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The Scottish Executive has published a report into how it intends to tackle the problem of encouraging the roll-out of broadband services in rural areas.

Connecting Scotland: our broadband future takes its lead from the report UK online: the broadband future published earlier this year by the British Government.

In both cases there is a belief that competition is key and that government intervention should only be considered as a last resort. Instead, the Scottish report recognises the role government can play in stimulating demand for broadband.

Echoing a similar initiative suggested by the British Government, the Scottish Executive also intends to pool public sector demand (from schools, local authorities and health services) for broadband in the hope that this will be enough to entice suppliers to invest in the necessary infrastructure in rural areas.

It also favours splitting this aggregated procurement into zones. The Highlands and Islands, and the South of Scotland are the first areas to be identified and bidding for contracts to offer broadband services in these zones is expected to begin next year.

However, this approach has come under fire from some operators. The Sunday Times reported that both Thus and BT Scotland shared doubts as to whether the initiative could work.

Despite this, the Scottish Executive claims it has received "favourable and in many cases very enthusiastic" responses from potential suppliers about its plans.

The snag is, broadband is a costly business made worse by geographical spread and low population density. This not only affects parts of Scotland but other parts of the UK.

This was pointed out by Wendy Alexander, the Scottish Executive's Minister for Enterprise and Lifelong Learning, in her introduction to the report.

She said: "Demand is currently fragmented among customers and between suppliers. In more populated areas this may result in healthy competition. In less populated areas individual telcos may not have sufficient evidence of demand to invest.

"If there are indications that the current operation of the market will not provide connectivity when it is needed we need to identify solutions now," she said.

In July BT said it planned to launch a broadband satellite service in the Highlands and Islands of Scotland and Northern Ireland before rolling out the service to the rest of the UK. ®

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