Industry group warns on UK's broadband future

Stuart Corner
Tuesday, 17 April 2007 06:56

Opinion and Analysis

The UK's Broadband Stakeholders Group (BSG) has just produced a report on next generation broadband which should be required reading for all concerned with the development of broadband in Australia.

The specific issue the report addresses is that, while the underlying demand for greater bandwidth is likely to continue to grow rapidly, a variety of factors – notably the current business models associated with broadband and the balance of risk and reward associated with investment in advanced infrastructure – mean that it is not clear that this demand will be served.

Just last week, BT was reported saying it had no plans for large scale rollout of FTTH saying it was largely a market matter and would require investment by 'UK plc'.

According to the BSG, "Currently, there seems to be little prospect for the widespread deployment of next generation broadband access networks in the UK, as commercial incentives are particularly weak. High costs, unproven business models and intense competition for revenues from value added services make it extremely difficult for UK operators to justify large scale investments in new access networks. This means that we cannot assume that the broadband value chain, as currently structured and regulated in the UK, will deliver the ever greater bandwidth that both upstream service providers and users increasingly expect."

And it warns that "If the UK was significantly to lag behind its international competitors in bandwidths available to citizens and consumers, the pace of innovation in the economy could slip behind that of those competitors. There is, therefore, growing agreement that the move towards next generation broadband services presents a difficult and serious challenge and that the implications for the wider UK economy could be significant."

The report defines next generation broadband very broadly: "broadband access services that are capable of delivering sustained bandwidths significantly in excess of those currently widely available using existing local access infrastructures and technologies."