiative. in general am not a big fan of the public sector doing what the private sector would do on its own- laws of supply/demand work pretty well in my book.

    • Steve O'Hear

      We can argue about the merits of the free market versus state intervention till the cows come home but the fact remains that in rural areas broadband can be dire. There’s no incentive for telcos to roll out decent infrastructure into low population areas because it doesn’t scale. Just isn’t a decent return without charging the end customer directly and they won’t/can’t pay the actual cost.

      • Tom Allason

        you might argue crap broadband is priced into the cost/price of living rurally, as it is inversely into the cost/price of urban living. by artificially adjusting the tension between the two, increased rural value comes at the expense of urban devaluation.

        dont get me wrong, i do not oppose tax receipts being used to fund public services like schools/hospitals. my fundamental issue is that ‘super fast’ broadband is not a ‘right’ nor should it be.

        not only is intervention here unfair for those footing the bill but it also hinders competition and innovation. i agree that it would not ‘ordinarily’ be economical to build expensive rural broadband infrastructure however there is more than one way to skin a cat… and the existence of this subsidised infrastructure disincentives businesses from investing in otherwise innovative solutions.

        it would for example be less attractive for mobile operators to invest in improving the quality of their wireless data services since consumers with access to ‘cheap’ broadband would be less inclined to pay an attractive fee.

        anyway it makes me

      • Steve O'Hear

        The mobile/wireless industry may actually be benefactors of this scheme, certainly the 2Mbps guarantee.

      • will

        if rural areas want broadband access it is down to them to get it. There have already been villages that have clubbed together to get a microwave antenna after all.

        but no, the country is bankrupt so lets spend another billion quid on something that isnt wanted.

  • Steve Kennedy

    The main problem with the competitive market is competition! When Oftel (now Ofcom) opened up the Local Loop market so operators could unbundle the loops and run their own services over BT’s copper, too many operators jumped on the bandwagon and rushed to put their own kit in BT’s exchanges.

    This meant they competed for space (BT had to build hostel space for the kit) and then for customers, not a bad thing but there are limited customers per exchange and LLU (local loop unbundling) is all about economies of scale.

    BT meanwhile rolled its own services out and all the operators (pretty much) had to buy more and more capacity off BT to connect their equipment in the exchanges to their networks, so BT either wins at the retail level or the wholesale.

    If the competing operators had joined forces and built a neutral network to compete with BT’s then they would have gone to more exchanges and there would be true competition at the wholesale as well as the retail side. The operators would then have had to compete on service, but the actual network would have the scale required to make it economic.

    Unfortunately things aren’t likely to change and the same will happen for fibre networks, with BT rolling out fibre-to-the -street cabinet (FTTC) which means it’s likely that BSkyB and TalkTalk (Carphone Warehouse) and maybe O2 and others will do the same. Again they’ll compete with each other when the main competition is actually BT.

    In rural areas it’s actually wireless that’s likely to be the answer as broadband over copper (as in DSL) just doesn’t work well over long distances, especially if you want high speeds (VDSL2+ which is the technology for 100Mb/s+ only works over very short distances like sub 100m).

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