Private firms "should pay for superfast Internet"

By Peter Griffiths

LONDON (Reuters) - The private sector should pay for a new super-fast broadband network seen by ministers as crucial to the economy, a review for the government said on Friday.

Francesco Caio, vice-chairman of Lehman Brothers in Europe, who led the review, said billions of pounds of investment should come from broadband providers rather than public funds.

The government says the new network would deliver Internet speeds up to 25 times faster than current connections, allowing the download of films or music in seconds.

Ministers say faster broadband is essential to help businesses work over the Internet and keep Britain as a leading online economy.

"The case for a public intervention at this time is weak at best," Caio said. "There is little evidence in the short term the UK is going to suffer from the lack of an extensive next generation access network."

His report found no immediate need for the government to intervene to help set up a fast network. Companies such as Virgin Media and BT have shown signs of wanting to invest in the new system and businesses and consumers are no worse off without it at the moment, the report said.

However, the report said superfast broadband will become a key "digital utility" in the years ahead and the government should help it to emerge.

The report contains the following recommendations: