No need for public funds for next-gen internet

The case for public investment in the internet is “weak at best,” according to a report by a government business agency.

The UK’s internet infrastructure is important to the economy, but isn’t in such a bad state that it needs seeing to with taxpayers funds, the report from the Department for Business Enterprise and Regulatory Reform (BERR) said.

The review, which was led by Francesco Caio of Lehman Brothers, argued that the billions of pounds needed to upgrade to fibre networks should come from private firms.

"The case for a public intervention at this time is weak at best," Caio said. “But it is the right time to create the conditions that will deliver a competitive NGA infrastructure in the next five years.”

Caio added: "The government needs to play its part across a number of areas in supporting development of NGA. It cannot afford to be complacent."

A report earlier this week said upgrading to fibre would cost between £5.1 billion and £28.8 billion, depending on coverage. BT has said it would invest as much as £1.5 billion in new infrastructure.

Earlier this year, communications watchdog Ofcom said the government has a role to play in rolling out new networks, but admitted full funding was "very unlikely."

"Although demand for bandwidth and Internet traffic continues to exhibit strong growth, there is little evidence that in the short term the UK is going to suffer from the lack of an extensive next generation access network," Caio said.

However, a separate report released earlier today suggested that the UK is already suffering from slow broadband connections, and is trailing behind much of the developed world in the quality of access.

In response to the report, business secretary John Hutton said: "We will consider his recommendations as we plan how to make sure the UK remains one of the world's leading internet economies…We want to create the right conditions for private sector investment and stand ready to play our part in ensuring the UK has a competitive infrastructure in the years to come."

The Caio report also advised the government to allow more radio spectrum to be used for wireless internet access and to allow broadband to be delivered using overhead cables. It also called on builders to include superfast broadband in all new homes.

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