Today the government launched a consultation to decide how money from the Next Generation Fund should be spent. The 50p levy on all telephone lines is the source of the funds and is expected to raise around £175m a year, with £1 billion of this to be used by the government to help provide super-fast broadband to 90% of the country by 2017. It is estimated that without the use of the fund, next generation broadband, currently available to 50% of the population, would only reach 70% of the country.
According to Lord Mandelson, Business Secretary, “This investment is about bringing the future of broadband to areas of the country that would otherwise miss out. We cannot underestimate the opportunities this will bring for homes and businesses which is why we are taking action to make sure everyone benefits.
“Already the market is delivering superfast internet speeds of 50Mbps to half the country but we cannot be certain that it will reach the communities that are not currently served, which is why we are putting in an extra £1billion to support the market.
“By upgrading our networks we will put the UK at the fore of rapidly developing technologies which will bring jobs, boost business potential and grow our digital economy.”
The government is evaluating different Next Generation Access (NGA) technologies, including Fibre to the Cabinet, Fibre to the Home, Satellite, WiMAX and Long Term Evolution, which may be viable options. Right now, it is uncertain when things like Long Term Evolution will be available, so fixed line solutions seem like the best option in the short term.
The government are also intending that where money is provided, it should be used to fund an ‘open access’ network. This would of course mean that it would work in a similar way to existing fixed-line broadband from BT where providers can sell their own broadband services over the BT deployed network, helping to give consumers a choice and produce some competition to the market.
The consultation can be read in full on the Department for Business Innovation & Skills website, and is open for responses until 01/04/10.

©2012 MoneyBlog. All Rights Reserved.

The topic of digital inclusion has been at the top of the agenda for the government for Broadband Britain, from digital radio to security and safety. Lord Carter worked to satisfy everyone with demands for tougher action on music piracy to those lobbying for more consumer rights. Martha Lane Fox was appointed Digital Inclusion Champion to campaign for the most disadvantaged. She is focused on getting the six million poorest citizens online and working with the elderly and their barriers for going online.

The announcement by the government of a ‘2 meg’ Universal Service Commitment (USC) was the biggest news and confirms the government’s ambitions that by 2012, everyone in the UK will be able to receive broadband service on a line with speeds of up to 2 Mbps. However, the plan still lacks detail and there has been some confusion as to whether this is a minimum 2 Mbps guarantee or a commitment to try to achieve it.

We also had the introduction of the ‘broadband tax,’ a 50 pence monthly levy on all fixed telephone lines. This is supposed to fund the next generation broadband deployment for those areas where market led approaches are unlikely to succeed.

BT introduced its ‘fibre to the cabinet’ or ‘FTTC’ services in pilot areas including Muswell Hill, which now allow for upstream speeds of up to 10Mbps which will be of particular interest to businesses who have long waited for additional upstream capacity. BT is also increasing its ‘fibre to the home’ (FTTH) plans. Meanwhile, Virgin Media continue to dominate the super fast broadband space with its 50 meg service.

The General Election in the next few months may lead to interesting debates about broadband in some areas and the Digital Economy Bill is about to enter the Committee Stage in the House of Lords.

We expect to see more next generation access rollout next year, including the setup of the organisation around the funding of next generation access for those communities funded by the levy, but there is an air of uncertainty which is likely to only intensify until a new government is formed.

©2012 MoneyBlog. All Rights Reserved.

The UK continues to be behind the rest of the world when it comes to broadband speed.

A report by the International Communications Market Report showed that only 10 per cent of broadband connections in the UK have a speed of over 8Mbit/s, compared to 26 per cent in France, 33 per cent in Sweden and 37 per cent in The Netherlands.

An analyst with Analysys Mason, Richard Thurston, stated that broadband speeds in the UK are on the rise, as companies like BT are beginning to roll out super-fast broadband services to 40 per cent of the population. He said, “Speeds are increasing quite rapidly and homes and businesses in areas that receive the new broadband will see a vast improvement in their services.”

Still, the figures will be debated further after a recent Eurostat report placed the UK eighth in the EU for broadband speeds. The report will also put more pressure on the government’s universal service commitment to get the entire population online with minimum speeds of 2Mbit/s by 2012.

A 2Mbit/s connection will be a marked improvement for many businesses in rural areas, but could still not be fast enough for a lot of consumers, Thurston noted.

The report did note that while speeds are not the highest, the UK does have some of the lowest costs for broadband services, decreased 10.1 per cent since 2003, to an average of around £16 per month, compared to £20 in the US, £23 in Italy and £25 in Spain. While the prices in the UK are some of the lowest, Thurston argued that they are unlikely to get much lower and may start to rise again. He stated, “Certainly for consumer ADSL the price seems unlikely to fall much further, but business fibre connections for next generation access are still falling across Europe.”

Mobile data has risen dramatically in the UK, the report revealed, with almost 24 per cent of mobile revenues being derived from non-SMS services, up from 7 per cent in 2003.

©2012 MoneyBlog. All Rights Reserved.