Telcos demand government backing for broadband

The government is likely to face demands for soft loans to telecoms providers as part of a series of recommendations to speed up...

The government is likely to face demands for soft loans to telecoms providers as part of a series of recommendations to speed up the rollout of UK's broadband network.

The Broadband Stakeholder Group (BSG) charged with advising the government on the issue will meet with Douglas Alexander, e-commerce minister at the DTI.

The group includes representatives of Ford, Marconi, Alcatel and the Institute of Directors. It was set up in May by the Cabinet Office to look at competition, content and demand generation, purchasing and research.

The group representatives are expected to press Alexander on the need for extra cash to fund the broadband roll out, as well as speeding up aggregate purchasing schemes that have been mooted by ministers and the e-envoy since early 2001.

Aggregating demand for broadband services from a range of public services, such as libraries, GP surgeries and police stations, is one way to make suppliers see rural areas as more commercially attractive.

However, Jim Norton, chair of the BSG task group for further research into the broadband market, said: "We need both - aggregate purchasing and money. I will be surprised if groups don't ask for help from the Treasury. The telecoms sector is in a parlous state and soft loans to telcos or systems integrators underpinned by the government could help address this."

Norton said that small businesses may require financial incentives to buy in broadband technology.

One option for businesses investing in broadband access could be R&D tax credits. "They could claim back more than 100% in tax," said Norton.

"We need action on all three fronts," said Norton. "The government's role as an aggregate purchaser, stimulating private sector use and the creation of content. There are likely to be incentives for opening up businesses dealing in content."



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