Prime Minister May hints at shaking up Blighty's 'dysfunctional' rural broadband

UK Prime Minister Theresa May has suggested her government could intervene in failing markets, such as rural broadband.

Speaking at the Tory conference in Birmingham today, she said: "Where markets are dysfunctional, we should be prepared to intervene."

She added: "Where companies are exploiting the failures of the market in which they operate, where consumer choice is inhibited by deliberately complex pricing structures, we must set the market right.

"It’s just not right, for example, that half of people living in rural areas, and so many small businesses, can’t get a decent broadband connection."

May went on to claim that the UK's growing economy was in part due to UK government initiatives such as broadband rollout.

Former chair of the Public Accounts Committee Margaret Hodge has said the previous government's £2bn of public subsidy for the rollout of broadband to rural areas, represented "extremely poor value for money".

Dana Tobak, managing director at Hyperoptic - an alternative network provider - said it was unclear how May's words would translate into action.

"I think it would be very helpful if central government was serious about broadband in general, whether rural or urban," she said.

She pointed to the "Building Gigabit Britain" report by the Independent Networks Co-operative Association (INCA) last month, which Hyperoptic helped to compile.

It contained a series of broadband infrastructure recommendations for the government, including a target of 80 per cent fibre-to-the-premise (FTTP).

She said: "Those recommendations are meaningful and actionable. So a response from government to them would be nice."

Malcolm Corbett, chief exec of INCA, said May was broadly correct in her comments and those issues are "well known".

He said: "The feedback I am getting from officials in Whitehall, is that they are taking the report seriously."

"But there is some concern about setting a target, and that will automatically get a response from BT of getting out the begging bowl. But we believe the target of [80 per cent FTTO] can be done without public subsidies."

INCA has also called on the government to create a broadband investment fund for alternative network providers - something it is expected to announce later this year.

However, Corbett criticised recent government proposals to hike up the cost of business rates, which telcos have said will result in a steep increase for broadband providers laying infrastructure.

"That seems to be going in the opposite direction of where they need to be heading," he said.

Tobak and Corbett were speaking to The Register ahead of the Broadband World Forum conference on 18th October in London.

Emma Hosgood, programme director at Broadband World Forum, said of May's comments:

“The Brexit outcome has left the future direction of the UK’s telecoms industry in question, meaning it is more important than ever to set a pro-market approach to telecoms regulation and innovation. This will enable us to retain our position as a global technology powerhouse."

She said poor connectivity is an issue that will need resolving if the UK is to remain a world leader in the digital economy. ®