Superband is an election issue

Published March 15th, 2010 - 10:35 GMT

Tory “wait and see” policy could be vulnerable
Tory candidates could be vulnerable on their policy for superfast broadband in the coming election. The party’s decision to take a “wait-and-see” approach on whether to provide subsidies for ‘superband’ could provide ammunition for their opponents in many marginal constituencies.

Point Topic, the broadband analyst company, has shown that Conservative-held seats will, on average, be the most in need of public money if they are to get good access to superband. For example, looking at the 253 seats with the highest needs for subsidy, the Conservatives can expect to hold 138 of them even if they poll no better than in 2005. On the same basis the Liberal Democrats and the regional parties could expect to hold 52 of these seats but Labour would get only 63, even though it was by far the biggest party in the 2005 election.

 


In the coming election the Tories are expected to do much better than they did in 2005 and they must win many more of the seats which need most help with superband if they are to win control of parliament overall. But they will face vigorous accusations that their policies ignore the needs of more rural constituencies. The party published a detailed press release about their plans for nationwide superfast broadband on 1 February and confirmed them in their Conservative Technology Manifesto, launched on 10 March.

How have the Tories got themselves into this position? “All the main parties agree that Britain needs superfast broadband,” explains Tim Johnson, Chief Analyst at Point Topic, who has led the research. “Mostly they agree that the market economy should be able provide ‘superband’ to about 70% of the homes and businesses in the UK without government intervention. Where they differ is about how to deliver it to the rest of the country.”

Labour has already started on a programme to ensure that superband, or “NGA” (for next-generation access broadband), is available to at least 90% of the country by 2017. A key feature of the plan is the proposed levy of 50p per month on fixed telephone lines, a measure which is due to be included in the Budget proposals on 24 March. The “telephone tax” is intended to finance a Next Generation Fund worth upwards of £150m a year. A newly-created organisation, Broadband Delivery UK, will have the task of using the Fund to help finance superband projects in areas which would not otherwise be served.

The Tories take a much more sceptical view of the need for such subsidies and their effectiveness. Their approach is to “unleash private sector investment”, for example by opening up BT’s infrastructure to competitors and easing planning rules. Only if that fails will they consider diverting a proportion of the BBC license fee, currently used for the switchover to digital television, to finance superfast broadband rollout, starting from 2012. One reason for the delay is that the money will not be available until then.

“The advantage of the Tory approach is that they avoid having to increase taxes because in effect they will be taking the money away from the BBC instead,” Johnson points out. “The disadvantage is that investment in this vital area is held back for at least two years. Personally I think that would be a bad thing. With Britain struggling to emerge from recession I believe the benefits from extending and speeding the spread of superband could make it one of the Government’s best choices for investment.”


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