Monday 18 October 2010

Paying for Broadband

Dylan Jones Evans returned to the subject of the Welsh Government’s roll-out of high speed broadband in Saturday’s Western Mail (I can’t find the article on the WM site, and, unusually for Dylan, it hasn’t appeared on his blog yet). His core theme – and I hope that I’m not misunderstanding him on this – isn’t so much about whether high speed broadband should be delivered or not, but about the cost of delivering it – and the other things which will not get funded as a result.

I have no doubt that the proposal to ensure that all parts of Wales have access to high-speed broadband will be a popular one with the population at large. And it has surprised me to discover the extent to which businesses which one wouldn’t think would be particularly dependent on high speed connectivity do actually feel that they are constrained by the lack of that connectivity. So the core proposal put forward by the government is certainly one which I’d support.

That doesn’t deal with Dylan’s points though, and they cannot and should not be dismissed as easily as that. The cost being talked about is enormous, and I share Dylan’s concern as to whether cheaper options are being properly examined, or whether the government isn’t being too easily led by the largest supplier into paying over the odds for the service.

(There’s an interesting parallel in today’s paper, with the story about Arriva Trains Wales increasing services in England, but telling the Assembly Government that it can only increase services in Wales if the Welsh Government provides a subsidy. I start to wonder whether some of the large companies aren’t seeing the Welsh Government as something of a ‘soft touch’ at times, which can enable them to extract money for things in which they should be investing themselves.)

The relationship looks far too cosy for me. I’m aware of other companies operating in South West Wales which claim that they can provide an alternative service at a fraction of the cost being quoted by BT, and I share Dylan’s concern about whether the alternatives are getting the consideration they deserve. I’ve argued before that I have a preference for increasing the universal service obligation rather than using taxpayers’ money to provide subsidies, although I accept that is currently outwith the powers of the Welsh Government.

The second point is about whether it is right to divert money from business support to pay for this piece of infrastructure. I’m less convinced about Dylan’s points on this aspect. In principle, a move away from providing direct grant aid to businesses to a greater emphasis on building infrastructure seems to me to be the right way to go. (Although I think Dylan has been very helpful in highlighting the fact that this change seems only to apply to indigenous companies, whilst inward investors can still qualify for grant. That strikes me as being curious, to say the least.)

One thing which does deserve a bit more consideration, though, is who is benefitting. Although being presented as infrastructure which will benefit jobs, it will also have a huge and very welcome benefit for domestic customers in rural Wales. There is surely some scope for arguing that the whole cost should not therefore be met from the economic development budget.

Update: Thanks to Anon, who is clearly mroe adept than I at finding things on Wales Online, here is the link to Dylan's piece.


Anonymous said...

This might interest you

Anonymous said...

here is the link to DJE's article