UK Broadband ‘Not Fit For Purpose’

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Federation of Small Businesses slams the current state of broadband – claiming 45,000 are still on dial up

A new report from the Federation of Small Businesses (FSB) laments the current state of broadband in the United Kingdom, and warns thousands of businesses aqre still stuck on dial-up internet.

BT however disputes the FSB’s “widely inaccurate” figures.

Not Up To Speed

The FSB made its broadband claims in a new report entitled “The 4th Utility: Delivering universal broadband connectivity for small businesses across the UK”.

The FSB estimates that a staggering 45,000 firms, or 1 percent of the UK’s 4.5 million businesses, are still limited to a dial up internet connection. It argues that access to high-quality broadband provision is a commercial necessity and is in fact nowadays regarded as the ‘fourth utility’.

It said that 94 percent of small business owners consider a reliable internet connection critical to the success of their business, while 60 percent expect to increase their online presence in the next year. It also said that as many as 14 percent of small businesses consider lack of reliable and fast broadband connectivity to be their main barrier to growth.

rutlandcabinetAnd it pointed to a worrying lack of fibre access in the UK, despite the ongoing fibre deployment by BT through its commercial roll out and the BDUK process. The FSB said that two thirds (65 percent) of small businesses access their broadband through a wired connection. However, it said that only 12 percent have a fibre-optic connection, while 35 percent have a mobile connection.

It pointed out that 15 percent of small firms say they are very satisfied with their broadband provision, while a quarter say they are fairly or very dissatisfied. Meanwhile, in a separate survey, it found that 40 percent of small businesses said improved digital infrastructure in their area would encourage them to invest in new technology.

Poor Ambitions?

The central thrust of the FSB complaint is that existing fibre deployment has mostly focused on residential premises, and not enough on businesses and business parks. Businesses should be at the heart of the fibre deployment, it argues.

And the FSB also slammed the government for its less-than-ambitious superfast broadband targets. The current Government targets of 24Mbps for 95 percent of the population and 2Mbps for the remaining five percent will not meet the future demands of UK businesses, argues the FSB.

It wants the government to pledge, in co-operate with industry (aka BT), to commit to delivering minimum speeds of 10Mbps for all business premises in the UK by 2018–19, regardless of location – more ambitious than the current target of delivering 2Mpbs for the hardest to reach five percent by 2017.

“Alongside this, the Government should set a medium to long-term objective of providing minimum speeds of 100Mbps to all premises by 2030,” said the FSB. It pointed to Denmark, which is committed to offering universal access of 100 Mbps to its citizens by 2020, while South Korea has a target of 1000 Mbps (1Gbps) for 90 percent of its population by 2017.

The FSB has called for structural reform of the broadband market, and it is demanding the Competition and Markets Authority (CMA) to conduct, at the request of Ofcom, an assessment into the current market structure.

“The fact that we have around 45,000 businesses still on dial up is unacceptable and many more throughout the country, even in London, are receiving poor service,” said John Allan, National Chairman, Federation of Small Businesses.

“Evidence from our members shows this clearly is a problem affecting all corners of the UK, rural areas and cities alike. While progress has been made with the residential market, businesses have not enjoyed the same benefits, which is holding back their growth,” said Allan. “We therefore want to see the UK Government show ambition with its broadband targets and put business needs at their centre. Leaving five percent of the population with a 2Mbps connection in 2017 is not good enough.”

“As this report shows, too many of our small firms are held back by the current state of the broadband market in the UK,” he said. “We want Government to oversee the creation of world-beating digital infrastructure that will enable businesses to grow, innovate and compete in international markets. This means not only raising download speeds but also upload speeds that are so important and where provision is especially inadequate.”

BT Statement

But BT has rejected some of the figures and arguments of the FSB.

“We agree with the FSB that high speed broadband is important for small businesses, though we think their claim about businesses being on dial up is wildly inaccurate,” a BT spokesperson told TechweekEurope via email.

“73 percent of UK premises can access fibre – including some businesses who say they can’t in this report – and that should rise to 90 percent in under two years,” said BT. “Having said that, we know that many businesses are waiting for fibre and it may be they’re prominent among the four percent of FSB members that replied to this survey. The good news is that fibre should reach the vast majority of that four percent in the coming months or next couple of years under existing plans.”

“Independent research shows UK fibre availability to be the best among the big five economies in Europe and it is set to improve significantly in the next few years,” said BT. “That’s cold comfort to those who don’t have access today but our engineers are deploying it as quickly as they can and we would encourage businesses to register their interest so we know where the highest demand is.”

BT also said that fibre is not the only solution for businesses, with medium-sized firms opting for greater bandwidth provided by Ethernet.

In May, EU Broadband figures revealed that the UK is performing above the European average in terms of broadband coverage, adoption and use. However, the European Commission (EC) warned that despite being on track to meet the majority of its digital targets by 2015, more must be done to connect rural areas, SMBs and eGovernment services across the continent.

In March, research from NFU Mutual revealed that one in five rural families reliant on the Internet for their children’s’ education say it is being negatively impacted by slow broadband speeds that leave them unable to access essential resources for schoolwork.

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