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UK will not reach superfast broadband targets with current funds

Private sector can help fill £1.1 billion funding gap, say LSE researchers

The government is unlikely to meet its target of rolling out superfast broadband to 90 percent of the UK by 2015 with its existing funds, according to a report from the London School of Economics (LSE).

To meet this target, public funds so far earmarked for the initiative would need to nearly double, the LSE said, which is where the private sector could come in.

Public broadband funding, not just from the government, stands at a total of £1.3 billion.

LSE estimated that another £1.1 billion of funding is needed to achieve the government's broadband objectives, and said that the £50 million allocated by Chancellor George Osborne in the 2012 budget fell "well short" of filling the funding gap.

Furthermore, LSE said that it was unclear whether the £50 million fund for a "wave of 10 smaller super-connected cities" would be for 'superfast' or 'ultrafast' broadband.

"The government's universal service commitment for basic broadband to reach the whole country by 2015 is on course.

"However, meeting the government targets of 100 percent fast broadband coverage and 90 percent superfast broadband coverage in 2015 will absorb not only the funding from public sources but also roughly equal funding from private sources," LSE said in its 'Costs and Benefits of Superfast Broadband in the UK' report, which was sponsored by customer management and information solutions provider Convergys.

LSE expects the government to reach its target of 100 percent basic broadband coverage in the UK by 2015, but described its aspiration to deploy 'the best superfast broadband network' in Europe as "optimistic".

"It is less clear when the government targets of 90 percent coverage by superfast broadband, and 100 percent coverage by fast broadband, are likely to be met," the researchers said.

They believed that there may be enough users of superfast broadband by 2017 for the government to justify public funding to reach the remaining 10 percent, but predicted that full take-up of superfast broadband would not be likely until around 2025, due to the large proportion of older people who are not online.

According to UK Digital Champion Martha Lane Fox, 8.2 million adults in the UK are still offline.

Last month, the government came under heavy criticsm from stakeholders over its efforts to roll out superfast broadband in the UK.

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