Report claims £1.2bn broadband subsidy 'will be repaid 20 times over'
Report claims £1.2bn broadband subsidy 'will be repaid 20 times over'
A Government report claims that the economy will benefit 20-fold from the controversial £1.2 billion broadband improvement subsidy awarded to BT.
Report authors, economists SQW, claimed that for every £1 of the subsidy, £20 will be returned to the economy by 2024 as a result of better business productivity due to improved broadband speeds. It forecast that the improved infrastructure would result in around 20,000 new jobs.
Culture Secretary Maria Miller said: “What this report shows us is that as well as superfast broadband being good for economic growth it will make even more of a positive impact on the way we live, helping us work more productively and get online faster.”
Dr Pantelis Koutroumpis of Imperial College, who acted in an advisory capacity to SQW, said that the investment would especially benefit SMEs and prevent them being left behind by a “growing digital divide”.
However, MPs have sharply criticised the subsidy to BT as being uncompetitive, because no other company has been awarded a contract to supply fibre optic cabling as part of the push to roll-out superfast broadband to rural and isolated areas. Other broadband businesses claim that the Government money is simply helping BT to return to the same monopoly position it was in when broadband was first introduced to ordinary internet users in the UK.
The Public Accounts Committee said earlier this year that the way the subsidy had been managed meant there was no real competition to provide broadband services. It said that BT now has a “quasi monopolistic position” in the rural broadband roll out.
Meanwhile, the Daily Telegraph reported that MPs and companies criticising the management of the subsidy are unlikely to be satisfied by the SQW report, given that BT this week announced it would be paying £900m for exclusive rights to show European football on its broadband network from 2015.
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