Rory Cellan-Jones

A Budget for broadband?

  • Rory Cellan-Jones
  • 22 Apr 09, 14:54 GMT

Earlier this week I wrote that we were still no clearer about who would pay to bring superfast broadband to every corner of the UK. But after today's Budget we are perhaps a little more clear about the way the government plans to get bog-standard broadband to places that don't have it now.

The chancellor put his weight behind the proposals in Lord Carter's interim Digital Britain report for a Universal Service Obligation for broadband. He even suggested a speed and who would pay for it. The answers? 2Mbps (not "up to" I note) and you, the BBC licence fee payer. But relax, he's worked out that there's enough money swilling around in the pot set aside to help with digital switchover.

£803m was ring-fenced from the licence fee to help people who might struggle to afford new equipment as they were obliged to switch to digital television. The National Audit Office recently calculated that as much as £250m of that might not be spent. All sorts of people were looking at that money and licking their lips, but it looks as though it will now be transformed into the Broadband Switchover Fund.

But there are still a few questions to be answered. The chancellor said in his speech that the aim was to reach "virtually" everyone by 2012. Right now, depending on whose figures you believe, just 1% of the country - or around 250,000 homes - cannot get broadband access. So who will still be left out after 2012?

Then there is that 2Mbps - will that be enough to count as broadband by 2012 when around half the country will have access to 40Mbps or more?

And finally - is £250m really enough? I suppose that depends on what kind of technology is employed. A friend who knows about these things told me the other day that covering the country with Wimax masts - which should supply 2Mbps - would only cost £750m, and you'd think there would be enough of a commercial market in Wimax to cover the shortfall.

In any case, the government says that any extra cost could be met through "additional funding mechanisms", whatever they may be.

In short, it does look as though we've taken a significant step towards universal broadband coverage. Now all we need to do is sort out who will pay for the next generation network the government says is even more vital for our economic future.


  • Comment number 1.

    Thanks for the clarification. It's good to see some support.

    Will the BBC be commenting on the attempts to limit the internet in the EU Telecoms package? has got some detail

    I cannot reconcile the obvious desire to see a UNiversal Service happen yet allow ISPs freedom to define what services work or do not work.

  • Comment number 2.

    Ask the "friend who knows" exactly what percentage of the country by land area his £750m would cover. Also ask how many simultaneous users would receive a 2M throughput via WiMax in the area of one mast.

    The answer to the last part is well below 100 I suspect.

  • Comment number 3.

    As the largest part of this cost is putting the infrastructure in place, rather than the materials used in doing so, would it not make more sense to lay fibre, to the areas in this they plan on providing ADSL to.

    Compare this to the stance taken by the Australia government of providing fibre to practically every home in the land, and we can see how inept the UK governments image of digital Britain really is.

    All I can see happening is the governement blowing hundreds of millions providing this paltry 2meg service, and then having to spend billions several years down the line upgrading the service, but if there is one thing we know it is this governments ability to waste money.

  • Comment number 4.

    How does Darling standing on his hind legs saying "Digital Britain" have any effect on BT (who own my local loop) deciding that changing aluminium cables (last 800 metres) for fibre to the cabinet and fibre from there to the exchange will have an commercial value?

    It's an empty promise unless BT can rebuild the infrastructure AND make a healthy profit from doing that, otherwise they won't do it. Their shareholders won't let them.

    Virgin (in their previous incarnation as NTL) left us high and dry when they put the cable into the other side of Basingstoke and didn't put it in here in the south side of the town. So they don't look like likely candidates to replace BT any time soon.

  • Comment number 5.

    I hope they go down the WiFi route...

  • Comment number 6.

    A WiFi route would be a dead-end, the range is too short, long range Wi-Fi is possible but it becomes directional.

    WiMAX is a possibility to cover some areas, but then we have Lord Carter talking of mobile and satellite, so who knows we might see a satellite dish in an area with WiMAX towers using the satellite for backhaul.

    At a time when people are now starting to buy games online (15GB downloads anyone!) then 2Mbps three years away looks slow. I started off on 2Mbps back in 2000.

    The virtually everyone comment has me worried, some parties say now that virtually everyone has broadband who wants it. SO it might mean not many people benefit.

    £250 million, 250,000 homes without broadband, cost of fibre roll-out is around £1000 per home depending of course on whose estimates you believe. Its a nice thought, but it will remain just that.

  • Comment number 7.

    This is good news for me as I live in a rural area and struggle to get any better than 300 Kbps, so 2 Mbps would be a huge improvement (I might even be able to use iPlayer, lol). However, I'm not sure that the amount of money being talked about will be enough for the wide scale renewal of the ageing BT infrastructure that would be required to deliver increased speeds. I hope I'm wrong but I won't hold my breath.

  • Comment number 8.

    So "virtually" all the country already has broadband. Great, job done, target will definitely be met in 2012. As for the rest of us paying for second home owners to get broadband to their cottages in Wales.... not so sure this should be a government priority. I agree with the more technology-centric next generation: if you're going to subsidise something, then subsidise LTE or whatever.

  • Comment number 9.

    I am not convinced HMG will fund the broadband infrastructure necessary to enable all to have the acceptable minimum bandwidth.

    2Mbps is not enough for the next 10 years, even if this is to each house (not the current shared access that means for me 1.5Mbs when my neighbours are not accessing the internet).

    HMG need to fund fibre or WiFi to all homes such that bandwidth can be increased with advances in technology.

    I note Australia's commitment.

  • Comment number 10.

    I have to smile every time I hear the UK politicos boast about "Broadband Britain" while keeping most of the population in the dark about real broadband speed in the rest of the developed world. Here in Tokyo, the standard installation to every home is 100 Mbps (50 times what the UK might have in 2012) and the main cities are rapidly moving to 1 Gbps (500 times the UK in 2012). Even in the furthest reaches of the remotest backwaters, the ADSL speed over copper is 8 Mbps and is soon to rise to 54 Mbps.
    In the labs of the major communications makers (where I work) we are testing 40 Gbps with expected rollout in 2012.
    For 1 Gbps fiber access with two IP phones (free calls anywhere in UK), internet access, and HDTV over fiber with VOD—separate charges—I pay 9600 yen (£67)!
    BT and other UK telcos need a rocket.

  • Comment number 11.

    Japan is aiming for 90% availability of FTTH in 2010.

    Fibre is cheaper per month than DSL over there.

    Ignoring the speed of downloads and uploads, fibre brings low latency, more stability to the table, i.e. no drop outs due to radio interference.

    Alas the UK is more concerned with Return on Investment over 3 years, than the 10 or more these days. If we had the Victorian cesspool problems today, the solution would be more frequent visits by tankers to pump them out, rather than fit for purpose sewers.

  • Comment number 12.

    #10 Thanks for post. Seems like a different world!

  • Comment number 13.

    My experience of broadband in 'remote' areas is that the standard BT service downloads at 1Mbps - 2Mbps therefore implies merely an upgrade to ADSL2+ (or 21st Century Network as BT brands it) - BT has a roll-out date for most exchanges already (ADSL2+ is currently available from 3 ISPs and has been available in some areas for a couple of years now). Government backing for a 2Mbps service is therefore hardly a 'risky' commitment as the project is already well advanced - the question is why it is taking BT so long to roll it out; it is the 'standard service' in most of Europe (including Croatia, Estonia, Portugal etc.).

  • Comment number 14.

    At the moment I get 512kbit/s and I'm only 7 miles from the centre of Cambridge so hardly in the middle of no-where. Not only that I have no access to any of the cheaper/free Broadband providers so am stuck with the full price BT offering (even though I only get 1/4 of the speed)

    Any ISPs getting government cash must be forced to offer universal access to their services and not allowed to cherry pick which customers they serve.

  • Comment number 15.

    I've got 100 Megabits cable (rated). At home and at work.

    Then again, I live & work in France... Luxury. ;-)

  • Comment number 16.

    I Have 2mg with Vigin Media Soon to be upgraded to 10mg
    as the minimum they Sell . But its very Rare I ever get 2mg 1.5 Is the norm and it often fails . We have TV digital from Virgin most of time
    works fine but there Boxes are terrible we are on our third .
    Service at best is poor to average depends on who you get on phone
    During day its Virgin callcenter in India and for simple things
    is okey but for Technical problems best wait untill eve to Get UK
    Techs who do there best . Virgin Does what we want most of time and
    even though we grumble they do there best


  • Comment number 17.

    I get 20Mbps with Virgin and I honestly can't fault it, even when it has gone off it's only ever bben a case of resetting my modem, but when you see the spe4eds available in other parts of the world you do wonder why Britain has to make such a song and dance about making even minor advances, the fact is superfast broadband won't take off in this country for at least a decade, not because nobody wants it but because our comms providers will never get near an acceptable price in that time. Virgin does the 20 meg package at a decent price as part of a bundle but their 40meg package looks way overpriced in comparison to faster services in Japan and France.

    Yet again it only serves to demonstrate the utter folly of privatising utility companies when every time a large capital investment is needed it's cap in hand to the government time again.

  • Comment number 18.

    If people knew (including journalists) actually knew how broadband works then you would now that all this is barking up the very wrong tree.

    This from Sweden:
    In 2013, the operators expect 99 percent of the Swedish population to have access to mobile broadband at speeds of up to 80 Mbit/s in rural areas and up to 150 Mbit/s in urban areas.

    2Mbit isn't enough now. It will be almost useless come 2012. Anyone still using a modem?

  • Comment number 19.

    It is certainly the case that infrastructure costs and the main driver is population density - i.e. how many people can use the infrastructure being built. That's the case for terrestrial, copper, fibre, mobile masts, Wimax - everything. Except, of course, satellite. The infrastructure is already in orbit as every Freesat and Sky viewer can testify. The only issue for 2-way satellite broadband is the CPE is not as cheap as a giveaway ADSL box. But if less than 300 quid covers your site, that's a lot less than tens or hundreds of thousands of pounds quoted by the telco to get a line to you - or even more in some cases. That has to be picked up either by the user or the taxpayer.

    Against that, the satellite option should be seen as much more economical and, more importantly, available right now with no waiting for network build, mobile mast planning permission etc. And did I mention it is inherently green? The satellite runs on a few hundred watts of solar power - what does the telco network take in megawatts?

  • Comment number 20.

    Sounds like good news to me although I am inclined to agree with earlier comments. My opinion on UK Broadband issues is that upgrading Telephone Exchanges may temporarily resolve some of the issues however its still not a long term solution to the Digital Revolution.

    Going from 8 to 24mb (best case scenario) is good but should really only be for those in rural areas. Densely populated cities need fiber optics to keep up with other countries such as Japan and the US.

    I have tried many different firms on ADSL, after doing loads of comparisons on with little improvement between them. At this point I wasn't aware that my distance from the exchange was causing the issue, only about 3KM. I can actually get much better speeds over the 3G Network but that still isn't really a good solution because of the monthly bandwidth restrictions mobile carriers currently impose on its users, I pray for the day they open it up for "unlimited" users.


  • Comment number 21.

    I'm glad that there is finally starting to be more of a focus on improving broadband connections in rural locations.

    I agree however with the comments above, i can't quite see there being enough money left in the pot to achieve all this though.

  • Comment number 22.

    I think the proposed 2Mbps connection rate is woefully slow to cover the 5 years or so. I'm fully behind the plans for Broadband Britain and agree it's vital that more is done to help bring broadband speeds to rural areas. Problem is i just don't think the current budget and projections are going to be enough.

    I have a few family members who are really paying through the nose for their broadband access (with a few even resorting to payg broadband packages to avoid the monthly costs), and due to the prices have considerably cut down on their internet usage. During peak times they've told of their struggles to successfully watch a video on YouTube which to be honest i cant imagine.

    But ultimately i can see the government having to pour in even more money to help boost the coverage and infrastructure once we hit 2012, because to be honest 2Mb just isn't gonna cut it then - it barely does now.

  • Comment number 23.

    The government's budget announcement towards funding for broadband may be lower than expected for many but the important thing to consider here is that it brought a positive note among the Citizens of UK. As you said, in 2012 majority of people will have access to more than 40 MBPS speed. But 2 MBPS broadband in rural areas seems quite lower but the important thing for the government is to make sure that everyone is connected to broadband. If government achieves this target, then we can easily upgrade the technology to the next level and so on. With the emergence of mobile broadband and satellite broadband, the broadband reach-ability will definitely increase.

  • Comment number 24.

    2 Mbps... that is laughable performance even now, and my mobile phone delivers 4 times that speed. So I am interested to know more about the decision making process that led to such a figure, and more importantly, why the BBC are not being more critical. I imagine it would be along the lines of a couple of technically incompetent MPs asking BT, a commercial provider, what could they definitely achieve, in order to ensure a 'tick in the box'.

    Here in Amsterdam, I have 120 / 10 Mbps at home (95 Euros a month including telephone, digital tv, premium movie channels, a PVR etc), 100 / 100 Mps at the office, (85 Euros a month, no limits), and the choice of using my phone at 7.2 Mbps / 512k for 9.99 Euro, or WiMax to 12 / 2 Mbps for 44 Euros a month.

    Perhaps its because there is no monopoly such as BT that has hindered progress here.


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