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UK.gov told not to subsidise superfast broadband

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Francesco Caio, the former top cable and Wireless beancounter tasked by the government with an economic analysis of next generation internet deployment in the UK, has come out against subsidies for fibre.

In his widely-trailed report for the Department for Business, Enterprise and Regulatory Reform, released today, Caio said the case for taxpayer-funded fibre is "weak". A report by the Broadband Stakeholder Group on Monday said a national point-to-point fibre network could cost as much as £28.8bn.

Caio said today that broadband speeds are increasing and the current peak time slowdown experienced by consumers was evidence of a bottleneck in the backhaul, not caused by the aged copper last mile. Virgin Media's imminent 50Mbit/s DOCSIS 3 upgrade and BT's recently announced £1.5bn fibre deployment were causes to believe market forces are delivering investment in broadband.

The analysis cautioned against Whitehall and Ofcom complacency, however. Caio wrote: "In the mid to long term, Broadband/NGA will become a critical digital utility, essential to the competitiveness of any country and to the quality of life of its citizens. The UK will be no exception and, if anything, it will be even more dependent on this infrastructure than other economies."

The report recommends that investment should be encouraged by an array of initiatives, including establishing standards so local groups can press ahaead with their own deployments. The UK's internet infrastructure should be benchmarked every year against competitor nations, Caio recommends, and authorities should coordinate streetworks to help reduce civil engineering costs.

It's estimated that digging up roads would account for up to 80 per cent of the expense of laying a fibre network. Sharing ducts with other utilites could significantly cut that. Cisco also provided Caio with figures showing that by relaxing the rules on new overhead cabling, the cost of fibre to the premises could be slashed from £1,200 to £400 per home.

Ofcom, he said, needs to take the lead in detailing the specifics of how and when such changes will be implemented.

The government said it will respond to the report "in due course". The full document is here (pdf). ®

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