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Government Rejects Broadband Subsidies

21 May 2003

Stephen Timms, the E-Commerce Minister, indicated today that the Government has no plans to subsidise the rollout of broadband to ensure universal availability, BBC News reports.

Giving evidence to the House of Commons Environment Select Committee, the Minister expressed his view that promoting competition between service providers would be a more effective tool in the long-term than financial intervention from the state.

Mr Timms acknowledged that "over a quarter of households in the country are not within reach of an affordable broadband service today".

He commented: "I think if you look at the history of the development of telecommunications, what you find is that the best approach is a market led approach and that where you have had attempts made to provide large government subsidies to encourage the roll-out of new technologies, that by and large has not been very successful.

"There is a short term gain, but you end up with technology that actually people don't want and, as the technology moves on... there is a market distortion introduced by large amounts of public subsidy proves to be a disadvantage in the long-term."

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