Rural broadband report raises valid concerns

Matthew Howett critiques the latest public accounts committee claims about the UK's broadband infrastructure

The Public Accounts Committee report on rural broadband raises valid concerns, but lacks understanding of the basics.

The report, along with the recent National Audit Office investigation, highlights important concerns about the government's rural broadband programme. The more sensationalist claims that will most likely make the headlines, though, are mostly unjustified or overlook some of the realities.

A chief criticism concerns BT being a near-monopoly. What the committee seems to miss with this is the actual conceptualisation of the idea of competition in this 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, this is what has in fact 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 as the rest of BT's network, for other firms to come along and sell services to consumers at the retail level – another source of competition.

But the process has certainly been far from plain sailing and some criticisms are real. Concerns over the way the UK was broken into many small regions are perhaps valid.

Initially promoting a rather lofty objective – "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.

Trying to find an example of a national broadband strategy that has not gone without a hitch either in terms of delays or excessive cost is nearly impossible.

Initially, critics believed the UK government lacked ambition and should have followed countries such as Australia, which has reportedly abandoned its former monopoly in favour of an ambitious £20bn fibre-to-the home network.

That sounds like a lead to follow on the face of it. However, the truth about Australia's project is that, after years of delay and concerns about the cost, it has now been scaled back to deliver mostly fibre-to-the-cabinet – still at almost 10 times the cost of the UK project.

To delay the spending of the remaining public money, as the 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, however, in the past few years, mostly as a result of the private money invested by companies such as Virgin Media and BT itself.

To halt the rural broadband upgrade process now would only serve to leave rural areas without the decent broadband speeds they deserve.

Matthew Howett is principal telecom regulation analyst at Ovum