Wait to deploy next-gen broadband, report says

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Moving to "next-generation broadband" could deliver huge benefits to the British economy - but telcos should wait before deploying new technology, according to government advisors.

The Broadband Stakeholder Group, which describes itself as the "UK Government's leading advisory group on broadband", said the "the UK could reap significant social and economic value from the wide-spread deployment of next-generation broadband."

It estimates that introducing high-speed technology such as fibre-to-the-cabinet and fibre-to-the-home to 80 per cent of the country's homes could cost £16 billion. But it says "benefits to the UK associated with the wide-scale deployment could outweigh the cost of deployment."

BT has long argued that it can't make the business case for a nationwide deployment of fibre-to-the-home, and the report is clearly sympathetic to BT's case. It suggests that now might not be the right time to invest in the network - to the undoubted frustration of those struggling on slow broadband speeds in rural areas.

"There is still real uncertainty about the extent to which investors will be able to realise enough of this value to justify investment. The BSG believes that in the short-term, there are unlikely to be significant costs associated with delaying deployment and there may actually be considerable value in waiting for a limited period in order for more information to emerge, before investing," it stated.

However, the industry and Government has been warned not to dither. "On the other hand, the UK can't wait too long," said BSG chief executive Anthony Walker. "If widespread network deployment didn't happen in the medium term (perhaps three to five years), then this report suggests that the UK could be losing out."

There's already strong evidence the UK is losing out, with a report last year claiming that our broadband was amongst the slowest in Europe with average speeds below that of Slovakia, Hungary and Holland. Indeed, Competitiveness Minister Stephen Timms summoned telco chiefs to meeting last year to discuss Britain's slide down the world broadband league.

However, in a separate report, the Broadband Stakeholder Group had dismissed the suggestion that Government should part-fund the fibre rollout.

"In our 2007 report... we argued that, although we could see a role for the public sector in the future - extending coverage into areas of persistent market failure - the UK market was still in a pre-investment phase and the risks of intervention today outweigh the risks of non-intervention. For this reason we argued that, as a general rule, the public sector should forbear from intervening at this stage. This remains our position today."

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