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UPD2 UK ISPs Give Mixed Reaction to Budget 2012 Broadband Commitments

Thursday, Mar 22nd, 2012 (8:42 am) - Score 386

Yesterday’s Budget 2012 announcement (detailed summary) from the UK government appears to have drawn a mixed reaction from Internet Service Providers (ISP) and related organisations. The budget revealed which 10 cities will get “ultrafast” broadband services and better mobile / wifi connectivity through the £100m Urban Broadband Fund (UBF) and added a further £50m to support similar efforts in “smaller cities“.

Most ISPs gave a cautious welcome to the news but others questioned whether £150m would be enough to do the job properly and some wondered why extra money was being ploughed into urban instead of rural areas where there is less chance of Private Sector investment.

An ISPA Spokesperson said:

ISPA welcomes Government investment in internet infrastructure in yesterdays’ budget and is pleased the Government is recognising the growing importance of the online industry to the UK economy.

To continue to benefit from the opportunities this sector can bring to the economy, ISPA believes that the focus of funds should be on investing in upgrading networks throughout the country with more emphasis on ensuring that consumers and businesses are able to access the services they require. Government money combined with the continued investment by ISPA members in their networks, will ensure that the UK continues to benefit from the opportunities and innovation that the industry can deliver.”

Neil Berkett, CEO of Virgin Media, said:

We share the Government’s belief in the power of superfast broadband to transform communities and businesses right across the UK. Competition in the broadband market has led to significant progress but there remain some areas where market-led investment alone will not deliver. We welcome this extra public investment which could benefit thousands of people by supporting genuinely next-generation solutions that multiple providers can build services around.”

A BT Spokesperson said:

BT welcomes the announcement from the government. It is helpful to know which cities have been selected to receive the first tranche of funds and it is encouraging to see that further cities will benefit going forward. These funds will help the private sector to improve speeds and coverage in the selected cities and we would encourage the government to deploy those funds in a way that encourages competition and investment.”

Giles Phelps, MD of Cardiff-based Spectrum Internet, said:

Cardiff is the Capital city of Wales and should receive investment to improve it’s broadband infrastructure so that it can attract companies from overseas and encourage home-grown businesses to expand.

The £7- £12 million for Cardiff is there to ensure the gaps are filled where BT and Virgin have failed the Market. Therefore I hope those allocating the money are planning to talk and work with ISP’s like us who have already invested in these slow-broadband areas. £7million investment made by Spectrum Internet would not only ensure 100% coverage in Cardiff but also further afield in south Wales and would ensure a sustainable service for many years to come. We’re ready to start the work – just give us access to the funding!”

James Enck, CityFibre’s Head of Corporate Development, said:

Whilst these developments are inarguably positive steps in the right direction, we are, frankly, disappointed at the absolute level of financial commitment relative to the sheer enormity of the challenge of deploying genuinely future-proof broadband infrastructure across the UK. While GBP150m is a considerable amount of investment, it pales in comparison to multi-billion pound rail projects promising unclear economic benefits over much longer time horizons. This disconnect suggests that government still fails to fully appreciate the transformative potential of a truly robust broadband infrastructure for the nation over the longer term, and is thus unwilling to commit a level of investment appropriate to the challenge at hand.

Whilst this situation is lamentable, it confirms our long-held belief that the solution to the UK’s broadband problem is to be found in a multi-faceted investment approach involving new entrepreneurial capital, in addition to traditional sources of investment from both the private and public sectors. The funding gap to be filled is still simply too large for it to be otherwise, and today’s announcement, while welcomed, does little to alter that fact.”

Dana Pressman-Tobak, MD of Hyperoptic, said:

There are big questions to be asked following the Chancellor superfast broadband city proposals. It’s clear that there is a need to improve broadband speed and quality for both consumers and businesses, especially in light of recent reports that the UK’s economy is evermore relying on eCommerce; the UK currently ranks number one in all G20 nations in terms of the amount the internet contributes to its GDP.

But in order to compete in a global broadband arena the government needs to take a long term view and focus on encouraging broadband providers to adopt fibre-to-the-building [FTTP] models in cities. Anything less is not ideal. Currently providers are taking their time adopting this approach, because they don’t want to cannibalise their customer base and the technology is not compatible with their legacy network.

If the Government has £100 million to spare then we would advise that it puts the funds towards rural broadband projects, where the commercial case is far weaker.”

Harry Cotterell, President of the Country Land and Business Association (CLA), said:

We are concerned that the additional £50million for superfast broadband is going to 10 so-called ‘smaller super-connected cities’ rather than rural areas where, clearly, the need is greater. We need clarification on whether this money has been taken from investment previously promised for broadband in the countryside.”

Annette Burgess, MD of Welsh Rural ISP eXwavia, said:

[The] announcement is good news – if you live in one of the 10 cities named and, potentially in a smaller city. But the majority of the UK, which is made up of rural communities, will suffer as a result. Without significant investment in the rural broadband infrastructure there is a risk to jobs and investment as well as social issues.

The message that rural communities are hearing from the government is that they are not important. We are creating a green waste land rather than a vibrant, viable rural economy. Sure, delivering rural broadband to some of these areas is challenging, but not impossible. eXwavia is delivering next generation broadband right now and the difference it can make to individuals, communities and rural businesses is quite frankly breathtaking.

More needs to be done to ensure rural areas throughout the UK are not left lagging behind or else we face a country with a social and business divide as a result of lack of broadband capability. That is not good for the communities or the economy as a whole.”

Budgets and politics traditionally divide opinion and so it’s no surprise to find that most of the reactions so far have differing views, although there’s clearly some overriding uncertainty about both the level of funding and where it’s being targeted.

We will continue to update this article throughout the day and are expecting some comments from both BT and Virgin Media later this morning.

UPDATE 9:25am

Added a comment from BT to the top.

UPDATE 9:28am

Added a comment from Virgin Media.

UPDATE 10:37am

Added a comment from the Internet Service Providers Association (ISPA).

By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on X (Twitter), Mastodon, Facebook and .
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