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Public sector networks could plug 'final third'

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The government is discussing opening up public sector internet infrastructure to bring down the cost of introducing faster broadband nationwide.

The talks could create initiatives such as connecting fibre links owned by NHS hospitals and schools to local homes and businesses.

Broadband minister Ed Vaizey said exploring such ideas would be his highest priority as he launched a consultation on infrastructure sharing. The talks are aimed at bringing down the cost of deploying fibre and follow the coalition's decision to scrap the previous government's £6 per year tax on landlines.

The tax would have created a £175m annual subsidy pot to pay for fibre in the more sparsely-populated "final third" of the country, where BT has judged the commercial case is too weak. The national telco has committed £2.5bn to upgrade two thirds of its network.

Instead, the coalition will encourage the market to deliver as much as possible, as cheaply as possible before considering subsidies.

Vaizey's pledge came after an internet industry audience at the Department for Business lobbied him to include publicly-owned fibre in the consultation, which will also encourage water and electricity firms to share ducts and overhead infrastructure. Ofcom plans to force BT to do the same.

One of Vaizey's bosses, Culture Secretary Jeremy Hunt, said he was optimistic about how much could be achieved without taxpayer funding. In South Korea - rated to have the best broadband infrastructure in the world - 95 per cent of deployments were privately funded, he said.

"We are dead serious about this," Hunt said.

He declined to give a national speed target, instead repeating his aim that by 2015 the UK will have the best broadband network in Europe. "The reason we're not nailed to a particular speed is because this is a moving feast," he said.

The ministers were also lobbied on the impact of the so-called "fibre tax". Because of the way the Valuation Office Agency calculates the rateable value of communications infrastructure, the tax disproportionately hits the smaller providers, which the government will rely on to deploy fibre to the "final third".

Vaizey and Hunt said the government will investigate the regime to see if it can be improved, but warned any changes must be "revenue neutral" to the Treasury. ®

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