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BT Says British Broadband Will Cost Billions

BT Says British Broadband Will Cost Billions

It will cost billions to fulfill the coalition government's vision of getting fast broadband to every part of Britain, BT has said.

Steve Robertson, chief executive of BT Openreach, told BBC Radio 5 Live that the goal cannot be achieved without public funds of around £2bn.

The costs of delivering basic broadband to rural areas may also rise, experts say.

The government says industry must find ways to solve the problems.

It has pledged to make the UK the fastest broadband nation in Europe by 2015 and provide a minimum 2Mbps to every home.

But, other than £175m set aside from the Digital Switchover project, there is little new money available to fund these rollouts.

Culture minister Jeremy Hunt told BBC News that the costs "had been scoped out" and he was confident "we should be able to deliver on our commitment."

"Obviously we are looking for solutions that allow extensions to superfast [broadband]. It would be a short-term fix if two megabits was the limit," he told BBC News.

He said the levy on the BBC licence fee used to fund digital switchover could be extended if necessary.

Mr Hunt is hosting a conference intended to mobilise companies on Thursday.

"Tomorrow I will bring together the key industry players who can help deliver this. I now need them to work together on solutions and tell us what we can do to help make this ambition a reality," he said.

Companies will have the chance to identify the current barriers to providing basic level broadband in rural areas as well as suggesting ways to make more use of publicly-owned networks, such as those connecting schools and hospitals.

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See the UK's notspots

BT said that public money to the tune of up to £2bn will be needed to put Britain at the top of the super-fast broadband league.

The money could come from local authorities, central government or the European Union.

The telco is spending £2.5bn installing fast broadband services to around two-thirds of UK homes.

But a significant number could be left in the slow lane.

"As a society we need to make our minds up about what is an essential element of our social fabric. Today not having broadband makes people feel deprived," said Steve Robertson.

The government is conducting a paper trial to work out how much it would cost to provide areas with slow broadband with faster services and will run pilots in three areas when the cheapest options emerge.

Research firm Point Topic estimates that around 2m homes are currently unable to get speeds of 2Mbps.

Some are in remote areas but others, such as Surrey village Ewhurst, are close to large towns.

Data needed

Point Topic analyst Tim Johnson fears the government may have more work on its hands than it realises.

"These two million premises are not in clearly defined areas. The only way to reach the have-nots is to engineer a service upgrade for the whole area," he said.

This could take the cost of providing universal broadband closer to £5m, he thinks.

"There is a danger that a shortage of money and the search for clear wins will drive the two-meg minimum programme to concentrate on areas which are very remote," he said.

A few smaller firms, such as Rutland Telecom, are taking matters into their own hands and raising money from householders to improve broadband services in small communities.

But the process is made harder by BT's withholding of vital data.

In order to make decisions about how much it will cost to provide fibre to a community, firms need to know which homes are connected to which green street cabinet.

Rutland Telecom says BT has refused to hand over this crucial data.

BT denied this.

"We have a manual process for advising Rutland Telecom of the location of the street cabinets and Ofcom has confirmed that by providing this we are fully complying with our regulatory obligations," said a BT spokeswoman.

If more firms need such data in the future it may consider offering an automated system, the spokeswoman said.

Sorting out relatively minor regulatory issues such as this could make a big difference, thinks Tim Johnson.

"Obliging BT and similar companies to open their infrastructure data to the market is the single most effective measure the government could take to create the super-fast broadband network it wants," he said.

Mr Hunt said persuading companies such as Rutland to invest in broadband was "absolutely part of the process".

"We need a level playing field and have to make it easy for people to lay fibre in BT's or other's ducts," he said.

He said new legislation may be required to open up the ducts of electricity and water companies.


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