Are ‘super-connected cities’ the best investment?

George Osborne’s pledge of £50m to bring superfast broadband to more cities is welcomed, but is it the best use of the budget?

Yesterday, the chancellor of the exchequer stood at the dispatch box in the House of Commons to present his autumn statement to the UK.

Much debate has occurred in the past 24 hours over the real term cuts to benefits, dropping the fuel tax and whether his figures add up without the money he expects from the 4G spectrum auction later this year.

But, there was one announcement made by George Osborne that caught the ear of many observers.

The chancellor revealed that 12 cities that would be sharing a pot of £50m to make them “super-connected," guaranteeing homes and businesses superfast broadband of at least 80Mbps.

This follows an initial round of £100m of funding which went to 10 cities, including the four capitals of the UK nations.

I would say that providing 'better' broadband in cities is misguided when there are many rural places where there is no broadband

Graham Bolton, Cambium Networks

The money will be given to the local authorities on the proviso that they also put some of their own cash into the roll-out and seek extra monies from private sector partners.

Is the money being spent wisely?

The industry has welcomed the extra funding, but now a debate is raging as to whether this money is being spent in the right way.

“I think it is a great gesture from the government and good that broadband continues to be on the agenda,” said Graham Bolton, director of sales at Cambium Networks. “Having said that, I would question why spend £50m on cities that already have ‘decent’ broadband?”

The likes of Cambridge, Oxford and York already have connectivity from commercial providers and make for good business cases for the private sector to continue to invest into.

Bolton argued that the £50m would make little impact spread across these cities and could be better spent in areas struggling to get the likes of BT and Virgin Media to roll-out infrastructure.

“I would say that providing ‘better’ broadband in cities is misguided when there are many rural places where there is no broadband, where the government said there would be a Universal Service Commitment (USC) of 2Mbps by 2012,” he added.

“The £50m funding spread across 12 cities will not make a big impact, but £50m in rural areas will go a long way and make a significant impact to people who need it.”

Funding needs to compliment existing infrastructure

Andrew Saunders, head of project management at Zen Internet, said while the funding was welcome – although “more would have been better” – it had to be complimentary to existing infrastructure, not competing with projects in the local area.

“By complimentary, I mean providing coverage to premises not already served by direct fibre or even fibre-to-the-cabinet (FTTC) to ensure that this investment increases total fibre coverage,” he said.

This government is making ad hoc decisions about important infrastructure like broadband, which are vital to the future of our economy

Tom Watson

“Wholesale access is important to ensure there is consumer choice and the local fibre is important, but there are many other important components that ISPs provide that make up the total internet experience.”

Saunders also warned that building out infrastructure does not mean people will necessarily adopt the technologies and the government needs to be more of a cheerleader to encourage take up.  

“Clearly, I am an advocate of fibre broadband, I'm delighted the government are making more funds available for fibre. But I think that they should be concerned about the slow uptake of fibre and invest in making businesses more aware of what's available and the associated benefits,” he added.

“Ofcom says that there has only been a 7% uptake in fibre broadband in the places where it is available."

Plan not strong enough

Labour is more critical of the announcement as, although it supports extra funding for broadband, it believes the coalition’s plan to roll-out across the UK is not strong enough.

"Times are tough and money is tight, but this is not the main problem in this policy area,” said Labour MP Tom Watson. “This government is making ad hoc decisions about important infrastructure like broadband – which is vital to the future of our economy.”

“They have ripped up the previous, comprehensive plan on broadband, and replaced it only with piecemeal initiatives, which means we are falling behind our rivals in other countries. I would like to see the government set out a proper plan for these things, get a cross-party consensus and then stick to it.”

Sir John Armitt, former chair of the Olympic Delivery Authority, is examining infrastructure plans on behalf of the Labour Party to come up with more ideas and “bigger thinking".

A date for his report has yet to be set, but it will be interesting to hear his thoughts on whether the current crop of deployment plans will meet the needs of a country looking to boost its economy with knowledge-based jobs.   

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