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FSB says two-speed digital rollout threatens expansion of £400bn rural economy

The current lack of broadband infrastructure serving small firms threatens the expansion of the £400bn rural economy, according to a new report from the Federation of Small Businesses.

New research from the FSB has found half of rural small businesses are dissatisfied with the quality of their broadband provision.

The data showed nearly double the level of dissatisfaction compared to urban small businesses, with 28 percent dissatisfied.

The issue is predicted to become even more significant over the next two years, as small firms become more reliant on a high quality broadband connection to do business.

More than three quarters (77 percent) told the FSB that email will be critical to their business, while more than half (57 percent) said broadband will be essential to engaging with their customers in the next two years.

The current lack of broadband infrastructure serving small firms threatens the expansion of the £400bn rural economy. 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 percent dissatisfied), upload speed (61 percent dissatisfied) and download speed (61 percent dissatisfied).

This represents nearly a 50 percent 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 per cent of UK small firms still view the lack of a reliable broadband connection as being the primary barrier to their growth.

“A reliable connection is now viewed as a key business requirement by 94 per cent of small UK businesses, yet continued poor connectivity in rural areas represents a huge missed opportunity for economic growth in many 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, and a pledge to deliver minimum speeds of 100Mbps to all by 2030.”

As a result of the findings laid out in its ‘Fourth Utility’ report, the FSB is calling for Government to conduct a comprehensive review of broadband policy.

This includes measures to encourage more competition for better packages in the business broadband market, a commitment to accelerate the roll-out of 4G mobile services and prioritisation of fibre-optic provision to business parks and enterprise zones.