Private sector should pay for next-generation networks, says report

The private sector should pay for new super-fast broadband networks because the case for public investment is “weak at best”, according to the report by Lehman Brothers Europe.

The report, commissioned by the Department for Business Enterprise and Regulatory Reform, says the UK’s internet infrastructure is important to the economy, but it does not require the investment of taxpayers’ money.

Francesco Caio, vice-chairman of Lehman Brothers Europe, says: “The case for a public intervention at this time is weak at best. But it is the right time to create the conditions that will deliver a competitive, next-generation access infrastructure in the next five years.”

The report argues that the billions of pounds needed to upgrade to fibre networks should come from private investors, not the Government.

Caio adds: “Although demand for bandwidth and internet traffic continues to exhibit strong growth, there is little evidence that, in the short term, the UK is going to suffer from the lack of an extensive next-generation access network.”

Virgin Media is already set to launch a new 50Mb broadband service later this year.

Neil Berkett, chief executive of Virgin Media, says: “With the massive increase in consumer demand for online content and information, broadband is fast becoming an essential digital service for consumers, businesses and the country as a whole.

“We share Caio’s view that it will provide the stimulus for the development of a dynamic and competitive industry that keeps the UK at the forefront of the digital revolution.”

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