Stephen Timms MP

DETI Broadband Conference

I can remember, as no doubt others can too, when there were calls for mobile operators to be subsidised so that their services could be extended into rural areas and made available to people on lower incomes. What has actually happened with mobile is that we have four competing operators with an almost equal share of the market, and the fierce competition between them has driven rapid roll out of their services and imaginative marketing with innovations like low cost pre-pay packages. The result has been that mobiles have been taken up much faster than any degree of subsidy would have achieved, and - along with Italy - we have one of the first third generation mobile services in Europe. My Italian counterpart told me recently that there are now more mobile phone subscriptions in Italy than there are people. We are not quite in that position yet, but with 50 million mobile subscribers we are not far off, and it has been competition that has delivered that success.

We want to see the same dynamic with broadband, with the most competitive and extensive broadband market in the G7 by 2005. We want to stimulate competition in the market, interfering as little as possible, and I know you have heard today about the progress that has been made.

We have today some two and a half million broadband connections in the UK - up from one million just a year ago. The number is growing at some 150,000 per month. The total is split almost equally between ADSL and cable, and over 200 ISPs compete in retail market using BT wholesale ADSL product. It has been a competition that has driven down prices and driven up take-up. We overtook France recently to become the second largest broadband network in Europe, after Germany - and the gap with Germany narrowed dramatically over the past year, as, with 1.7 million additional new connections, the UK broadband network grew faster than any other G7 country and much faster than Germany which added about half a million.

And so we have placed competition at the heart of the new telecommunications regime being implemented now across the whole of the European Union, and at the heart of the brief which the new Office of Communications, Ofcom, will be working to - and I am delighted that the Chairman of Ofcom, David Curry, Lord Currie, is with us this evening.

One new element in the competitive mix which I believe will be particularly important is wireless. There have for some time been just a couple of thousand wireless broadband connections in the UK, but I believe that figure will increase rapidly.

North Yorkshire County Council is already delivering services through wireless, with a solution provided after an open tender process. The East of England Development Agency set up a demand registration website to identify clusters of demand which are then offered to the market through an open competition, in the "Connecting Communities" project. Last week, EEDA announced a further 10 clusters to be opened up for competition. Before that campaign, broadband availability was 53% in the region. It will now move to 80%. That is all encouraging evidence of how initiatives led by Regional Bodies can accelerate the delivery of competitive broadband solutions in rural communities.

There is also space for further innovation and new entrants. We recently concluded a successful auction of fifteen licences in the 3.4 GHz band for fixed wireless broadband, between them covering the whole country, and I hope we shall shortly see services rolled out, with the benefits of sharpening competition and reaching new areas not previously served.

With more than three-quarters of the country's population now having access to affordable broadband provided by ADSL, cable or fixed wireless, the UK is at least as well covered as the US. And over 40% of the population is able to choose between ADSL-based and cable modem-based broadband services.

Behind the numbers are many real human stories. "Bullying Online" sounds like something I ought not to be supporting. But its a charity set up to give support to Internet-savvy youngsters. It took up broadband, recognizing that time can be critical for a child in trouble, and it is now more confident about the quality of its service. The team are also better able to conduct their research into educational and other issues on line. It was NTL who equipped them for broadband free of charge.

In a very disadvantaged area of East Manchester, the "Eastserve Project" is a partnership between education, social services and the police, now providing 24-hour access to services. That project has brought about 10000 broadband connections via fixed wireless and the figure is set to rise to 1,500 by the end of the year.

In Cornwall, where the ActNow project with BT has made great strides with European funding in broadband provision in a rural area, I met a print business which had used broadband to reduce the turnaround on its printing jobs from three days to one day, and a web marketing company which had relocated from London to Cornwall simply because they knew that broadband was available there - and had been able to expand much faster than if they had stayed in London. Those are the kind of benefits which broadband provides, and we want them to be available, not just in some places, but everywhere.

So I agree with what Ian said this morning, that more needs to be done to bring affordable broadband access to all communities in the UK. And I look forward to seeing the final result of the tender reported today taking advantage of a Government amendment to Comms Bill - 100% coverage in Northern Ireland is a fantastic goal. It is telling that 27 organisations and consortia responded to the European-wide tender. This level of vision and ambition is inspiring others around the UK too.

Ian spoke as well about public sector aggregation of demand to bring value for money to public procurement. The Prime Minister announced last November at a meeting we dubbed the "e-Summit" at Westminster, that we plan to bring together demand for broadband services across Education, Health, criminal justice system and other public services worth over £1 billion over three years.

In England we are working to use that process to extend broadband availability. Nine out of ten rural households are within a couple of kilometres of a primary school - and every primary school is to have at least 2 Mbits/s two-way broadband by 2006. Once the local school has broadband, I want to ensure that others in the area can get it too.

By the end of next month, there will be a Regional Aggregation Body (or RAB) in each of the nine English regions, working in partnership with the RDAs. In each region, the RAB will aggregate individual public sector broadband requirements and present them as one bigger package to the market. We want to deliver better value deals and drive up availability by making it more attractive to telecoms companies to make the capital investment to provide broadband in new areas. The constitution for the RABs has been drafted and the legal entities are being created. The recruitment process for staff to run the RABs is also well underway.

There are a number of key advantages from the fact that we will be doing the aggregation at the regional level. It means we can complement the very strong commitment to extending broadband access among the Regional Development Agencies, who will be supporting the RABs. It also means we will see a variety of approaches being developed and will be able to benchmark the RABs against each other - and we will be able to take the best ideas from the best performing RABs and spread them as best practice among the others. It will be a powerful example of using the market as a lever for improving performance within a framework managed in the public interest by the public sector.

I was the Minister for Schools before moving to DTI and it does not require too much imagination to see how big an impact on learning broadband can have. With the Curriculum Online programme now going forward with the support of the BBC, there is a growing wealth of superb material available online and we can see the prospect of young people increasingly being able to follow a wider range of courses, and being able to work at a speed which suits them best. So we can raise the standards of teaching and learning through broadband - and we shall be improving the health service too.

Public libraries across the UK are having broadband connections installed. Over 90% already have broadband. What I would like to see is every public library becoming a wi-fi hotspot, so that students and others, will be able to go into their local library with their wireless-enabled laptop - and increasingly all laptops will be wireless enabled - and access the library's broadband connection via wireless to surf the Net and pursue their studies. "Resource" is the library resources agency of the Department of Culture, Media and Sport, and they are working with the DTI Rural Broadband Unit to see how this can be achieved. I set the Unit up earlier this year with Alun Michael the Rural Affairs Minister to focus our efforts on improving broadband availability in specifically English rural areas.

Broadband allows small businesses to access telecommunications services which until very recently were only feasible for corporates. There can be a real impact on the growth and profitability of the smaller firms. Research suggests that businesses with broadband may be twice as likely to create new jobs as businesses without. But many small companies are unaware of how they might benefit from broadband. So the Government's UK Online for Business campaign has for the past year been concentrating increasingly on helping them find out. As more services go on-line, and local authority procurement, for example, does too, so there are more and more reasons for businesses to consider the impact of high-speed connectivity on their future success.

To attract more individual consumers more needs to be done to stimulate compelling content. The major existing content providers, such as the BBC and the big Hollywood studios, will have a major part to play. And the big Internet Service Providers need to think in a strategic way about what drives broadband adoption. The UK is also rich in smaller companies with great potential as broadband content developers. Our focus has been on the market barriers to content developers realising their potential, and looking at possible solutions. We recently published a feasibility study on three potential broadband content initiatives to assist the evolution of successful, competitive broadband content creation in the UK.

• The Broadband Visitor - which would provide consumers with new broadband experiences in the context of travel and tourism. ;
  
  
• The Broadband Channel - to commission new and exciting broadband content and be a showcase for innovative creative companies;
  
  
• Broadband Collaborative Working - a pilot for demonstrating productivity gains from collaborative working using broadband-enabled tools by "pay as you go".

Reaction from industry and others has been positive and we are looking at how we might take these initiatives forward.

We are seeing some great use of the web by the public sector. A broadband experiment by the Telewest cable television provider in Birmingham last year demonstrated the very high level of demand for good quality online information from the National Health Service. NHS Direct Online gets half a million hits a month. Increasingly I believe we will see public sector agencies providing content that will drive up broadband take up.

The ambition demonstrated today and led by the Department of Enterprise for Northern Ireland has highlighted the opportunities I believe we must grasp across the UK for our future prosperity. I know you will have enjoyed the programme put together for today with Ian Pearson's leadership by DETI's Telecoms Team with the DTI Broadband Adviser, Leslie Orr. I am delighted to be able to join you this evening and look forward now to learning even more about the success of broadband in Northern Ireland. And so I would ask you to join me in a toast: to the success of broadband in Northern Ireland. Broadband in Northern Ireland

Thank you very much.