UK Chancellor announces more funding for broadband

Better broadband networks in 10 cities across the UK are being promised by the government.

In his autumn statement, Chancellor George Osborne announced £5bn of spending on infrastructure projects such as roads, railways and broadband networks.

£100m of that is set to boost broadband coverage in London, Belfast, Edinburgh and Cardiff.

A further six cities will be identified later.

"For the first time we are identifying over 500 infrastructure projects we want to see built over the next decade and beyond. Roads, railways, airport capacity, power stations, waste facilities, broadband networks," the chancellor told the House of Commons.

"It means creating new superfast digital networks for companies across our country. These do not exist today. See what countries like China or Brazil are building, and you'll also see why we risk falling behind the rest of the world," he said.

"Our great cities are at the heart of our regional economies. And we will help bring world leading, superfast broadband and wi-fi connections to 10 of them - including the capitals of all four nations.

The plan is to create a hub of super-fast cities with broadband speeds of between 80 to 100Mbps (megabits per second) and city-wide high-speed mobile connectivity.

The current average broadband speed in the UK is 6.8Mbps.

Firms including BT and Virgin will be able to bid for the money, which they can use to fill in urban notspots or increase wi-fi coverage, a spokesman for the Department of Culture, Media and Sport told the BBC.

BT welcomed the news.

"This is a positive initiative that will help ensure our major cities have the best available super-fast broadband. BT is already upgrading large parts of these cities under its commercial rollout plan and these funds could help us go further. We look forward to working closely with the selected cities to see what can be achieved," said a spokesman for the firm.

But critics said the money would have been better spent boosting rural broadband.

"£100m between ten cities is about £1.50 per person. If the government had put the money in rural project it would have boosted rural businesses. Broadband is already available in cities," said Andrew Ferguson, editor of broadband news site ThinkBroadband.

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Public funding for new infrastructure projects will come in two chunks - £5bn in the period to 2014/15 and the remaining £5bn to cover longer-term projects over the five years from 2015/16.

The chancellor said that the government has also negotiated an agreement with two groups of British pension funds, to unlock an additional £20bn of private investment in modern infrastructure.

The government wants the UK to be the best place for broadband in Europe by 2015.

BT recently accelerated its superfast broadband rollout and now plans to offer fibre services to two-thirds of UK premises by the end of 2014.

Virgin Media has also turned up the speed dial on its services, which is available to half the homes in the UK.

Broadband rollouts in rural areas have been far slower with critics complaining that the £530m set aside by the government to encourage investment in these areas is insufficient.

Much of that money has been allocated to local councils identified as having broadband blackspots but few have yet got projects up and running.