Four years on UK will still be a back marker on broadband

Britain is lagging behind most developed countries in the development of its broadband infrastructure. The UK is 11th out of 13...

Britain is lagging behind most developed countries in the development of its broadband infrastructure. The UK is 11th out of 13 in deployment of broadband in the Organisation for Economic Co-operation and Development (OECD) area and will not rise above seventh by 2005

The Government's e-envoy had promised that the UK would have the cheapest and most widespread broadband access in the OECD by that date, but insiders in the Broadband Stakeholders Group (BSG), which is working with the e-commerce minister to draw up plans to achieve a Broadband Britain say seventh is the best we can hope for. What is more, last week's annual survey from the Communications Management Association (CMA) said that 71% of those questioned believed their businesses were being hampered by a lack of broadband access. This has increased from 45% of respondents in last year's survey.

But who is to blame? Some point the finger at BT, some at the Government. BT says lack of demand is the key problem. And what are the effects of UK plc's failure to provide itself with a fast Internet infrastructure?

David Harrington of the CMA believes his organisation's findings should cause alarm bells to ring in government. "The lack of broadband access is inhibiting the expansion of e-business in the UK where businesses are seeking to reach out to the end-user," said Harrington.

Ian Foxley, IT director of Domino's Pizza, agreed. "Businesses are inhibited by this situation, and people are limited in their access to information. We are already using multi-platform ordering capability, but there are offerings we could deliver to people if broadband was more widespread," he said.

Tim Johnson, principal analyst at Ovum, lists the deleterious effects of a continuing narrow-band UK. "Broadband is important for an economy. It increases productivity - things could be done much more quickly and techniques such as application service provision could flower. "There are also a number of businesses which would work if broadband was widespread, those using streaming media, for example," he said.

Harrington blames BT. "I believe that ADSL (asymmetric digital subscriber line) in the local loop will only be rolled out according to BT's agenda. If I was at BT I would take every measure to ensure the infrastructure is not rolled out until demand is there. And that's what the survey shows is happening."

The telecoms giant has been widely viewed as dragging its heels on providing access to exchanges for competitors who want to provide ADSL services to homes on the "local loop" - the copper cable into subscribers' homes.

BT resists such accusations. A spokesman said 1,000 exchanges, or potentially 70% of Internet users, are now ADSL-enabled. "Access is available, supply is there, but what hasn't happened is take-up.

"BT has reduced prices but it is still difficult to compete with the cable operators," he said.

But the debate can clearly not remain at the level of finger-pointing between players. Johnson is critical of Government efforts so far. "We keep hearing that the Government is allocating millions of pounds to various projects, but we never hear what has been achieved and what exactly will be happening next."

He believes that the Government is all talk and no action. "Schemes that consolidate demand, like the Government has promised, are a good thing. But all we hear are announcements, never what's actually happening."

Harrington said, "A strong response is needed from the Government and Oftel. A forceful initiative with fiscal incentives to stimulate supply and demand such as a requirement that all new buildings be provided with fibre in the same way that they get gas, electricity and water."

The DTI admits that it still faces challenges. A spokesman highlighted last week's announcement of £30m of funds to stimulate broadband and said that it will be consulting with infrastructure and content providers via the BSG to plot the way forward. "We face clear challenges but it is not just up to us," said the spokesman.

Many observers cite the case of South Korea. There a small number of telecoms companies have been working closely with the government on a long-term commitment to achieving high levels of broadband penetration in the economy.

And it would make economic sense for the Treasury, Harrington said.

He cites BSG studies which have calculated that the fiscal impact of full, or even improved broadband access would yield a net increase in taxation revenue.

Whatever the claims and counter-claims it is clear that no-one is confident enough to say that the UK leads the world in the type of high-speed network access that is essential for tomorrow's economy.

Only a few are speaking out about what this may mean for the future of UK plc. "Britain is in danger. We are lagging behind - but at least at the moment no-one has got very far," said Johnson.

antony.adshead@rbi.co.uk

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