Private sector told it should pay for move to high-speed web access

The UK's telecoms and internet companies should foot the bill for taking Britain's broadband infrastructure to the next level, according to a government-commissioned report published yesterday.

Francisco Caio, a former chief executive of Cable & Wireless, who was commissioned to write the report last February, said the private sector should pay for maintaining Britain's position as a leading online economy, helping to deliver "Next Generation Access" (NGA) to broadband over the next five years.

However, Mr Caio, who is now vice-chairman of the troubled investment bank Lehman Brothers, said there was no hurry to take the UK towards super-fast broadband, and so the need for government intervention or investment at this stage was weak.

"The UK and its consumers and businesses benefit from a competitive broadband industry and a rich choice of digital communications and entertainment platforms," said Mr Caio. "Although demand for bandwidth and internet traffic continues to exhibit strong growth, there is little evidence that in the short term the UK is going to suffer from the lack of an extensive next-generation access network. I have therefore concluded that the case for a public intervention at this time is weak at best. But it is the right time to create the conditions that will deliver a competitive NGA infrastructure in the next five years."

The report made four key recommendations, including a call for the Government to open up access to two parts of the radio spectrum for wireless internet access. Mr Caio also called for the Government to work with the construction industry to ensure that all new homes are installed with next-generation broadband, and should relax planning laws to allow broadband to be delivered via overhead cables carried on poles through the streets. Mr Caio also urged the telecoms regulator Ofcom to force broadband providers to be more transparent about their internet speeds.

The Government has been criticised for not doing more to ensure that Britain keeps up with other countries on the roll-out of fibre-optic broadband networks.

However, the Business Secretary, John Hutton, said the Government was committed to maintaining Britain's place as one of the world's leading internet economies.

"This technology will touch almost every part of the economy; it is a vital tool for the future, supporting innovation and economic success," he said. "We will consider [Mr Caio's] recommendations as we plan ... It is reassuring to have evidence of timely investment being made by a broad range of players."

Mr Caio's report was not universally well received, with some groups claiming that continued investment in broadband infrastructure was needed now. The Country Land & Business Association, which campaigns for improved infrastructure in rural Britain, said Britain was losing its "competitive edge by the day".

The CLA's head of rural business development, Charles Trotman, said: "We are not talking about playing games and watching videos – the very future of British industry depends on this. If we are not careful, our hopes for the broadband of the future will be smothered under a flood of conflicting reports while the rest of the world gets on and does it."