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September 2, 2015

BSG CEO: Direct gov’t funding should be ‘last resort’ for broadband

C-level briefing: Matthew Evans, CEO of the Broadband Stakeholder Group, argues that intervening on the demand side is a better route to innovation.

By Alexander Sword

The view that the UK’s broadband services need to be developed is held fairly unanimously. After all, it’s mutually beneficial for businesses, consumers and service providers.

In fact, the Government’s 2013 UK Broadband Impact Study suggested it could provide £20 in economic impact for every £1 of public investment between then and 2024 due to broadband’s "increasingly critical role in the day-to-day operations" of most UK businesses.

How this investment should be administered, and whether it should even come from government, is more arguable. As CEO of the Broadband Stakeholder Group (BSG), Matt Evans sees the role of government as facilitating and stimulating investment rather than necessarily administering it.

"Government has a determined focus to roll out more infrastructure, obviously not just in telecoms but right across the piece.

"It’s right that government can set the target and frame where we want to be in five or ten years’ time; so there needs to be interaction with not just industry but with consumer and user groups as well, like the Federation of Small Businesses.

However, according to Evans, stakeholders primarily want to be helped to invest themselves.

"Industry really wants to see government doing everything it can to lower the barriers to investing in their own commercial networks and to get a commercial deployment underway.

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"That really needs cooperation right across government, which is something that we don’t always see from local government right through to the Cabinet."

Where there is government intervention, according to Evans, this should focus on the demand side. He praises the Superconnected Cities Plan, which provides vouchers towards the connection costs incurred by businesses that provide ultrafast broadband to SMEs.

"Where the SME vouchers work very well is that you’re not just having industry being given money and being asked to target. They’re having to be innovative and really responsive to what small and medium-sized businesses are looking for, because they’re having to bid in a competitive environment for those vouchers from the company.

"We’re incentivising industry to do a lot of that work because they know that is the only way they’re going to be able to access those vouchers.

"Where it does intervene it needs to be as the last resort if there is direct funding. You have to do everything you can to make sure the commercial funding goes as far as possible, with direct funding as the last resort."

Examples of the Government directly deploying subsidies include the Superfast Broadband scheme, where the Broadband Delivery UK team has worked with BT and Virgin Media to build out the UK’s infrastructure.

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