Renewed fears of ‘digital divide’ as bidders ignore regions in wireless internet auction

This week’s flop of the government auction of broadband radio licences renewed fears of a ‘digital divide’.

This week’s flop of the government auction of broadband radio licences renewed fears of a ‘digital divide’ that will leave some companies unable to reap the benefits of e-business.

The Department of Trade and Industry said just 16 of the 42 licences had been sold to provide high-speed wireless internet access on the 28 GHz spectrum.

Almost all the interest centred around areas of dense population such as London, Greater Manchester and the West Midlands. Entire regions, including the south east outside London, the south west and Wales, were ignored by the bidders, which included Energis and Norweb Telecom.

Access to broadband wireless is seen as key to the development of the internet economy, offering extra capacity to that available from cable or fixed phone lines.

The government is now set to hold an enquiry into the auction, which raised just £38m for the Treasury compared with some forecasts of up to £1bn. The DTI also pledged to examine ways of awarding licences where none were sold, and extending broadband access to all regions.

Trade and industry secretary Stephen Byers this week repeated his warning of the dangers of a two-speed digital economy. ‘We need to ensure that old disparities between and within regions are not reinforced,’ Byers told a local government conference in Liverpool.

The Confederation of British Industry has convened a new E-business Council to promote the adoption of internet technologies by industry. It will be made up of 30 CBI members seen as leaders in the development and use of e-business.