Analysts question cost of Lords' 'digital hubs' idea

A proposal by a group of peers to have digital hubs set up across the UK is unrealistically costly, analysts have warned.

Analysys Mason said it had calculated a "back of the envelope" sum of £1bn for building open-access hubs that "serve the most rural 10 percent of the UK" — the part of the country where such hubs would be most needed. The figure does not include the cost of connecting premises to the hubs, although the proposal sees that cost borne by local ISPs and communities anyway.

"The major challenge faced by the House of Lords proposals is that they appear to require substantially more public funding than is currently available," the analyst house said in a statement late on Tuesday. "As the report notes, the amount of government funding allocated to broadband schemes totals £750m — less than our estimated cost for building hubs in the most rural 10 percent of the UK."

The scheme was proposed earlier on Tuesday by a House of Lords communications select committee. The proposal was part of a wider report into the alleged failings of the government's broadband policies, and the peers were very clear that it would be up to the government to cost it.

The lords argued that it was in the government's interests to do so, as the scheme would obviate the need for the connections to premises receiving government subsidy.

The overall message of the report was that the government has focused too much on speed targets, at the expense of future upgradeability, and at the risk of giving BT a bigger monopoly on fibre than it used to have on copper.

The government is yet to respond in full.