Slow progress on broadband Britain

Laying cable in the ground can be a costly business

By Jane Wakefield BBC News Online technology staff

The government should do more to extend the range of high-speed internet services in the UK, a major report into the progress of broadband Britain has found.

In its second annual report the Broadband Stakeholders Group found there had been progress in wiring the nation.

But it also saw plenty of room for improvement, especially if the government is to achieve its target of making the UK the best place for e-commerce by 2005.

The Broadband Stakeholders Group was set up by the government 18 months ago to advise on the state of high-speed net access in the country.

Countering costs

"There has been good progress this year but there is quite a lot of work to be done to make sure we have a chance of hitting those targets," Antony Walker, Chief Executive Officer of the Broadband Stakeholders Group, told BBC News Online.

Among its recommendations is the need to get an alternative infrastructure in place to provide even higher speeds for broadband access in the future and to extend the reach of the technology.

Broadband offers fast net access

The group advises the government to change legislation to allow non-telecom operators to fund the laying of cable in the ground, which can be a very costly business.

"We recommend third parties provide fixed infrastructure. That way it will be a real-estate investment rather than a telecoms investment," said Mr Walker.

Non-telecom operators are likely to be able to get more funding for such a venture in the current economic climate. They would also have 20 years to provide a return of investments instead of the five years offered for telecoms projects.

Wireless will also be crucial to getting broadband to the 36% of the population that are currently not reached by either ADSL, broadband via the telephone line, or cable.

The government controls the allocation of wireless spectrum - radio frequencies that can carry data - and so far attempts to sell off this spectrum have been less than successful.

Radical solution

According to the Broadband Stakeholders Group, the government is currently selling off the wrong kind of spectrum.

"The spectrum made available for broadband so far hasn't offered a commercially viable product. In order to get mass market appeal it needs to be low cost, have good range and preferably be self-install like ADSL," said Mr Walker.

People say the availability of broadband has influenced their decision about buying a house or where they locate their office

Antony Walker, Broadband Stakeholders Group

The government has the perfect solution sitting under its nose but that spectrum is currently reserved for military use, according to Mr Walker.

The report finds much to be proud of in the way Britain has embraced broadband in the last year.

Take-up has increased 300% since November last year and ADSL has come down in price by 30% since then.

One of the key factors driving take-up is the marketing efforts from providers such as BT, AOL and Freeserve.

The effect of the two cable operators, NTL and Telewest, can also not be under-estimated.

"It is often overlooked how the cable operators have driven broadband," said Mr Walker.

In fact, despite perceptions that BT dominates the broadband market it is actually the cable operators that have the lead.

NTL accounts for 36% of the broadband market, Telewest 24% and BT 21% the report finds.

Of BT's share of the market, half of the connections are via its own ISP BT Openworld and the rest is made up from internet service providers such as Freeserve and AOL which buy broadband wholesale from BT.

Need for speed?

The final piece of the jigsaw to put the UK on track to achieving its ambitions for broadband will be driving home the message to consumers and businesses about why they should have it.

The Broadband Stakeholders Group employed an anthropologist to study how small groups of users interacted with the technology.

"One of things they didn't talk about was speed," said Mr Walker.

"Instead they found themselves taking their time, relaxing and doing more on the net. We have a lot to learn from how users react to broadband," he said.

But already it is becoming clear that those that have made the transition would not be without broadband.

"Anecdotally we hear of people that say the availability of broadband has influenced their decision about buying a house or where they locate their office," said Mr Walker.