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November 19, 2013

Government claim fibre broadband spending will return £20 for every £1 spent

The government have defended their £1.2 billion investment of tax payers money to help with the roll out of next generation fibre optic broadband claiming it will return £20 to the UK economy by 2024 for every £1 it is investing, even though many claim that it is once again helping BT become a monopoly broadband provider since they are the only company to win any of the public funds and are the only company left in the bidding process for the remaining funds.

However, the government say that for every £1 that they are investing in the broadband deployment the UK economy will benefit by £20 by 2024. The Broadband Delivery UK (BDUK) scheme was set up to help distribute the government funds to the various areas where fibre optic broadband roll out was needed but would not be covered by BT Broadband or Virgin Media with their own funding because they were not deemed to be financially beneficial to the companies to do so.
Originally the government put £530m in the pot with local authorities who bid for funding expecting to match this amount for each of their own individual schemes, a further £250m is to be put into the pot after 2015.

These findings were made in a government commissioned “UK Broadband Impact Study – Impact Report” and other benefits that were detailed were that households could save £45m per year by 2024 with more people being able to remote work from home and that by 2014 that it would help with the creation of 11,000 jobs and a net increase in jobs of 20,000 by 2024.

Some will wonder if BT really needed the extra funding in light of their recent high spending on rights for both Premiership football which has cost them £738 million for 38 live games per season for 3 seasons and their 3 years of exclusive UK rights to the Champions League football from 2015 which is to cost them £900m.

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