Select Committee on Culture, Media and Sport Appendices to the Minutes of Evidence


Memorandum submitted by the e-Envoy, Cabinet Office


  During the evidence session on 12 March I agreed to write to your Committee with information on broadband availability in Scotland—and in particular, Alness.

  Using ICT to increase the productivity and competitiveness of businesses in rural and remote parts of the UK is one of may office's top priorities. And as we discussed, towns like Alness have already seen signficant investment from Government to create new jobs; a challenge now is to supply this work with a world-class telecommunications infrastructure.

  Approximately one million households in Scotland can currently access a Cable or DSL broadband solution; however, large areas are not yet able to. As John Thurso stated, fibre networks, owned by both BT and Thus Communications, run along the A9 road in the Highlands.

  However, in towns like Alness, the business case for investing in broadband and enabling the DSL exchange is not currently strong enough. The primary barrier to this rollout is the high cost of capital, the investments needed are large and attract a high-risk premium.

  But, as Patricia Hewitt and I both mentioned during the hearing, the DTI and my office have a number of initiatives in place to stimulate investment in broadband infrastructure and to extend broadband networks throughout the country.

  The DTI has provided £30 million to the Regional Development Authorities and Devolved Administrations to help develop innovative solutions for expanding networks into areas considered commercially unattractive. On top of this we are acting to improve the business case for service providers in rural areas through:

    —  investigating how the public sector can most effectively procure broadband;

    —  reducing the cost of rollout by encouraging infrastructure sharing options; and

    —  picking a broadband brokerage service, initially in one region.

  We are confident that these and other actions will develop the extent and competitiveness of the UK's broadband market.

  I hope this is helpful. Please feel free to contact me if you or your committee have any further questions on this subject.

20 March 2002

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