UK - Broadband inquiry

Government investigates path to next generation broadband

Next generation high speed broadband will be essential for the UK's future economic success, Business and Competitiveness Minister Shriti Vadera said today as she launched an independent review into the issue, led by Francesco Caio.

The new review will look at how Government can help pave the way for the UK to move to next generation broadband networks.

Ultra fast broadband - reaching speeds of up to 100Mbps or more - will be important to British businesses making the most of new opportunities arising from rapidly developing technology and an increasing reliance on Internet services.

The review will investigate what are considered to be the potential barriers to the mass roll-out of next generation technology, and will look at barriers to content companies collaborating with those responsible for infrastructure.

Shriti Vadera said:

"The way we will do business, access many government services, as well as information and entertainment, will change beyond recognition over our lifetime. New technologies will push the boundaries of today's communications infrastructure.

"We must be ready to respond to future technological developments, which will place unprecedented challenges for our communications networks over the coming decade.

"That is why we need to look ahead to the future now. We need to prepare the way for the UK to adopt groundbreaking new technologies to ensure that we do not get left behind - competitively or technologically.

"We must not be in a situation where our creativity and growth of our businesses are stifled by inadequate communications and regulatory frameworks."

Massive investment by companies has led to a rapid development in broadband services over the last 10 years. In 1997 less than 10% of the population had ever used the Internet. By the end of last year, 70% of the population were Internet users and more than half of homes had broadband.

As businesses and consumers increasingly demand a richer, more powerful and seamless broadband experience, the next decade could see technology develop at just as fast a rate and the Government is keen to ensure that companies are able to continue to build on the UK's world-leading position.

Broadband companies are already starting to develop high speed services, for example: Virgin Media's 50 Mbps pilot in Ashford, and BT's plans for a 100 Mbps fibre network to homes in Ebbsfleet.

The independent review will be led by Francesco Caio, working with relevant Government departments. It will report in the autumn to the Secretary of State for Business, Enterprise and Regulatory Reform and the Chancellor of the Exchequer.

The key areas the review will consider will be:

* To consider the possible barriers to any new models of investment, involving collaboration between telecommunications suppliers and between suppliers and content providers and identify potential solutions

* To examine whether there are opportunities to minimise the cost of private sector investment, including whether there is a public sector role in this respect, for example related to civil works

* To examine the framework within which investment will take place to promote a more certain investment environment

* To clarify the treatment of new infrastructure options within the non-domestic rating system

* To examine whether the EU and UK statutory framework has given Ofcom the necessary powers to establish a regulatory regime which would provide regulatory certainty for investors and sufficiently incentivise new investment in high speed access

In parallel, the Government will also ask the Broadband Stakeholders Group to examine the economics of fibre deployment, specifically whether deployment of fibre to the premises will be viable without a first step of deploying fibre to the cabinet.

In looking at these areas, the review will consider the impact of barriers on both speed and reach of likely deployment of next generation broadband. It will also take account of the current Ofcom consultation on NGA policy, which this review is intended to complement, and the ongoing work of the Broadband Stakeholders Group following their report in April 2007. Ofcom will continue to develop their proposals for regulating next generation access under the existing regulatory framework.

Devolution means that the constraints this review seeks to address may differ in scope and application in different parts of the UK.

Kip Meek, Chairman of the Broadband Stakeholder Group (BSG) said:

"This is the right announcement at the right time. The review addresses some of the BSG's central concerns about next generation broadband and we'll be fully engaged to support its work."