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Fibre-optic broadband

The government’s blueprint for the UK’s digital future has been welcomed and rubbished in equal measures, as broadband suppliers and industry bodies react to new regulations and spending plans intended to facilitate the construction of a next-generation network.

Revealed yesterday, the study proposed a series of wide-ranging reforms for next-generation broadband funding. Key among these was the introduction of a tax on every UK landline connection of 50p per month.

The revenue accrued by the measure will be collected by the Next Generation Fund, which will use it to subsidise a fibre-optic broadband network in areas of the UK where it is not viable for UK broadband providers to operate a service.

Finance for the scheme will also come from the surplus money that was earmarked for the switchover from analogue TV. Meanwhile, existing cable broadband provider Virgin Media is to be granted tax breaks, as will BT.

Prior the release of the document, the Country Land and Business Association (CLA) has been one the leading voices in calling for rural access to next generation networks to be improved. Responding to the new provisions, CLA declared itself fairly satisfied but claimed that further, more wide-ranging measures are required to assist rural businesses.

Henry Aubrey-Fletcher, president of the organisation, said: "The CLA has said time and time again that government investment is an essential prerequisite to rolling out broadband to all.

“This is a fair first attempt at trying to resolve the digital divide but more needs to be done if those in remoter parts of the country are to have a future in Digital Britain.”

His sentiments were echoed by Paul Lawton, managing director of TalkTalk subsidiary Opal, who warned that it is not just rural businesses that stand to lose out unless next-generation networks are prioritised.

He told ISPreview: "The UK is already at risk of being left behind and committing to a minimum of 2Mbps by 2012 – while good news for domestic users - is not going to help UK businesses to effectively compete in the future or enable business owners to accommodate requests for flexible working.

“A minimum recommendation of 2Mb is a step in the right direction and the benefits will certainly be felt by consumers. However, Digital Britain’s focus on downstream speeds of only 2Mb will limit broadband’s wider use, because for businesses it is the upstream which is the limiting factor."

Conversely, the report has been given a warm welcome by satellite broadband specialist Avanti. A positive reaction was also noted from junior broadband provider Rutland Telecom. Speaking to the Guardian, David Lewis managing director at the firm told the Guardian that the tax will be crucial as in generating “much-needed funds to deliver 'final third' next generation broadband by 2017."

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