UK Business Broadband is not good enough

UK business broadband is simply not good enough and a major government rethink is needed, according to a business lobby group.

The Federation of Small Businesses (FSB) says that the UK business broadband target is simply not ambitious enough when compared to other nations.

It is calling on the government to commit to delivering a minimum of 10Mbps (megabits per second) for all UK businesse broadband connections by 2018/19.

It would like to see this rise to 100Mbps by 2030.

“If small businesses are to thrive and prosper and contribute to a growing economy, they need universal access to what is now considered the fourth utility,” concludes an FSB report on the current state of UK business broadband.

However, the government and BT have said that the FSB’s findings do not match reality.

Slow speeds

The report indicated that:

• 94% of small business owners consider a reliable internet connection to be critical to the success of their business

• 45,000 UK small businesses are still on dial-up speeds

• Only 15% of firms say they are very satisfied with their UK business broadband provision.

Other recommendations include:

  • prioritising the delivery of fibre-optic broadband to new and existing business parks
  • a new ambitious national broadband strategy
  • reform of the broadband market

“The fact that we have around 45,000 UK business broadband still run on a dial-up is unacceptable and many more throughout the country, even in London, are receiving poor service,” said John Allan, chairman of the FSB.

“Evidence from our members shows this clearly is a problem affecting all corners of the UK, rural areas and cities alike. While progress has been made with the residential market, businesses have not enjoyed the same benefits, which is holding back their growth.”

Harsh criticism

Finland plans to have a baseline speed of 100Mbps by 2015 while South Korea wants to see citizens equipped with 1Gbps connections by 2017.

By contrast the UK government’s ambition is to provide 95% of the UK business broadbans with speeds of 24Mbps or higher by 2017, with the rest having a minimum speed of 2Mbps.

“This is not sufficiently ambitious,” says the report.

It also questions the way UK business broadband has been rolled out in the UK.

BDUK, the group set up to spend £530m of government money allocated for rural broadband, has come in for criticism for delays in distributing funds to councils and for awarding every contract to former monopoly BT.

The harshest criticism was delivered by a Commons Public Accounts Committee report that concluded the government had “ripped off” taxpayers.

The FSB report found that coverage in rural areas was “either very poor or non-existent”.

“Small firms located in these areas are at a competitive disadvantage,” it says.

Higher prices

UK business broadband
BT is busy putting fibre in street cabinets but it doesn’t always reach business parks

Although the problem is worse in rural areas, businesses in towns and cities can also struggle with low broadband speeds, the report finds.

It highlighted a business park in Greater Manchester which is located a four-minute walk from a cabinet enabled with fibre-optic broadband. While residents enjoy good speeds, the park is not part of current broadband rollout plans.

Furthermore, the businesses based there have to pay a lot more for their leased lines than consumers pay – a typical installation charge of £500 and an annual rental of £5,200 plus VAT.

Andrew Ferguson, founder of broadband news site ThinkBroadband, explains: “In terms of the failure to get super fast UK business broadband to the many industrial estates around the UK, with the original Openreach commercial roll-out the issue was often that the cabinet serving the 40 to 50 businesses was likely to bring in less revenue than a residential cabinet serving 200 to 300 homes.

“There is the option of leased lines, which you can get practically anywhere in the UK if you are willing to pay the price but for many small businesses this cost is far too high.

“The best advice if no faster option is available to businesses is to pester their local authority, particularly if the BDUK project for the area has some EU funding too, since a condition of the EU funding is that it is used to help businesses.”

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