'No need to panic' over lack of super-fast broadband in the UK

The man appointed to examine why the UK has been left behind many other countries in the roll-out of super-fast broadband believes there is no need for a panic-stricken attempt to catch up.

Francesco Caio, who is shaping government policy on next-generation internet infrastructure, said yesterday mounting concern about the lack of high-speed broadband connections in the UK might be misplaced.

The results of a review lead by Mr Caio, a former chief executive of Cable & Wireless, will not be published for another three months. The investigation was launched following concerns that the UK is being left behind as global rivals, from France to Korea, invest in fibre-optic networks with speeds up to 50 times faster than the current average in the UK.

BT has estimated the cost of replacing the copper wires to individual premises could run to £20bn, raising difficult questions about who might pay for what.

However, Mr Caio pointed out that there was no direct correlation between super-high speeds and take up: 40 per cent of connections in Japan, for example, are fibre, but the country still lags behind the UK in terms of usage as a percentage of the population. He added that the intuitive link between futuristic infrastructure and business competitiveness is not borne out by the numbers. In Korea, for example, some 34 per cent of connections are fibre, but the registration of high-tech patents is still way behind the UK.

In addition, Mr Caio said that fibre may not necessarily stimulate economic activity. Italy has 2.1 million homes passed by a fibre-optic cable, but the percentage of retail revenues generated online is just 1 per cent, compared with 7 per cent in the UK.

"So can we infer that the sheer number of fibre connections in the ground is, alone, an indicator of a country's competitiveness?" Mr Caio said. "Nobody doubts the centrality of a digital infrastructure for the future of both quality of life and the competitiveness of business. The issue is at what point in time that becomes absolutely critical, who should be paying and what the competitive forces we have to encourage are."

The issue of where investment is needed is also more complex than it appears, he said. The received wisdom is that it is the so-called "last mile" of the access network that is suffering, particularly with the huge success of bandwidth-hungry services such as YouTube and the BBC iPlayer. But backhaul – the links between the local exchanges and the Internet Service Providers (ISPs) – is just as much of an issue.

"The access network is important but it is not all," Mr Caio said. "We all know there are major concerns about the ability of the current copper network for delivering 50 Mbit/s and more, but today there is huge capacity of speed and bandwidth left in the copper because of bottlenecks in the backhaul."

One part of the problem may be solved by BT's £10bn 21st Century Network upgrade, due for completion in 2011. But there are also other potential investments needed from individual ISPs.