Minister mulls intervention in broadband market

Minister of State for Competitiveness Stephen Timms has called a summit on public sector intervention in the broadband market, saying that other countries are laying down fibre networks which outstrip the UK's current infrastructure.

"Today we face a new challenge. Other countries are starting to invest in new, fibre based infrastructure, delivering considerably higher bandwidth than is available in the UK today," he said.

Timms said that the Government must look at getting involved in the market for broadband infrastructure if that is what is needed to prevent the UK lagging behind.

"I see it as one of my highest personal priorities that we have a high performance telecommunications infrastructure in every part of the country, enabling us to compete successfully on a global basis," he said. "That is why I have decided to chair a high level summit later this year to consider the circumstances that might trigger public sector intervention, the form that intervention might take and at what level it might sensibly take place."

The UK is not as advanced as European neighbours when it comes to the sophistication of the 'last mile' of telecoms networks, the link between homes and telephone exchanges.

Other European countries are actively looking into replacing copper lines with fibre optic ones, but little such activity is evident in the UK.

Government intervention would not have to be as severe as actually paying for work to be done. One way it could affect the market for broadband, say observers, would be to help make civil engineering cheaper to undertake to lower the cost of laying cables, or allowing fibre to run in municipal civil infrastructure.

"Other countries are investing in higher speed broadband and the UK isn't," said Kip Meek, chairman of the Broadband Stakeholder Group (BSG), a group of industrial advisors to the Government on the issue of broadband.

"If we want to see the UK stay ahead amongst the international leaders in broadband, we must find a way to encourage timely and efficient investment. We're not looking to government for all of the solutions, but we are looking for ministerial leadership," said Meek.

The BSG warned earlier this year that lags in broadband infrastructure building would not only cause the country to fall behind international competitors for inward investment and economic growth, but would widen the domestic digital divide.

The body called for public sector intervention in the broadband market "where persistent market failure is likely to occur".