I grew up in a city and whilst I’ve worked in three continents I always lived in cities. The odd ramble in the beautiful countryside of Northumberland or County Durham aside, I have always considered myself essentially urban. How strange therefore that I should find myself the champion of rural Britain against the Conservatives and the Lib Dems, who, historically as the Tories and the Whigs divided rural England between them and now seem determined to unite rural Britain against them.
The scale of this Government’s betrayal of rural England is not yet fully appreciated but it is likely to haunt the rural economy for years to come.
In this case the thirty pieces of silver are the go faster stripes of 30 Mbits superfast broadband, for which Jeremy Hunt stole the money the previous Labour Government had set aside to bring decent (2 Mbits or better) broadband to everyone. So now half way through 2013 we know that every rural business unable to email their customers, every student unable to complete their homework online and every farmer unable to upload their (mandatory) DEFRA documentation has this Government to blame.
And the promised superfast broadband? Well as the National Audit Office (NAO) reported this month, it is already two years behind, quite impressive just three years in...
I raised this at DEFRA questions this month and was surprised at the complacency of the response from the Minister, Richard Benyon. Overall the NAO placed what is still called the rural broadband programme in special measures , predicting that many in the countryside would be condemned to the digital slow lane for another five years.
Countryside Alliance executive chairman Barney White-Spunner himself commented: "We now know that only nine of 44 broadband projects are projected to reach their 90 per cent superfast coverage target by May 2015."
"The BDUK project has only served to exacerbate BT's dominance in the market and too much pressure is being placed on the public purse to finance a superfast broadband network, with just 23 per cent being the average proportion of private sector funding in contracts signed to date, compared with 36 per cent modelled in the Department's 2011 business case. The UK needs an internet infrastructure that can meet the demands of a modern digital society and it is now time for DCMS to ensure that rural communities are included as part of the national infrastructure."
The Countryside Alliance basically owns about half the country. They are the natural allies of the Conservative party. Why and how have they been so alienated?
They know this is very serious for the country as a whole, but also incredibly serious for the rural economy. Research from the World Bank estimates that for every ten percentage points increase in broadband penetration, economies experience between 1.21 and 1.38 percentage point increase in per capita GDP growth.
We are now, rightly, celebrating a long awaited and much hyped 0.6% increase in GDP bringing us back to where we were in 2008. How much more growth would we be experiencing had the Government taken the right decisions on the economy nationally? And how much healthier would the rural economy be if Government had rolled out decent broadband for all?
The next Government is likely to inherit an inflexible broadband program failing in many areas. There is widespread concern that BT is already exploiting its effective monopoly position on pricing, and they have faced much criticism for taking so much public sector money to deliver what are supposedly commercial services.
Ofcom needs to take a serious look at the services BT offer and particularly provide some evidence for its apparent belief that Openreach’s wholesale Ethernet product, VULA , really does support the same level of competition as local loop unbundling which, under Labour, delivered the most competitive broadband market in Europe.
But BT is not to blame for this mess - that honour rests fairly and squarely with this Government. No intelligent customer puts itself in the position of having only one supplier, especially, and almost criminally stupid, when that customer is actually defining the market.
In the medium term, we must put pressure on the Government to make available spectrum to enable wireless and satellite services to offer greater competition in rural areas. In the longer term I fear those who lose out the most will be those in the middle - outside the hyper urban areas where Virgin and BT compete and the very rural areas where the Government may be pressured to subsidise effective competition. That’s about 40 percent of the country left without any choice because of the mistakes of this Government.
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