AOL fights MPs over rural broadband

The world's biggest ISP resists suggestions that telcos should fund broadband expansion in the countryside - putting it on BT's side for once

Internet service provider AOL clashed with an influential committee of MPs on Thursday morning, rejecting suggestions that telecommunications firms have a social obligation to provide broadband connections to rural areas when it isn't yet commercially profitable.

The world's largest ISP told the joint parliamentary committee for the Communications Bill that if the government wanted broadband to be available to everyone in Britain, it would have to foot the bill.

"If the government want to set a target for the rollout of broadband then it is fair that it should pay for it," said Simon Hampton, AOL's director of European public affairs.

"BT's ADSL is available to 66 percent of households, on top of which there is cable and satellite broadband, and soon there will be 3G as well. If the government wants broadband to be further available then that is a social policy objective, and I don't think the telecoms industry should have to pay for it," Hampton added.

Several members of the committee voiced their disagreement with AOL. Committee chairman Lord Puttnam, the successful film director and Labour peer, insisted that the private sector had an obligation to work in partnership with government to create social equality.

Nick Harvey, Liberal Democrat member for North Devon, agreed with Lord Puttnam. "It isn't right that when a new technology appears, the telecoms industry should cherry-pick the profitable bits and then leave the government to come to the aid of everyone else," he said.

AOL's comments put it in the unusual position of supporting BT, which has insisted for months that it cannot be expected to provide high-speed Internet services in sparsely populated parts of Britain where there are not enough potential broadband users to justify the expense.

BT chairman Sir Christopher Bland startled another group of MPs earlier this year when he told them that -- unless government provided significant financial help -- some parts of Britain would not get broadband for another 20 years.

Faced with such gloomy predictions, support is growing within Westminster that broadband should be made a "universal service" -- which would mean that telcos would have to supply it to every UK customer in the same way that basic telephony services are provided across Britain today.

Hampton has made it clear, though, that it doesn't feel that the telecoms industry should pay this cost.

Unfortunately for AOL, though, it didn't get much support from Microsoft.

The two companies appeared side-by-side before the committee, which usually means that they share the same views on whatever they expect to be questioned about. When asked for its views on broadband rollout, Microsoft -- perhaps nervous of being savaged by the committee -- took a more conciliatory approach.

"We don't look totally to the government to solve broadband rollout -- it must be a partnership. Industry must create compelling applications, and the government must encourage people to get online," said a senior Microsoft executive.

"Perhaps you and AOL should get together and agree a unified view about this," responded Lord Puttnam.

In the US, AOL Time Warner is one of Microsoft's most vocal opponents, taking a large part in Microsoft's ongoing antitrust lawsuit.

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