UPD Policy Exchange Tells UK Government to Stop the Broadband Subsidy

The Policy Exchange, an educational charity which also claims to be the UK’s leading think tank, has warned the government that its case for “spending any more taxpayers’ money” to subsidise the roll-out of superfast broadband is “weak” and should be stopped in 2015. Instead it wants the country to focus on connecting people who don’t use the internet.

At present the existing broadband strategy only goes up to mid-2015 and by then the government aims to have made superfast broadband (25Mbps to 30Mbps+) ISP services available to 90% of people in each local authority area (the last 10% will have to make do with speeds of at least 2Mbps+).

However today’s Policy Exchange report (‘Superfast and the Furious‘), which is supported by GO ON UK, calls on the government to construct a post-2015 strategy that would focus on helping the 10.8 million people not online (half of whom are over 65) and to do more to help small businesses make the “most of the opportunities presented by the internet“.

Chris Yiu, Author of the Report, said:

“Successive governments have been right to invest public money in basic broadband connectivity. The government’s current spending plans will extend fast broadband to the vast majority of people. Any further public money should be spent on making sure we are putting this to good use. It’s far from clear that your taxes should help to pay for me to have an even faster connection.

There is no doubt that broadband, both fixed and wireless, makes a major contribution to the economy. But the right person to decide how much speed your family or business needs is you – not the government.”

We certainly agree that the right person to decide how much speed “your family or business needs is you“, although unfortunately some people in more rural and sub-urban areas have neither the choice nor money to build their own superfast broadband ISP and network (excellent projects like B4RN notwithstanding).

The Policy Exchange appears to assume that any post-2015 strategy would automatically focus on areas that already have good broadband, which seems far from certain. It appears more likely that any extra funding would focus on the last 10% of rural areas where connectivity remains poor.

Dana Tobak, Managing Director of ISP Hyperoptic, added:

“I agree that it’s important to get everyone online, but that part of getting people to use the internet effectively is ensuring that they get a positive experience, and for that speed is essential. In 2015, 2Mb will not be enough to take advantage of the latest services, tools, and applications that will permeate the online world. It’s not about speed or reach; it’s about speed and reach.

Surveys of this nature are flawed because they ask people about their attitude to something that they don’t know they want. It’s why Steve Jobs didn’t believe in surveys. Let’s remember that to have a fully connected country we need people to have more than enough bandwidth, so that speed is no longer the conversation, rather the possibilities that the connection enables.

The important thing is that the Government continues to spend funds on long term infrastructure, rather than wasting taxpayer’s money on a programme that will immediately require further investment when it is finished. People also need to be educated on how to best take advantage of this infrastructure. There isn’t any reason that funding can’t achieve all of these objectives.”

A related survey of 2,000 people and 500 businesses by Ipsos MORI for Policy Exchange found that 79% of respondents thought every household should be able to have access to the internet, but only a quarter (24%) think it is fair for people in remote areas to pay more.

It also discovered that people are split (49% vs. 49%) on whether it is more important to invest in connectivity, even if it means more masts and street cabinets, or to preserve neighbourhoods and the environment, even if this constrains broadband speeds and coverage.

The Reports Other Recommendations:

• Introducing a streamlined planning regime for local authorities wanting to accelerate the rollout of fixed and mobile connectivity for their communities

• Being more relaxed about developing government digital services that require a broadband connection, as part of a broader drive to get people engaged with the benefits of the web

• A stronger role for the Minister responsible for broadband, with a more explicit remit to promote economic growth opportunities from mainstream use of the internet

In either case it’s far from clear what the government will actually do, if anything, and plenty of money has already been spent on attempting to connect older people and those with lower incomes (e.g. the cheap PC and broadband scheme). Similarly it looks increasingly likely that we’ll see a change of government in 2015, which usually results in some degree of policy shift.

UPDATE 12:22pm

The Country Land and Business Association (CLA) has now added its comment to the report.

Dr Charles Trotman, CLA Head of Rural Development, said:

“We have long advocated a clearer Government focus on ensuring that all in rural areas have access to an affordable and effective broadband connection of at least two Megabits per second (Mbps).

As we stated in our own policy statement “Broadband Fit For Growth”, without universal coverage and the need for a universal service obligation, the rural/urban digital divide will simply be exacerbated. What is clear from the Policy Exchange research is that the majority of the British public agree with us.

Around 20 percent of those who live in rural England and Wales are still unable to receive anywhere near the Government’s benchmark of two Mbps. There is still a huge amount to be done to ensure coverage is universal.

We believe the Government must do more to help the countryside. By seeking to form a strategic alliance with other rural interest groups to agree common objectives, we can help to deliver a comprehensive broadband strategy.”

The CLA said that it advocates a ‘patchwork-quilt’ model whereby other technologies, such as wifi and satellite, become widely available and used. It also accuses the existing Broadband Delivery UK (BDUK) framework of being “too bureaucratic” and of needing a system where contracts awarded to infrastructure providers include fair compensation provisions for any failure to meet time and coverage requirements.