Broadband for all - government pledges

Government attempts broadband rescue with a Heineken strategy

The government moves to combat the growing broadband crisis Tuesday, with a "Heineken strategy" to get high-speed Internet services available to all parts of the country.

In a report -- submitted to the PM by e-minister Patricia Hewitt and e-envoy Andrew Pinder -- the government sets itself the goal of becoming "the most extensive and competitive broadband market in the G7 by 2005". It pledges a £30m spend to combat the growing rural/urban digital divide and promises to replay the disastrous auction of broadband fixed-wireless auction in the summer.

With an election looming, broadband is becoming a hot political potato for Tony Blair who has committed his government to universal Internet access by 2005. Problems opening up BT's network to competing operators and BT's own fumbled ADSL rollout have added to concerns that UK consumers will have to content themselves for the foreseeable future with narrowband services.

AOL, which is considering legal action against BT for its rollout of ADSL, claims the government's broadband plans are likely to be "stillborn" if it doesn't act quickly.

The government is desperate to extend the reach of broadband but a quick glance at the report's projections for broadband coverage reveals that huge swathes of the country will remain reliant on narrowband. In fact, nearly half of the population of south-west England and the whole of Wales will have no foreseeable broadband coverage. The report acknowledges that satellite systems could be used in these areas, but admits it is as yet unclear whether the technology will be deployed.

Speaking at the launch of the report, entitled UK online: the broadband future, e-minister Patricia Hewitt acknowledged the importance of broadband to both consumers and businesses: "Consumers with broadband stay on the Internet up to four times as long as people forced to use narrowband connections. Small businesses are twice as likely to trade online with broadband," says Hewitt.

The government, she says, is extremely concerned about the lack of coverage so far. "The map makes it clear that we face the danger of an urban/rural divide. Many rural areas have little or nothing available. We are not prepared to allow this."

The government hopes that a second sale of broadband fixed-wireless (BFW) spectrum will prove more successful than the first, in which half the licences remained unsold. According to the projection map of broadband coverage in the report BFW coverage will account for the majority of high-speed services in the UK, although in a footnote the government admits it may be over-estimating this.

Hewitt claims that companies have shown an interest in buying BFW spectrum the second time around and claims many were put off the first time by "hyped press reports" about how much the spectrum would cost. She claims the licences will cost "next to nothing" when they are auctioned this summer.

The government also plans to throw £30m at the growing problem of a broadband divide between town and country. The cash will be distributed to Regional Development Agencies who in turn will create "innovative schemes" for getting broadband to the places that traditional technologies can't reach. This is part of what Hewitt dubbed the "Heineken strategy". As an example, she suggests that people in a particular rural area who want to work or run a small business from home could to be brought together in "broadband centres".

The Heineken strategy will also bring all the procurement processes currently used for raising money for public sector broadband -- in schools, libraries and so on -- together regionally to get better value for money.

Hewitt denies that in order to tackle the high price of broadband and the lack of coverage the government must first tackle BT's monopoly of local phone lines. "I don't accept the premise," she says. "BT is making a very substantial investment in broadband. They already have 100 ISPs offering wholesale services and then there is cable. Just as we saw the price of narrowband fall rapidly so we will increasingly see a competitive market in broadband."

The e-envoy Andrew Pinder also denies that the government is under-investing in broadband, describing the £30m investment as the "tip of the iceberg". Hewitt points out that a cautious approach is preferable to the huge spend Singapore made in broadband where currently only 3 percent of the population is using high-speed services.

The news that matters is not the puff, that BT expects to cover "half the population of the UK" with ADSL capability by early summer, and will have reached 70,000 subscribers by April. What Guy Kewney thinks matters is -- whether the various super-powers in the comms business can agree a way of doing business. Go to AnchorDesk UK for the news comment.

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