The Broadband Stakeholders Group (BSG), a government advisory body, has recommended that telecoms carriers and service providers should share the cost of extending fibre optic networks in the "last mile" to customers' premises to increase broadband coverage in the UK.

The BSG suggests that local authorities or firms such as large building companies should dig the trenches for the cabling, paid for jointly by carriers and service providers, which could then share physical infrastructure to provide high-speed fibre links to companies and homes. Currently each operator digs its own trenches. This accounts for up to three-quarters of the cost of laying new cable, an expense that often prevents individual operators from extending broadband services. If this cost can be reduced, operators are more likely to increase broadband coverage, said BSG chairman Keith Todd.

"The cost of digging is 65 to 75 percent of the total. The idea is to separate out the digging of the trenches from the ownership of the fibre," said Todd. "If you can share that as a managed facility the costs are lower. Even incumbents that have dug trenches are saying why can't we open up our trench?"

Network innovation

Many critics say that the slow rollout of broadband services in the last mile is partly due to BT's dominance of the local loop that runs wires directly to end-users' homes and offices. A recent report from think-tank Demos suggested that control of BT's local loop should be handed to a non-profit company to improve access to all service providers and increase innovation in network services.

Demos said it recognised the short-term advantage of allowing BT to roll out broadband DSL services as quickly as possible, but said there were long-term risks with this strategy.

"The UK is sleepwalking towards a broadband monopoly (for BT), with little opportunity or incentive for innovation within the network. The government has consistently ducked this issue and tackling it should be a top priority for (new telecoms watchdog) Ofcom from the start," said the report's author, James Wilsdon.

However, Ed Richards, a senior policy adviser to the government on Internet and IT matters, denied competition was being stifled. "To say we are heading for a broadband monopoly just cannot be supported by the facts," he said.

Richards pointed out that the French and Italian national carriers each have about 70 percent of their domestic broadband market, and Deutsche Telekom in Germany has 98 percent.

"In the UK it is quite different. BT has about 30 percent of the market and BTOpenworld has 20 percent," said Richards. "That's more competition in infrastructure and retail than anywhere else."

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