UK broadband plans will slow online business growth

A £1.1 billion funding gap means the UK government’s targets for broadband growth are unlikely to be met predicts a report by the London School of Economics.The government claims that it wants 100% access to fast broadband services and 90% access to super fast services by 2015.

The Investment in broadband is key for British economy but must overcome £1 billion funding gap report says the government should do more to ensure that the under investment does not harm the UK economy.

A rise in broadband penetration of 10% can lead to a 0.9%-1.5% boost in GDP per capita, the report adds.

The cost of meeting the targets are estimated to be £2.4 billion but funding for broadband from all public sources amounts to a total of £1.3 billion, according to the LSE report, which was sponsored by customer management software company Convergys. That leaves an estimated £1.1 billion gap that private investors will be expected to fill, it says.

“The government target of 100% coverage by basic broadband by 2015 is likely to be met, but it is less clear when the government targets of 90% coverage by superfast broadband, and 100% coverage by fast broadband, are likely to be met,” the report says.

The LSE defines “basic” broadband as services offering speeds of up to 2Mbps. “Fast” broadband ranges from 2Mbps to 24Mbps, and “super fast” exceeds 24Mbps.

Given that the UK digital economy is the fastest growing segment of the UK economy- with world leading ecommerce companies and services, the basic provision of super fast broadband access is the key technological driver.

If the government is serious in it’s desire to promote business growth and reduce unemployment then fast broadband speeds are a necessity not an aspiration.