Tuesday, October 26, 2010

UK superfast broadband ambitions - where the money's coming from


The Financial Times reported last week (Osborne confirms £340m cut in BBC spending) on the source of the newly-announced funding for the expansion of superfast broadband across the UK - the BBC:
"...the BBC will spend £530m from the licence fee over six years to support the extension of superfast broadband services to rural areas not likely to be reached by commercial expansion. The government now intends to combine a programme for getting basic broadband to all areas of the UK with a general upgrading of speeds, with the BBC making a major contribution. Of the total, £230m comes from money unspent by the corporation from a “digital switchover” budget of £803m to help the poor and vulnerable upgrade televisions and set top boxes from analogue to digital television by 2012."
A further FT article (BBC to help finance super-fast broadband) suggested that this amount could rise further still:
"The government, after rejecting the former Labour administration’s plans for a telephone tax to fund superfast broadband, has instead chosen to take money from the BBC licence fee...the BBC would contribute £530m from its licence fee to superfast broadband by 2015, but the total could rise to £830m by 2017."
This seems an odd choice to me, just as the previous administration's 50p landline tax seemed an unfair, ill-thought-through strategy, especially as around a third of the population are yet to get on board with broadband.

Don't get me wrong. Clearly any additional funding is to be welcomed, especially in the current climate. But diverting existing money from the BBC, rather than identifying and committing substantial new funding, seems to me out of keeping with the government's lofty ambition of ensuring the UK has the best superfast broadband in Europe by 2015. Particularly when previous studies have suggested that far greater amounts will be needed to deliver what we need.

Unsurprisingly, the FT also reported that Virgin and BT had welcomed the proposal. I'll bet. I wonder if previous complaints from ISPs about the extent to which the continued growth in usage of the BBC's iPlayer requires operators to constantly upgrade their networks without generating a penny of revenue had any bearing on the decision. It will also be interesting to see the extent to which the new network builds supported by this new funding approach are required to embrace open access provision, a principle fundamental to the approach to NGA in the USA, Australia and elsewhere, and an issue I touched on in this previous post.

But to return to the point, if superfast broadband really is as important as the government says it is (and I for one believe that it is, if not even more so), shouldn't we be basing our ambition on a more solid and substantial  foundation than diverting funds from elsewhere? Especially when the evidence suggests we have a long, long way to go if that ambition is to become a reality.

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