Broadband remains a key barometer of the progress we have made in developing the UK's networks. Prices have fallen and speeds have risen as more local loops have been unbundled. Availability has improved. From around one in 10 a few years ago, the proportion of households incapable of getting basic broadband is now measured in small percentages. And take-up has surged from around 12 per cent in 2003 to more than 60 per cent of homes today.
But there are also reasons to suppose that we are now reaching the end of what the existing networks can do, and what the existing regulatory approach can deliver. Targeted public intervention has filled in some "notspots" in rural areas, but there are still pockets with inadequate and unreliable services.
We are beginning to see the emergence of services and applications that require faster speeds. There is already an expectation in some areas of life that people have ready access to good internet connections. Yet at the same time take-up rates have levelled out. So take-up remains a big challenge with much work to be done and to be discussed.
We need first to examine the reasons why so many people, nearly 40 per cent of households, do not even have basic internet access. Ofcom's analysis shows that even though people are bombarded by messages about the range of benefits of being online – whether buying cheap insurance or catching up on last week's soaps – there seem to be millions of people who are not yet persuaded of the benefits. We need to tackle this challenge as much as tackle the challenge of low-income households who can't afford access. It's also time to ensure that anyone who wants a decent basic broadband service can get one. The concept of extending the Universal Service Obligation (USO) was first raised more than two years ago. It is now very firmly on the agenda.
But the questions that have to be resolved are not easy. There will be some important trade-offs to make. But I think a broadband USO will make a significant contribution to filling in those gaps of availability and speed for a good basic level of service and this is a priority. There is almost no overstating how important it is to make sure we have the right circumstances for the next generation of broadband.
Ed Richards, chief executive of Ofcom, spoke at the LSE on Monday
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