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Competitive broadband could add £22bn to UK economy

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19-11-2003 6:02pm

#1

dahamsta

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Competitive broadband could add £22bn to UK economy
By Tim Richardson
Posted: 19/11/2003 at 09:32 GMT

The widespread take-up of broadband could give the UK economy a £22 billion shot in the arm, according to research published today.

The centre for economics and business research (cebr) found that UK productivity could rise by 2.5 per cent by 2015 - the equivalent of workers toiling for an extra hour each week.

Not only would people benefit, cebr reckons that government borrowing would be down by £13 billion by 2015 through lower public sector spending and extra tax revenues from a faster growing economy.

However, there is an "if". And that "if" is that the UK will only reap these economic benefits "if" there is greater competition, greater wholesale competition within the UK's broadband market.

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#2 20-11-2003 2:02am
Xian

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from the same article:

"Oftel is concerned that... cuts in wholesale charges for ADSL would also make it even more difficult for operators to introduce other technologies - such as satellite or wireless - into the marketplace"

Although Oftel is coming from the perspective of dealing with an already competitive market, the question remains whether it is advisable in our market, as has been suggested, to force the reduction of bitstream pricing when it will only serve to further distort an already terminally distorted market.

Is what's needed a placebo (bitstream reduction) or electroconvulsive therapy (promoting cross-platform competition)? You can be sure that Ahern will favour the quick-fix if it makes him look good. Would you, though?

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