Government could U-turn on fibre optic rollout because of the recession

The decision to not provide heavy funding for the deployment of a fibre optic network to allow for support of the next generation of broadband throughout the UK could be reconsidered by the government according to hints by Lord Carter, the communications minister.

Carter acknowledged whilst speaking at a joint Westminster Media and Westminster eForum seminar recently that the ability of telecoms companies to raise the necessary funding to allow them to invest in the infrastructure for a high speed broadband network could be adversely affected by the current crisis in the economy.

He said “It is clear there are many other countries in the world taking a completely different view of the role of infrastructure as an essential part of an economy and the role of government in the provision of that infrastructure.”

The need to combine both mobile and fixed-line communications to provide universal broadband was also something Carter implied would be look into in his impending Digital Britain review.

He said “Today we are way beyond the view that broadband is a niche product, it is an enabling and transformational service and therefore we have to look at how we can universalise it.”

Last autumn saw the production of Francesco Caio’s report on the government strategy to use fibre optic cabling to deliver broadband access. The funding of the rollout with money from the public was something that the report advised against, and this was further endorsed after a consultation into the issue by Ofcom, which then went on to suggest that investment from the private sector was that best way to move things forward.

The combination of a drop in the share prices of telecoms firms in the UK and a 60 percent rise in the profits of the UK technology equipment and hardware sector could also be seen as a contributing factor.