Supplementary Memorandum submitted by
the Department for Culture, Media & Sport and the Department
for Trade and Industry
RESPONSIBILITIES FOR BROADBAND ROLL-OUT IN
THE ENGLISH REGIONS
1. It is important to stress that the roll-out
of broadband services is a challenge not only for Government but
also for the private sector. Government action however at national
and regional level has a key role to play.
GOVERNMENT STRATEGY
TO HELP
ROLL-OUT
IN RURAL
AREAS
2. The Government has set out a number of
measures to intensify competition, support demand and aid provision
of broadband content. These measures will benefit those areas
where broadband is available at mass-market rates (covering around
two-thirds of the population). But they may not make a strong
enough business case for broadband investment in the remaining
rural and remote areas. The primary barrier to broadband roll-out
in rural areas is the high cost of capital. The investments needed
are large and attract a high-risk premium. Roll-out to rural areas
is therefore likely to be very slow and patchy, even under benign
conditions.
3. Our strategy is to;
— encourage infrastructure-sharing
by telecommunications companies to reduce the cost of roll-out,
encouraging the telecommunications industry to come forward with
specific proposals (within the bounds of competition law);
— Cut red tape which may be holding
back deployment of satellite broadband services (potentially a
major contributor to rural broadband access); and
— Aggregate broadband procurement by
the public sector in order to provide guaranteed levels of demand
in rural areas. The public sector spends around £1.7 billion
on communications. Research undertaken for the Office of the e-Envoy
suggests that significant benefits could be achieved by moving
towards a nationally-co-ordinated set of regional procurements,
each guaranteeing a given number of public sector sites and given
levels of demand for broadband at each site. The Office of Government
Commerce is currently examining how we might use public sector
procurement more effectively.
THE ROLE
OF REGIONAL
DEVELOPMENT AGENCIES
4. Valuable work on the promotion and development
of the broadband market in the English regions is carried out
by the Regional Development Agencies (RDAs).
5. The UK Broadband Fund was established
to support the RDAs (along with the devolved administrations)
in taking forward innovative schemes to meet local requirements
for extending broadband networks. DTI provided high-level guidance
for the RDAs, who developed action plans in consultation with
Government and local partners.
6. From April 2002, under the new `Single
Pot' arrangements, RDAs will work to meet targets agreed with
Government, funded from a single budget which they are responsible
for managing. Many RDAs consider broadband an important aspect
of their development agendas and are likely to be carrying out
considerable work on supporting the market.
7. DTI Ministers and RDA Chairs have agreed
that the RDAs have several roles to play;
— They can develop better-focused information
for the region, such as the availability of broadband;
— They can co-ordinate the work of
other public sector bodies so that maximum benefit can be derived
from their purchasing of broadband services;
— They can catalyse action on behalf
of the industry through identifying with them the potential markets
in the region.
Much of their work will be focused on rural
areas where there is a lack of provision at present.
DEFRA/COUNTRYSIDE
AGENCY
8. The Department for the Environment, Food
and Rural Affairs (DEFRA) has an overall role in helping other
government departments and the RDAs take account of the needs
of rural areas in developing their policies. The Countryside Agency,
which acts as an independent adviser to DEFRA on rural issues,
is monitoring the roll-out of broadband in rural areas.
February 2002
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