Independent review says UK on track to be a leading internet economy

The UK's competitive telecoms market can deliver the next generation access (NGA) in broadband, and maintain the country's position as a leading online economy, but the Government and Ofcom need to be vigilant and play an active leadership role.

Next generation access represents the next major step forward in the evolution of broadband, to deliver faster services to homes and small and medium-sized businesses.

It will be important to British businesses making the most of new opportunities arising from rapidly developing technology and is essential for the UK's future economic success.

The review, jointly commissioned in February this year by the Department for Business and HM Treasury examined barriers to investment in NGA.

Mr Caio, from Lehman Brothers, has reported promising signs of investment by major players such as Virgin Media and BT, and, at a more local level, by communities experimenting with new deployment methods.

Unveiling his report "The next phase of broadband UK; action now for long term success" today, Francesco Caio said: "The UK and its consumers and businesses benefit from a competitive broadband industry and a rich choice of digital communications and entertainment platforms.

"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. I have therefore concluded that the case for a public intervention at this time is weak at best. But it is the right time to create the conditions that will deliver a competitive NGA infrastructure in the next five years"

The report has recommended an active role for the Government in monitoring development of the new networks and supporting their rollout through measures to lower costs without distorting the market.

Over the last ten years, massive investment by companies has led to a rapid development in broadband services. In 1997 less than 10% of the population had ever used the Internet. By the end of last year, 70% of the population were Internet users and more than half of homes had broadband.

As businesses and consumers increasingly demand a more powerful and seamless broadband experience, the next decade could see technology develop at just as fast a rate. The Government is committed to helping to ensure that companies are able to continue to build on the UK's world-leading position.