Digital Britain: BT, Virgin 'cannot afford' high-speed broadband

Every home in the UK is to have broadband by 2012 under the government’s Digital Britain report being published this afternoon.

Next generation changes in fixed and mobile networks are essential for an expanding economy, according to communications minister Lord Stephen Carter, who will launch the report today.

The Digital Britain report is expected to give every UK home a speed of at least two megabits per second (2Mbps) broadband access. Major telecommunications providers BT, plus mobile and satellite companies, are expected to roll out broadband to the 15 percent of the country that does not have access.

But BT and Virgin Media have indicated they are unlikely to be able to afford to provide broadband infrastructure to homes in the countryside, and are not expecting to receive much government help, according to reports.

A draft version of the report published in January contained little information on support, and press reports today state little has changed.

There will only be a “modest” package of support, including financial incentives and tax breaks, The Times noted.

Lord Carter, who will be departing from his post in the summer, has hinted that the broadband proposal could be part financed by leftover BBC licence fee funds from the digital switchover, a scheme which earmarks £100m a year to help the elderly and vulnerable to change from analogue to digital television.

BT told the newspaper it could not afford to connect remote rural homes to the service without financial support. “We believe that the future is fibre, but it is only economically sensible for us to connect up the big cities and new-build houses; we’re not expecting Digital Britain to help us to run fibre into rural areas.”

A source at Virgin Media added that the company expected the report “to offer us not much more than some tax breaks”.

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