The UK Government has publicly stated a goal for the country to have the best broadband infrastructure in Europe by 2015. As a result, Broadband Delivery UK (BDUK) - a team within department for culture, media and sport (DCMS) - was set up to deliver the Government's vision of bringing enhanced broadband services to all parts of the UK.

 

BDUK is distributing £530 million (€616 million) of funding to bring improved broadband connectivity to UK homes and businesses that will not be served by the commercial market. The strategy builds on the Digital Britain report of 2009, which stated that market forces would address the broadband requirements of two thirds of the nation, but there was a need for public intervention in the 'final third' where market forces are unlikely to be able to justify investment on a commercial basis. To date a number of local authorities have already received funding with the focus being on rural initiatives.

 

However, the belief that market forces will deliver adequate services to two thirds of the market is highly questionable and there is evidence of gaps which also need public support and intervention.

 

It is certainly true that BT and Virgin Media are stepping up the rate of deployment. Nevertheless, the investment required to provide next generation broadband services across the country is many billions of pounds. BT and other carriers need to phase the roll-out in accordance with their financial constraints and commercial considerations. Investment has tended to go to those areas where there is intense competition and a concentration of large businesses - often in major city centre locations. However, many cities and towns across the country are not receiving the market-driven investment by the telecommunications industry that the Digital Britain report and UK government policy assumes. They fall between two stools - not served by the market or the Government's policy for assistance.

 

Market segments impacted in this manner include:

 

- businesses in urban areas which are located outside the central business districts. For example large areas of London and Birmingham do not have access to superfast broadband services.

 

- many small and medium sized businesses in urban areas are using basic ADSL services and often experience low speeds due to contention. Typically, SMEs receive less than 7Mbps even in major urban conurbations - whereas research shows that they need 20Mbps to 50Mbps symmetrical services to undertake applications such as video and image transfer and file sharing.

 

- urban areas in need of regeneration are not receiving investment and are caught in a cycle that needs to be broken.