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24 November 2011

Government must avoid two-tier broadband access in rural and urban areas

Reference number: FSB/2011/69

PR News Release
FSB 2011 69
Issue date: Thursday 24 November 2011

Government must avoid two-tier broadband access in rural and urban areas

The Federation of Small Businesses (FSB) is concerned that the Government has yet to make it clear how it will ensure that the UK has a seamless broadband infrastructure to avoid a divide between rural and urban areas, as figures show that for many small businesses broadband speeds aren''t adequate.

The CMA Internet Opportunity Survey, supported by the FSB, shows that many small businesses cannot access broadband connections and so it hampers their productivity and ability to grow – nine per cent cannot access broadband at all, and 22 per cent cannot access current generation broadband at least one of their sites.

For the 84 per cent that can use current generation broadband, there is a marked difference in the typical speeds they receive, but more than a quarter can only just obtain speeds considered by Government to be a minimum level of service – 2Mbps.

The Government has made a commitment to ensure there is universal broadband coverage by 2015 and superfast broadband coverage for 90 per cent of the population in each local authority by 2015. However, at a breakfast meeting with The Department for Culture, Media and Sport on broadband, the FSB raised concerns that a divide will still remain between urban and rural areas as more urban parts of the country receive superfast broadband and rural areas are left in the ‘digital'' dark. A fast, reliable and guaranteed broadband service is crucial for small businesses wherever they are as the Government looks to them for greater economic growth.

Access to broadband allows small firms to expand into new markets, and allows staff to work flexibly. In 2009, the internet contributed £100 billion to UK GDP and annual online sales grew faster from small and medium enterprises than larger companies between 2004 and 2008. So the potential for growth among small firms is great – the Government just needs to ensure they give firms the right tools – including broadband infrastructure – to achieve this.

The FSB is calling on the Government to:

  • Set out a clear commitment to deploying superfast broadband across the UK and say how it will avoid a two-tier country with broadband speeds and connectivity
  • Set out as quickly as possible, where the gaps in coverage are expected to be after 2015 and set out a commitment beyond 2015
  • Recognise the importance of broadband for business growth, innovation and flexible working by ensuring they are key to all policy decisions
  • Include business coverage and speed as indicators within the Government''s UK broadband scorecard

The FSB is calling on local authorities and Local Enterprise Partnerships to:

  • Work with their small business communities to develop local broadband plans that reflect the needs of local businesses

John Walker, National Chairman, Federation of Small Businesses, said:

"With the growth of the internet, small businesses have been able to break down some of the barriers to markets, become more efficient as well as innovate and grow. A fast, reliable broadband service is crucial for this wherever a small business may be. However, we are concerned that the divide that currently splits urban and rural areas in terms of their broadband access, will not be resolved by the Government''s existing commitments.

"It is important the Government sets out clear commitments and details on how it will deploy superfast broadband across the entire country up to and beyond 2015. It must ensure that businesses in all parts of the country can compete on a level playing field. With the Government looking to the private sector to pull the UK economy onto firm ground, we cannot help only a few businesses – we must ensure all small firms have the best opportunity available to them to grow, innovate and take on staff. Good broadband access, connection and speeds are central to that."