HL Deb 11 July 2001 vol 626 cc81-2WA
The Earl of Northesk

asked Her Majesty's Government:

What proposals they have to address the current difficulties relating to broadband penetration and pricing, identified recently by the e-Envoy, Mr Andrew Pinder, as representing a potential threat to the target of the United Kingdom having the most extensive broadband market and coverage in the Organisation for Economic Co-operation and Development. [HL120]

Lord Macdonald of Tradeston

UK online: the broadband future set a new target—for the UK to have the most extensive and competitive market for broadband in the G7 by 2005—and outlined a series of actions to help achieve this.

In every country the broadband market is at a very early stage, it is therefore more relevant to measure availability of broadband services as a foundation for market evolution. In the UK, 50 per cent of households are now served by a broadband-enabled exchange, according to the OECD. This places the UK on a par with Italy and Australia and ahead of Japan, France and Holland.

Cable companies in the UK and abroad are rolling out broadband cable modem services and licences for broadband fixed wireless access have been issued for areas covering 60 per cent of the population. Together, this represents a firm foundation for continued rapid growth in adoption of broadband services in the UK. Independent research from Datamonitor & IDC, featured in UK online: the broadband future, anticipates that the UK will have a higher percentage of households connected to broadband than the majority of its G7 and EU competitors by 2004.

Progress has also been made on reducing the cost of broadband services. The last Oftel report showed that business broadband services in the UK are cheaper than France and in some cases Germany. The cable companies, ntl and Telewest, whose networks pass 50 per cent of UK households, offer broadband services at prices which are among the lowest in the OECD.

Prices over xDSL broadband technologies are relatively expensive: however, the Government are increasing competitive pressure through the local loop unbundling process to help drive prices down. The e-Envoy has also suggested that BT and other operators consider offering lower specification, lower cost, entry products of the sort which have encouraged uptake in some other markets.