Life in the broadband slow lane

High-speed internet access is now the norm in parts of Europe, so why is Britain's much-hyped 'broadband revolution' falling flat? Stephen Pritchard reports

BT's current commercials have all manner of spectacular creatures gushing from its "broadband" pipe: gladiators locked in combat, sports teams competing with gritted teeth, and a towering dinosaur on the lookout for lunch. The talk about broadband is positive: last week the Office of National Statistics said that the number of broadband connections in the UK had more than tripled in 2002, from 3.17 per cent of all internet subscriptions (home and business) to 10.79 per cent in December 2002.

Yet BT's own figures suggest that as few as 3 per cent of its "broadband enabled" phone lines actually carry a broadband signal to a home or business. This is despite calls (from the Prime Minister down) to establish a broadband Britain. But while we seem to talk a good broadband revolution, other European countries are living it – and at "true" broadband speeds.

For between one and four euros, Italians in six cities, including Milan and Rome, can watch any one of several hundred DVD-quality films without leaving their homes. They are customers of the largest commercial fibre-optical broadband service in Europe. With about 200,000 users, Italian service provider FastWeb has connected some 30 per cent of all homes. Each home has access to up to 100 megabits per second (Mbps) of bandwidth.

Yet in Britain, the fastest consumer internet services, from cable companies NTL and Telewest, run at 1Mbps. BT's broadband service, using ADSL (high-speed data sent down ordinary copper telephone wires), currently reaches half that, at 512 kilobits per second (kbps). In Italy, FastWeb subscribers enjoy 10Mbps of dedicated internet bandwidth, video telephony, video on demand, terrestrial and satellite TV programming, phone calls over the internet network and a neat, online video recorder that makes tapes or even hard disk recorders look cumbersome. This is all done through a single fibre-optical cable 2mm thick.

In the UK, however, the trend if anything is for slower, not faster access. BT is to launch an internet service running at 128kbps this summer. The service will be always-on, like ADSL, and will be able to reach far more homes than ADSL, which only works within 3km of an enabled exchange. But broadband it is not.

BT is open about this, and terms the new service "midband"; its rival NTL calls its own 128k service "broadband" on its web site. Useful as the service will doubtless be for homes not reached by ADSL, it is a far cry from the 2Mbps speeds that industry experts and the Government see as true broadband. According to Emanuele Angelidis, the chief operating officer of e.Biscom, the majority shareholder in Italy's FastWeb, a true broadband service must be able to deliver high-quality video, both as a technical and a marketing necessity.

"The customer is not interested in megabits but the type of service," he says. "If you can offer video it is a broadband service. If not, it is narrowband or midband, not broadband." Crucially, although most of FastWeb's customers take TV, telephone and the internet, the company also offers subscriptions with the phone and TV and no computer connections at all. Unless these users look very hard indeed, they might never know they are on the net.

FastWeb had a few factors in its favour when it built its fibre network. One was the absence of an established cable TV industry in Italy. "The UK started earlier with sophisticated cable TV, and in some ways that inhibits development of a new network," says e.Biscom chief executive Silvio Scaglia. "Italy was late in pay-TV and the solution was satellite. That is good for broadcast but bad for [internet] communications."

Italy, however, is not a special case. E.biscom runs a similar network in Hamburg. And further north, Scandinavian operators are also pushing forward with "true" broadband. The Stockholm suburb of Hammerby Sjostad is a development of new housing, shops, restaurants and offices some 20 minutes from the city centre. The area is becoming the place to live for the internet generation. As well as smart architecture and canal views, Hammerby provides blazingly fast internet access.

While Italy's FastWeb is a purely commercial operation, in Scandinavia they tackle things differently. In Hammerby, a coalition of building owners and the local authorities laid the ground – literally – for high-speed connections. Each flat comes with network connections supplied by ViaEuropa, an internet "utility". ViaEuropa runs the physical connections, which are owned by the municipality, and rents out the space to ISPs such as Telia and Tiscali.

Using technology from another Swedish company, PacketFront, users can sign up for the internet, digital TV, or on-line telephony by plugging in a PC or TV set to a socket on their apartment wall. If the ownership of the network is complicated, in use it is simplicity itself. According to Martin Thunman, PacketFront's chief executive, e-mail usage increases four-fold when the net is fast and always on. "ViaEuropa enables a 100mbps connection to each apartment, but our system allows ISPs to offer any speed from 64kpbs upwards," he says. "You can have 64kpbs internet or 10mbps internet; 26mbps is for the TV." Few users sign up for anything less than the full 10mbps connection.

In the UK, according to the internet hardware company Cisco, there is potential for commercial services at real broadband speeds. But the early beneficiaries will be businesses, not homes, and the services will come at a premium. According to BT Wholesale, which provides the network for ADSL, despite BT possessing faster technology known as VDSL (which reaches 2Mbps) a combination of a lack of demand and high cost means the UK will be in the broadband slow lane for some time yet.