UK broadband operators met competitiveness minister, Stephen Timms, last week to discuss how to increase investment in building faster next-generation broadband networks in the UK.
Timms told the assembled companies that fast broadband was essential to the UK's international competitiveness. "If we delay in putting this new network into place it could be a barrier to the future success of our economy," he said.
But commentators warned that building faster broadband networks might only increase speeds in cities that are already well served, leaving remote regions of the UK with a second-rate broadband service.
They argued that unless telecoms watchdog Ofcom introduces a minimum broadband speed for businesses that all operators must deliver nationwide, then companies in remote locations could be left at a competitive disadvantage.
Antony Walker, chief executive of industry-government forum the Broadband Stakeholder Group, said that there are still areas in the UK where businesses have to pay high prices for broadband connections that offer limited connection speeds compared to those found in major cities.
Small and medium-sized business (SMBs) would be the first to feel the pinch, unless fast broadband is offered universally across the country. "SMBs are not concerned about competing with the business down the road any more. They are competing with businesses internationally, and broadband access enables this. It will not be tolerable for long if they do not have equal access with international competitors," said Walker.
The UK lags behind Japan, France, Korea and Sweden, which all offer top access speeds above 20mbps as standard. According to the Organisation for Economic Co-operation and Development, the highest advertised UK speed is 24mbps, but this coverage is not nationwide.
Minimum level of speed needed
MP Peter Luff, chair of the Business, Enterprise and Regulatory Reform Select Committee, said that establishing a minimum guaranteed level of speed, regardless of how far a business was from an exchange, needed addressing before moving on to next generation networks.
One problem is that the definition of "broadband", and therefore broadband speeds, can vary from operator to operator.
Ian Fogg, research director of Jupiter Research, summarised the findings of a broadband speed test using a BT business-grade line of 8mbps. The actual speed delivered was much lower, he wrote in his blog. In 10 separate tests, speeds reached just 29% of the 8mbps maximum possible.
Ed Richards, chief executive of Ofcom, said that the regulator had a role to play in building up a robust regulatory framework that would allow broadband operators to deploy fast broadband when there is a clear business case for doing so.
But in areas where the business case for upgrading networks is weak, intervention from the regulator might be needed, said Fogg.
"Upgrading current broadband networks and deploying next generation ones does not happen overnight. Even once they are ready the benefits to UK businesses can take up to three years," he said.
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