The case for increasing broadband speeds across the country’s rural areas has never been stronger – whether it’s for researching jobs or for downloading TV, the web is more crucial to our lives than ever. Even exam boards use online marking rather than paper scripts to grade GCSEs and A-Level papers.
In a recent 'You Are What You Click' survey for BT Infinity, nearly a quarter of web users were identified as what the firm called ‘Home Hubs’, using the web for banking, online grocery shopping and a host of essential services. Barely one in ten were ‘pleasure seekers’ whose main use for the internet was to play games and watch TV (see graphic above).
And it’s that which is crucial to understanding why the current programme to improve broadband speeds is important. Although entertainment is a major industry and a key part of the current use for the internet, it’s more advanced services that are taking an increasingly prominent role. So whether it’s using the net to monitor older people in their homes, and allow them to live in their own houses for longer, or whether it’s the vital infrastructure that will allow young people to set up new businesses in the countryside and consequently keep our rural communities alive, broadband is now an essential service.
That makes recent stories about delays to funding all the more worrying. Two issues are at stake, neither of them new but both of them real concerns. Local councils are running the process by which broadband contracts are awarded, and European authorities are concerned that their EU-wide criteria for broadband roll-out are not being met. Lobbying from communications regulator Ofcom and big internet providers could give the UK some leeway, but if EU bureaucrats cause hold ups, British consumers could suffer.
That, however, is a largely hypothetical concern – the practical reality is that almost all contracts are likely to be awarded to BT. While it and Fujitsu were bidding for a number of the contracts, the Japanese multinational has withdrawn from several areas because it’s concerned it will never make a profit. BT is now the sole bidder in Cumbria – as of yesterday – as well as Wales and the Highlands and Islands. It has already won the contracts in Rutland and Lancashire.
The concern is not so much that BT will rip off taxpayers at this stage in the process – in the Highlands it could well end up walking away from a bid that it thinks could never be profitable. Rather it’s that, with timelines suggesting it will take 12 years to make its money back, the company may be subjected to unpredicted market forces.
It is building infrastructure that it then offers at wholesale, regulated prices to internet service providers such as its own BT Retail, TalkTalk, Sky and others on the same terms. But the question must remain: if costs of installing fibre connections in very remote areas are so high, how long will taxpayers be subsidising network improvements and maintenance? Where new infrastructure is needed most and the free market is least likely to supply it itself, ministers who want Britain to have “the best broadband network in Europe” may need to decide to what extent taxpayers should think of the information superhighway like the road network. That could mean we all pay to keep it free of jams.
