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Why Rural Broadband Should be Privately Funded

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Today Jeremy Hunt announced how much money will be given by the government to rural areas in England and Scotland for broadband investment. Many will hail today's announcement as a success for rural communities and there is no doubt that Internet access has many, incredible benefits as a recent McKinsey report showed. However, rural broadband does not need to be paid for by the government and shouldn't be in today's digital economy.

Many companies like Fujitsu and Verizon are more than willing to invest in Internet infrastructure to rural communities in England and Scotland, the issue is that the business environment is not one in which companies are willing to take a risk. The current tax on laying new fibre or using unused fibre previously laid by BT or another broadband provider is still too high for companies to considering making an investment for rural communities that are miles away from the nearest town. Furthermore, the opening up of ducts and poles currently under the ownership monopoly of BT has not happened due to a breakdown in negotiations between other ISPs and BT. Though OFCOM is trying to facilitate the negotiation of a reasonable rental rate, it will be well into the next year before this happens. And that isn't all. The reuse of already available infrastructure for other utilities has proved difficult at best. It would be an easy solution to lay fibre along side electricity conduits, but this is only in the very early stages of discussion.

The Internet does not need to be delivered via fibre alone. The mobile spectrum auction provides a great opportunity for mobile carriers to take advantage of new spectrum allocations. But because of how the market it is now, the auction will be open to just the four major players and not a whole host of new entrants who would like to invest in and innovate around mobile broadband. And companies like Inmarsat are starting to look into the possibility of satellite broadband to the consumer market, but they are current in the early stages of this and waiting to see how the mobile spectrum auction plays out.

Broadband and mobile Internet is not a public utility and shouldn't be. The government should not be allowed to take taxpayers money - paid for mostly through their TV license fees - to invest in infrastructure that could be paid for entirely by the private sector. In this day and age the government should not be going into the business of broadband and should not be picking winners in broadband and mobile Internet. There is a whole industry out there that is willing to take the risk if the UK government frees up the market and the economy to allow them to do so.

Rural broadband access is brings economic growth, prosperity and better communications to the communities that need it most. Being able to start new businesses or engage in tele-medicine is absolutely critical to these communities, but the government should not be the ones to decide who and how gets rural broadband - the market should. And if private companies were given regulatory certainty, lower or no tax, and a competitive marketplace we would see the explosion of rural broadband all over the country.