Page last updated at 15:49 GMT, Thursday, 8 January 2009

Can broadband save the economy?

By Jane Wakefield
Technology reporter, BBC News

Fibre optics
Can fibre light up the UK economy?

After the depression of the 1920s, US president Roosevelt started a public works programme which saw billions of dollars pumped into a series of projects, including the building of roads, airports and dams in an effort to reignite the economy.

In the UK there are increasingly loud rumblings that a similar thing is needed in the UK, with a superfast broadband infrastructure a prime candidate for cash.

Prime Minister Gordon Brown has recently acknowledged that such an infrastructure could play a part in pulling the country out of economic gloom - although he has stopped short of committing public money to it.

Nevertheless his comments have pleased those in the industry keen to get next-generation broadband out of the starting block.

"It would be easy to see broadband as an expensive luxury in difficult times but it is encouraging that Gordon Brown has recognised that investment in the broadband infrastructure could provide long-term benefits to productivity," said Antony Walker, chief executive of the Broadband Stakeholders Group.

Green tech

Man in office
Can fibre take people out of the office?

Broadband has become a political hot potato since Christmas with opposition leader David Cameron wading into the debate and pledging a "fibre to the home" (FTTH) programme within a decade if the Conservatives get into power.

Mr Cameron made his comments about broadband during a speech about green technology.

Fibre hasn't traditionally been seen as green, largely because of the environmental impact of laying cables.

But Mr Cameron pointed out that the long term benefits of such a technology, which allows for upload and download speeds of up to 100Mbps (megabits per second), could facilitate a new era of teleworking which in turn could reduce the traffic on our roads.

It is a point that the Fibre to the Home Council of Europe, which represents fibre operators, has long been keen to push.

"There is evidence that subscribers to Fibre to the Home technology do a lot more teleworking," said FTTH Council president Joeri Van Bogert.

A study done by US fibre operator Verizon found that 20% of FTTH subscribers teleworked compared to 5% of those on traditional copper wires.

"It is mainly due to the fact that fibre is bi-directional. Being able to upload things as quickly as they can be downloaded opens up more potential for home working," said Mr Van Bogert.

There is also evidence that there are financial gains to having a fibre network.

"A study of fibre was done in Kentucky, and when the figures were extrapolated it showed a positive impact of $231bn to the US economy," he said.

Man digging up road to lay cable
Roads are dug up every seven years

Even the lack of green credentials and the fact that it costs billions to lay fibre across a whole nation could be solved, thinks Mr Van Bogert.

"On average, a road is dug up every seven years for the laying of infrastructure such as gas or sewers. We are calling for governments to oblige firms to put in ducts for cable when the roads are dug up for other purposes," he said.

No action

Broadband camps are divided between those that think the current pressing issue is to get everyone up to speed in the UK and those that see super-fast broadband as the way forward.

The European Commission seems to be in the first camp and is pushing for a Europe-wide minimum broadband speed of 2Mbps.

The debate is unlikely to go away anytime soon although many think it is time for the conversation to move on.

"So far there has been a lot of talking and not much action," said Ian Fogg, an analyst with research firm Forrester.

One of the key problems with creating the next-generation network is how to balance the need for those that have created it to make money and still maintain a healthy broadband market.

"If you have one network you could get 40% of the street signing up and make your money back but the more networks there are the less people you will get. How to make fibre both competitive and profitable is a question that is still being grappled with," said Mr Fogg.

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