The government will take £100m from the £5bn national infrastructure investment pot over the course of this Parliament in a move to speed up broadband networks in selected urban areas. Rural areas, meanwhile, have been passed over.
George Osborne announced the extra cash that the likes of BT and Virgin Media will be able to bid for in his autumn statement today.
"The government will invest £100m to create up to 10 ‘super-connected cities’ across the UK, with 80-100 megabits per second broadband and city-wide high-speed mobile connectivity," said the government in its National Infrastructure Programme report, which was published immediately after the chancellor finished his mini budget speech in the Commons today.
"There will be a particular focus on small and medium-sized enterprises (SMEs) and strategic employment zones to support economic growth. Edinburgh, Belfast, Cardiff and London will all receive support from this fund, and a UK-wide competition will decide up to six further cities that will also receive funding."
That investment comes on top of the £530m Broadband Delivery UK (BDUK) funds already dished out by the government to local authorities and Scotland.
Over the government's next fiscal year (2012-2013), £20m will be allocated to help fun "super-connected cities". In 2013/14 a further £60m will be spent, then in 2014/15 the final £20m left in that pot will be used.
But, surprisingly, no extra cash was set aside by Osborne today for rural areas that are crying out for investment in broadband.
Some players that have been involved in bidding for BDUK funds have complained that the money allocated falls short of the investment needed from government to ensure that Blighty has the "best superfast broadband network in Europe by 2015".
Others have walked away from the cash, grumbling that "uncertainties" around incumbent BT's restrictive physical infrastructure access (PIA) pricing plans was the reason for withdrawal.
In the NIP report, the government said it wanted to use the European Regional Development Fund (ERDF) to roll out superfast broadband.
Draft guidance on that plan is expected next week. UK.gov reckoned up to £100m would be available from that pot. It said it would begin working with local partners to start making this happen.
However, that cash has not been secured yet, thereby leaving the government open to criticism for acknowledging that it does indeed need more investment during this Parliament to achieve its ambitious plans.
As part of the plan, the government also confirmed that communications regulator Ofcom would next summer publish data based on a scorecard that focuses on speed, take-up and coverage, price and choice.
BT said today that it was happy with the Treasury's decision to dish out cash to boost urban broadband networks.
“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 roll out plan and these funds could help us go further," it said.
"We look forward to working closely with the selected cities to see what can be achieved."
The national telco added that it was "working hard" to help bring next generation broadband to rural areas in the UK.
"Large swathes of the countryside will be able to access super-fast broadband as BT continues its roll-out and as funds already lined up by the government become available in the next five years or so," it said. ®