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Where's the Government broadband money gone?

By Stewart Mitchell and Barry Collins

Posted on 20 May 2010 at 15:11

The Government's plans to fund next-generation broadband have been plunged into disarray.

The recently deposed Labour Government pledged to deliver 2Mbits/sec connections to every household in the UK by 2012, using the money left over from the digital television switchover fund.

Today, the new Government said it is considering plans to use that same money to help fund the rollout of high-speed broadband, according to the full coalition agreement laid out by the Conservatives and Liberal Democrats.

If necessary, we will consider using the part of the TV licence fee that is supporting the digital switchover to fund broadband in areas that the market alone will not reach

“We will introduce measures to ensure the rapid rollout of superfast broadband across the country,” the agreement states. “If necessary, we will consider using the part of the TV licence fee that is supporting the digital switchover to fund broadband in areas that the market alone will not reach.”

A spokesperson for the Department of Culture Media and Sport told PC Pro that the licence fee could be used in place of the scrapped 50p landline tax.

“The 50p landline tax was removed during the wash-up at the end of the last government so that won't be coming back,” the spokesperson said. “The BBC funding – specifically coming from the digital switchover budget – could be used instead, if necessary.”

The spokesperson couldn't confirm whether this meant the 2Mbits/sec pledge had been scrapped.

Even if the new Government plunges the BBC money into next-generation broadband, the funds available are nowhere near sufficient to pay for a fibre rollout to the final third of the country.

The BBC licence fee's Digital Switchover budget is 3.5% of the total funding and worth around £130m per year. Yet, experts say it would cost several billion pounds to lay fibre to the "final third" of the country that is unlikely to be served by private investment alone.

The coalition also provided no details on how it might meet the Conservatives' pre-election boasts of rolling out 100Mb/sec broadband to “most of the population” by 2017.

Separately, the coalition agreement says it will ensure that equipment and infrastructure owned by BT and other telecoms firms can be used to deliver the services.

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User comments

But..

Labour set aside over £200m of public funds for the USC, though they always promoted it in the same spin alongside their 50p tax as part of a single policy.

But I do agree, why are they being so coy about 2Mbps all of a sudden? Is it dead.. hmm.

By Mark535 on 21 May 2010

Labour lied?

Occums Razor.

There was no money. They couldn't do it. So they lied.

That's the simplest explanation, so therefore most likely to be true.

By cheysuli on 21 May 2010

That 50p tax worries me. In the sam way as fuel duty was introduced I could see that levy being increased hugely over time as broadband/telephone comms became more and more necessary.

Not content with taxing the road infrastructure, the government also no doubt decided to tax the digital infrastructure. Of all things a next generation network should be funded privately, with no state funding. In fact, I'd go so far as to advocate not taxing ISPs to allow them to invest entirely in improving the broadband setup.

However this means getting shot of OFCOM (who would only hold things up in BT's favour, it's members sitting, as they do, on the board) and shredding BT's fibre monopoly.

By bubbles16 on 21 May 2010

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