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Next-Gen Broadband Review Won't Recommend State Aid

Posted: 05th Sep, 2008 By: MarkJ
Francesco Caio, the former CEO of Cable & Wireless and man now responsible for heading up a crucial government review into Britain's broadband infrastructure, looks set to recommend against major state aid support for next generation broadband services.

Caio notes that the country's existing online economy and broadband penetration is very dynamic and strong. However he appeared keen to stress that focusing on "putting £15bn into the ground" might not be the best move:

"I would hesitate to advise any government and say, 'Actually this is so important, so vital for the future of citizens, businesses and the media, forget it: let's go back to a more constrained market dynamics and put fibre everywhere'.

There are other technologies, wireless for one, that will increasingly deliver alternatives. You might run the risk of putting £15 billion into the ground. Although some other European countries are beginning to deploy next-generation access, I don't think we are in a position to say the UK is falling behind,
" said Caio.

"The infrastructure seems to be fit for serving the needs that we have and there are early signs of competitors beginning to plan ahead to deploy next-generation access. I can't see any reasons to be particularly concerned about a material gap in competitiveness."

Indeed Caio is certainly correct to point out that focusing on a single technology may not solve all of the problems and that existing infrastructure does serve “most” of our current needs. However the problem is how we serve the needs of tomorrow, not today.

Consumption of online content, especially video services, is increasing at a lightning pace and yet it can take many years to rollout a new infrastructure. Do we wait until the problem hits and then think about fixing it or act now and be prepared no matter what happens?

It’s no great surprise that a government funded review should be keen to steer clear of proposing state aid and BT’s recent fibre infrastructure announcement certainly went a long way to easing some peoples’ minds. The Guardian notes that Caio’s review will be presented to ministers during the autumn.
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