Broadband investment “welcome but misdirected”
30th November 2011
The Government's decision to pump £120 million into high speed Broadband provision has been cautiously welcomed by the CWU as one of the few positive notes an otherwise "destructive and depressing" Autumn Statement yesterday.
But despite welcoming the Coalition Government's decision to invest in a number of key infrastructure projects in a bid to avert a devastating slide into recession, the CWU believes the Broadband move currently on the table will largely fail to address the most pressing gaps in provision because of its focus on densely populated areas which are already comparatively well served by commercial operators.
While CWU general secretary Billy
Hayes acknowledges the decision to press ahead key
infrastructure projects appears to mark a "positive change of
direction" by an administration apparently spooked by the
possibility of a return to full-blown recession, further analysis
by the union casts serious doubts on the specifics of the Broadband
package currently being proposed.
The CWU's key reservation - apart from the fact that the new money for Broadband now on the table is still just a fraction of the £1.2bn that would have been raised by the previous government's proposal for a Next Generation Access Fund - is that the new money will largely bypass the large swathes of the country which are currently being shunned by private sector Broadband investment because they cannot possibly offer swift commercial returns.
Billy explains: "The CWU has been calling on the Government to commit more funding to the UK's Broadband infrastructure to ensure that we keep pace with our global competitors - so, looked at narrowly, yesterday's announcements can be viewed as a very small step in the right direction.
"The Government's first priority, however, should be to ensure all homes and businesses have access to a reliable Broadband service, so we're surprised that the lion's share of the extra funding has been allocated to urban areas where competition is already intense amongst operators and private investment is relatively strong.
"As such, the CWU believes that this one small apparently 'bright spot' in an otherwise destructive and depressing Autumn Statement has managed to bypass the parts of the country that need public sector Broadband investment the most - namely those areas which are being largely shunned by private sector investment."
Deputy general secretary (telecoms) Andy
Kerr adds: "Our fear is that this misdirected
approach might actually discourage plans for private funding in
urban areas, and would seem to go against the regulator's aim
of encouraging efficient investment. It certainly won't help
the millions of households in rural areas who are crying out for a
decent broadband service.
"When it comes to getting access to Broadband, Cameron's Big Society appears to be all very well as long as you live in an urban area. The danger is that investing public money into already functioning markets will distort competition in those areas, at a time when so many rural areas are devoid of broadband competition and desperately in need of public funding."
At present the new money is weighted five to one in favour of urban areas, with just £20m of the £120 million announced yesterday earmarked for the Rural Community Broadband Fund.
Set against the previous government's proposal for a Next Generation Access Fund that would have netted £1.2bn for investment in a truly national high speed broadband infrastructure, the new money announced yesterday looks like too little, too late, and largely focussed on the wrong areas.
Andy concludes: "The CWU still supports the introduction of a levy on fixed and mobile operators to create a broadband fund that will help deliver a world class digital infrastructure for the whole of the UK. We also call on the Government to set aside a proportion of the £3-£5 billion expected to be raised by next year's 4G spectrum auction should be reinvested back into the UK's telecommunications infrastructure.
"While the signal now exists that the Coalition Government has belatedly recognised that public investment in high speed Broadband is not just welcome but essential, it's hard not to see yesterday's announcement as a missed opportunity."
