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The Government recently announced an extra £50m of funding for new projects to push forward it's ambitions of get superfast broadband rolled out to every community in the UK by 2015.
According to Ofcom only 0.2% of UK households have a fibre-optic broadband connection, compared with 12% in Sweden and 34% in Japan, which leads the world.
The proposals should mean that fibre-optic links are made to telephone "cabinets" in every area with the "last mile" connection to subscribers' homes being made using the existing copper lines.
The updated system, known as FTTC (Fibre to the Cabinet) will generally be capable of providing a top speed of about 40Mbps, compared to FTTH (Fibre to the Home) which can reach 100Mbps or more.
Fibreoptic cable has to replace all existing copper lines to the 50Mbps or more that is already being achieved in the UK by Virgin through its limited cable network.
So what's the problem? BT is in a strong position to prevent it's rivals from offering these services to businesses. Rivals have to use the existing BT ducting or poles but will only be allowed to offer residential services. That does distort the market – but an Ofcom study will not report until 2012 and might only change that in 2013.
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