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This is a guest blog by Katharine Swindells, Volunteer, City Growth Commission.

This is a guest blog by Katharine Swindells, Volunteer, City Growth Commission.

Over the last decades technology has transformed our lives, the way we work, communicate and socialise. Many of us would struggle to go a day without our smartphone or laptop. And as our technology develops, companies have adapted with us. From bus times to shoe shopping to my burrito order, I can find it all online at the click of a button.

So what happens when you don’t have access to this technology? What happens if you’re trying to make a living, but you simply can’t keep up with the speed of technological advancement. According to the City Growth Commission’s latest report, Connected Cities, broadband speed and availability varies vastly across the UK. Some rural areas have barely a third of the connectivity of the national average, and even in urban areas there are still significant holes in availability of broadband service.

It’s only a matter of years before it will be impossible to operate a business without internet connectivity, and if broadband is too expensive, or isn’t even offered in your area, you’ll be isolated, massively limiting your firm’s growth potentially. High-speed internet needs to be provided across the entire country, and soon.

The problem is that the private suppliers have little financial incentive to offer low-cost high-speed broadband to the farthest corners of the nation, and the dominance of the market by just a few players, namely BT and Virgin, means that they aren’t threatened by competition either.

To make matters worse, European State-Aid rules disallow public investment in infrastructure where private sector investment already exists, supposedly to stop the State interfering with the free market. But these restrictions are limiting cities’ ability to ensure infrastructure is of good enough quality to boost social and economic well being; only 64% of EU households have available 30Mbps and just 3% have connections of 100 Mbps.

Something needs to be done to increase connectivity, whether by government enforcing competition upon BT and Virgin, or by working with the European Commission on initiatives such as Connected Communities, which supports small projects to provide broadband across the EU.

We live in the modern world where high-speed internet access is vital for economic growth and social opportunity. This ultimately calls into question whether digital connectivity can still be considered a  consumer good or service, or whether the internet’s huge presence in our lives makes access to it a right for all. If we believe the latter, then government involvement is required to maintain equality of access.

The US experience with the FCCC’s new regulation proposals in April signals a warning of the effect of internet connectivity controlled by companies primarily interested in profit maximisation. Their plan to divide American internet services into “fast and slow lanes” violated net neutrality, allowing large companies to buy faster connectivity at a premium while smaller firms who can’t afford the higher price suffer slower speeds and are less able to compete. Internet providers don’t care that innovative online businesses might be squashed in their early stages because they can’t access a fast enough service.  This is an outright market failure, so it becomes the government’s job to care.

Economic growth does not lie in sacrificing small business in favour of allowing the big internet providers to profit. Maybe it’s time the government took high-speed digital connectivity as though it were heating or transport, a necessity not a luxury that only the fortunate should be allowed.


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