Conservatives Pledge Super-fast 100mbps Internet By 2017

The Tories have surprisingly come forward with an election pledge to bring 100mbps super-fast broadband to the majority of British households by 2017 by intervening in the UK internet market.

The Shadow Chancellor George Osborne said on the Andrew Marr show on the BBC that its delivery would be funded by diverting part of the BBC licence fee.

He said that "In the 21st Century let's build the super-fast broadband network that will create hundreds of thousands of jobs for Britain."

Osborne did not say what he exactly meant by the majority although we can safely assume that it's more than 50 percent. The current Labour government has said that it will provide with a Universal Service Commitment (USC) of a minimum of 2mbps by 2012, in time for the London Olympics.

The conservatives' plans would cost each household around £5 compared to the Labour's £6 broadband tax. In addition, Osborne also confirmed that it would be allowing private investors like Sky and Carphone Warehouse to use BT's network.

By 2017 however, it is highly likely that with or without government intervention, a significant portion of broadband customers will run on 100mbps speeds or more.

Virgin Media has already started to test 200mbps speeds and BT has already start selling 40mbps cable-based broadband service for little more than their copper-based ADSL one.

Our Comments

Competition, not government intervention, will drive innovation. Even if the Tories come to power, one can expect that both BT and Virgin Media - together with the other major players will have 100mbps or more internet services by 2017.

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