Rural Broadband: Worrying "two–speed economy"

New research from the Federation of Small Businesses (FSB) has found half of rural small businesses are dissatisfied with the quality of their broadband provision (49%). The data showed nearly double the level of dissatisfaction compared to urban small businesses (28%). This issue is predicted to become even more significant as small firms become more reliant on a high quality broadband connection to do business. For example more than three quarters (77%) said that email will be critical to their business in the next two years, while more than half (57%) said broadband will be critical to engaging with their customers.

The current lack of broadband infrastructure serving small firms threatens the expansion of the rural economy currently worth £400bn annually. The business opportunity includes 28% of all UK firms and over one million small businesses.

The FSB research uncovered rural businesses' dissatisfaction across a number of areas, including reliability (47% dissatisfied), upload speed (61% dissatisfied) and download speed (61% dissatisfied). This represents nearly a 50% gap in reported satisfaction levels with comparable urban businesses.

Mike Cherry, National Policy Chairman for the Federation of Small Businesses, said:

"This research paints a worrying picture of a divided business broadband landscape in the UK, and unless addressed highlights a clear obstacle to growth in the coming years. We risk seeing the emergence of a two-speed online economy resulting from poor rural broadband infrastructure.

"It's worrying that as many as 14% of UK small firms still view the lack of a reliable broadband connection as being the primary barrier to their growth. A reliable Internet connection is now viewed as a key business requirement by 94% of small UK businesses, yet continued poor connectivity in rural areas represents a huge missed opportunity for economic growth in these parts of the country. These gaps and weaknesses need to be addressed as a matter of priority with the minimum of 10 Mbps to all business premises by 2018/19."

Improvements to the UK's broadband provision have been made in recent years, with higher speeds available and more packages targeted at the needs of business, but the FSB believes that more could be done. The Government's strategy to deliver 24Mbps broadband to 95% of the country by 2017 is not sufficiently ambitious, especially for the 5% of mainly rural businesses left receiving just 2Mbps, which is barely sufficient for even basic usage.

As a result of the findings laid out in its 'Fourth Utility' report, the FSB is calling for a comprehensive review of broadband policy. This includes measures to encourage more competition for better packages in the business broadband market, a minimum of 10Mbps to all premises in the UK by 2018/19 and prioritisation of fibre-optic roll-out to business parks and enterprise zones.

Sarah Lee, head of policy at the Countryside Alliance said: "We support the FSB's call for a review of the Government's broadband policy. The importance of rural broadband cannot be overestimated, with many deeming it an essential service, alongside water, electricity and gas, yet there is still a marked digital divide between urban and rural areas.

"Our own research shows that 82% of rural people believe superfast broadband is essential to 21st century life and that everyone should have access to it2 but 56% feel the Government is not doing enough to ensure it happens.

"If rural businesses are to be able to compete with those in urban areas it is crucial that they have access to this service. The Government needs to ensure superfast broadband services are available to all businesses, no matter where they are based."

Key Findings
1) 47% of rural small businesses are dissatisfied with their rural broadband reliability, 61% with upload speed and 61% with download speed.
2) 49% of rural small businesses are dissatisfied with the quality of their rural broadband provision, compared with 28% of urban small businesses.