Broadband will be an ideological test case for this government

The future for broadband in the UK is a critical economic and political issue – perhaps the only technology that has come to deserve such high-level government attention.

It has also become an increasingly emotional topic of debate. After last week’s announcement of the government’s latest strategy, the rural broadband lobby was sharpening its knives and smaller providers were again shouting loudly about what they perceive as iniquities in the system that makes it difficult for them to compete effectively.

In particular, much ire has been focused on the decision not to amend the policy on business rates that sees suppliers taxed for every piece of fibre-optic cable they lay as part of their network. The UK remains the only EU country that taxes fibre in this way, an apparent anomaly that surely does no good to the UK’s ability to achieve the government’s stated aim of having the “best broadband network in Europe by 2015”.

The only point of agreement across the board is that this is a once in a lifetime opportunity for the UK to get its broadband infrastructure right, and to establish a technological, commercial and regulatory environment that will support growth for decades to come.

BT recognises that opportunity and is investing £2.5bn in fibre roll-out, as well as promising greater coverage should it be awarded the £830m funding on offer from the government to reach communities that might otherwise be considered uneconomic to connect up.

BT’s critics say that £830m also represents an opportunity to create greater diversity and competition in the market if it went elsewhere – meaning into their pockets instead.

The decision on how that cash is spent will be one of the defining points in the debate. We have a government that is a friend of big business but also wants to be a promoter of openness, deregulation and competition to encourage smaller businesses.

The destination of that £830m will be an ideological test for the government’s attitude to business, as well as a significant determinant of the future shape of the UK’s broadband sector.

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Broadband will be an ideological test case for all word :)