Richard Wray, communications editor 

Broadband for all to be funded by the industry

The government wants everyone in the UK to have access to a basic broadband service by 2012
  
  


The government wants everyone in the UK to have access to a basic broadband service by 2012, either through a traditional phone line or over a mobile phone network, with the telecoms industry paying for it.

The plan is expected to be announced by Lord Carter, the government's new communications minister and the former industry regulator, in his preliminary Digital Britain report this month, according to industry sources.

He gave a hint of his plan in a speech to industry and MPs yesterday, saying: "Today we are way beyond the view that broadband is a niche product, it is an enabling and transformational service and therefore we have to look at how we can universalise it. We have to ensure that fairness and access for all is more than a soundbite in a manifesto."

More than a third of UK households do not have broadband and getting them connected is crucial to the government's ambitions to create a digital economy and offer more public services over the internet. Last year Gordon Brown pledged to spend £300m over three years giving 1.4 million children access to the internet with free broadband and computers.

Carter is understood to be considering replacing the universal service obligation under which BT must provide all with a phone line, brought in when BT was privatised, with a new industry-wide obligation to provide broadband for everybody.

The basic broadband service is expected to run at up to 2Mb per second, the same speed as the service that Sky gives its satellite customers free and fast enough for email, web browsing and watching the BBC iPlayer. The mobile phone companies, BT and its rival fixed-line operators will all have to help pay for the universal service through a special industry fund.

To realise his ambition, Carter, a former head of Ofcom, has to thrash out a deal with mobile phone companies, whose networks he needs to bring broadband to some remote parts of the UK. Also, an increasing number of British households are now mobile-only so they will need these companies to get online.

Carter, whose full report on Digital Britain will be published by June, also hinted yesterday that the government may have a financial role to play in the rollout of the next generation of superfast internet networks. Last year BT said it would spend £1.5bn installing a fibre optic network that will connect 10m UK homes, while Virgin Media recently announced the launch of a broadband service at 50Mb per second.

But the downturn in the UK economy has made it harder for companies to raise the cash needed for investment in networks that will cover most of the country. Virgin Media's network covers only about half while BT's fibre network is expected to connect to only 40% of homes.

BT bosses have warned that, in the current economic turmoil, shareholders would rather it held on to its cash rather than spend it on new technology.

 

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