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Saturday, 2 February, 2002, 10:01 GMT
UK broadband plans slow to bear fruit
Labour cabinet in session, PA
Original Labour cabinet had high hopes for broadband
Jane Wakefield

This time last year the UK Government pledged a broadband revolution. A year on, and with little increase in the number of connections, what has happened to its plans?

Government ambitions for broadband were high. As well as setting itself a target of universal internet access, it promised to make the UK the best place in the western world for broadband services by 2005.

The "Heineken strategy", as it was dubbed, was intended to get high-speed net access to all parts of the country in order to avoid a digital divide.

A year on, and with less than one per cent of homes with a high-speed connection, a digital divide is the least of the government's worries.

Instead of the nightmare scenario of city dwellers enjoying fast net services while their country cousins struggle on with the slow screech of a modem connection, few from all groups seem to be benefiting from broadband.

30m pledge

Nevertheless, the commitment to increasing rural access to broadband remains a serious one.

Around 35% of homes cannot get broadband, being too far away from a BT exchange to benefit from ADSL and cable also tending to bypass the countryside.
Village, BBC
Remote villages cannot get broadband
As part of the broadband strategy announced by the then e-minister Patricia Hewitt back in February last year was a pledge of 30m to aid remote places with their broadband connections.

The money has now been allocated to regional development agencies and an announcement on how they will spend the money is expected soon.

So far, only one pilot scheme is up and running in the east of England. It will be copied elsewhere if successful.

Under the scheme, local firms, public sector organisations and individuals will collectively register their demand for broadband services.

New infrastructure rejected

Alternative ways of delivering broadband - such as via satellite and wireless connections - were also a key part of the government's broadband strategy.

A group set up to look at ways of implementing broadband Britain recommended that a publicly funded infrastructure could be one way forward for making affordable high-speed internet access a reality.

The government rejected the proposal, claiming the demands on the public purse could not justify such expense.

Instead it is relying on alternative ways of delivering broadband.

Broadband facts
Public net access points in libraries
Tax breaks to businesses wanting to get broadband
Tax incentives to broadband content providers
Nationwide TV campaigns by cable companies for their broadband services
About 65% have access to broadband service
One such scheme is the auction of the broadband wireless spectrum - which would provide broadband via a fixed wireless connection.

First attempts to sell this to industry proved disastrous in the summer of 2000 with only half of the 42 licences taken up.

A second attempt in the autumn of last year has proved equally unpopular, with not a single licence sold so far.

Broadband alternatives

Satellite is also an option for rural areas and the government is paving the way to make the rollout of such services easier in terms of planning permission and licensing.

However, IDC analyst Hamish McKenzie is doubtful that satellite will be an option for consumers because of its high cost.

Computer cable, Eyewire
Is the new self-install ADSL service the answer?
A BT satellite service, up and running in Scotland, costs 70 a month with a connection charge of 900.

Which leaves the two existing ways of getting broadband into homes - cable and ADSL.

Cable is not a favourite for widespread access because of its tendency to be concentrated in urban areas but it is considerably cheaper than ADSL at around 25 a month. So far, around 100,000 homes have broadband cable connections.

ADSL is in the process of drastic improvements as BT offers a new improved self-install ADSL service.

It is offering this service wholesale to any ISP, which cuts out the need for an engineer to come to a customer's house.

While DIY ADSL slashes the installation charge for customers, doubts have been raised over how ISPs will be able to cut costs much below the current 40 a month mark.

This would still be too expensive for the mass market.

BT still main player

Back in February 2001, the government hoped ADSL could come down in price by opening up BT's telephone lines.

The process, known as local loop unbundling, was seen as crucial to a competitive broadband market.

While the government is still confident that the local loop unbundling process is "progressing", so far only a handful of operators have taking up unbundled services.

"It is difficult to see how the local loop unbundling process is going to move things forward," says Mr McKenzie. "It is not the panacea people thought it would be."

2002 will prove to be a crucial year for broadband and operators are more optimistic than last year it will begin to take off.

See also:

24 Jan 02 | Sci/Tech
Broadband goes down the drain
18 Jan 02 | Business
BT told to lower broadband cost
15 Jan 02 | Business
NTL boosts broadband plans
14 Jan 02 | Sci/Tech
Will 2002 be the year of broadband?
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