Back to Basics says Ovum

Matthew Howett

In light of the recent Public Accounts Committee report on rural broadband, Matthew Howett, principal telecom regulation analyst at Ovum explains:

“The Public Accounts Committee’s report and the recent National Audit Office investigation both raise important concerns with the government’s rural broadband programme, however it’s the more sensationalist claims that will likely make the headlines – most of which are unjustified or overlook some of the realities.

“A chief criticism is around BT being a near monopoly. What the PAC seems to miss is the concept of competition for the market. Firstly it was never the intention to necessarily have lots of different firms rolling out broadband infrastructure in rural areas, rather they should compete on price for the right to do so. By all accounts and purposes this is what has happened.

Secondly what rarely gets mentioned is that any publicly funded network must be opened up at the wholesale level in much the same way the rest of BT’s network is, for other firms to come along and sell services to consumers at the retail level – another source of competition.

“Certainly the BDUK process has been far from plain sailing and some criticisms are real. The way the UK was broken into many small regions in perhaps a valid one. Initially having a rather lofty objective for ‘the best superfast broadband in Europe’ was also far from ideal, and mobile technology seems to have been disregarded for those especially hard to reach places. But then trying to find an example of a national broadband strategy that hasn’t gone without a hitch either in terms of delays or excessive cost is near impossible. Initially critics believed the UK government lacked ambition and should’ve followed the lead of countries such as Australia which abandoned the former monopoly in favor of an ambitious £20bn fibre to the home network. After years of delay and concerns about the cost, that has now been scaled back to deliver mostly fibre to the cabinet, but still at almost ten times the cost of the UK project.

“To delay the spending of the remaining public money, as the PAC report recommends, is probably not the right thing to do at this stage. For too long the UK has been branded as being on a ‘low fibre’ diet and dogged by claims that consumers in rural areas will be condemned to the slow lane for years to come. Things have moved on immensely in the last couple of years, mostly as a result of the private money being spent by companies such as BT and Virgin Media. To halt the rural broadband process now would only serve to leave rural areas without the decent broadband speeds they deserve.”

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