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Point Topic Warns UK Goverment Needs More Cash for Superfast Broadband

Posted: 04th Nov, 2010 By: MarkJ
point topicTelecoms analyst Point Topic has warned a Westminster e-Forum today that the £530m (reaching £830m by 2017) of funds allocated by the UK government to help bring "super-fast" broadband internet access to rural areas is "not nearly enough" to do the job.

Point Topic's Chief Analyst, Tim Johnson, said:

"The Coalition says it aims to provide the UK with the best superfast broadband in Europe, with a minimum 2 megabits per second connection speed for every household. To hit that they will have to find a lot more money from somewhere."

The group estimates that about 6.3 million homes and businesses will need some degree of subsidy to get superfast broadband services at an affordable price. But the whole amount proposed in the Spending Review would only reach 900,000 such premises, leaving 5.4 million without much hope.

Johnson noted that the French government were proposing to spend £570m of public money each year between 2010 and 2025 to achieve their broadband aims. That's more than the UK is budgeting for over the whole Spending Review period. However comparing one country's economic position with another is always fraught with difficulty.

Johnson added:

"If anything the French objectives are less ambitious than ours are supposed to be [and] they are also working on a more realistic timescale."

However France is proposing to fund this work by a tax on fixed and mobile phone connections, which is virtually identical to what the previous Labour government proposed (50p tax on all fixed phone lines) and was widely dislike. It won't be returning. Labour also suggested that it would take a minimum of £2bn-£3bn to achieve the goals by 2017, which is well above the current £830m figure.

Instead Point Topic believes that an extra £1bn could be found by changing the priorities of the Coalition’s £40 billion infrastructure investment programme and redirecting that cash to broadband, which they claim would provide more benefit per pound spent.
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