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Govt considers tax pounds for ADSL roll-out

But talks itself out of it

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The Government is to assess whether it should use tax payer's money to fund the development of a broadband infrastructure in Britain.

However, while the Government is happy to commission research to clarify the "need and economic justification" for intervention, it has, effectively, already ruled it out.

According to a Government report issued yesterday - UK online: the broadband future - it would cost £1 billion to upgrade all of BT's exchanges so that they become ADSL-enabled by the end of 2002.

While such a move might appeal to those who have lost faith in the current pot-holed path to broadband, Government intervention would also throw up a number of difficulties.

UK online: the broadband future suggests that such intervention might prove to be a major disincentive to investment in other forms of broadband communication. It claims it would also reduce the competitive pressures on BT reinforcing its status as Britain's dominant telco.

And even if the Government were to subsidise the roll-out of ADSL, who's to say that, in the report's words, that ADSL might prove to be the "Betamax of the broadband market"?

The Government's strategy, it seems, is to stimulate demand and hope that broadband suppliers respond. ®

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The Government's report can be viewed here

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