A report by the Commons Welsh Affairs Select Committee said that "slow spots" and "notspots" are hindering the operations of existing businesses in Wales, and are deterring new ones from choosing to locate there, to the cost of the local economy.
Both the UK and Welsh governments must start working together to bring broadband services in Wales up to speed with the rest of the UK, the report says, by promoting mobile and satellite technologies, particularly in remote areas of Wales, rather than relying on rolling out fibre-optic cabling.
According to UK communications regulator Ofcom, while broadband availability in Wales has been catching up with the wider UK in recent years, that gap has recently widened.
In Ofcom’s 2012 Communication Report for Wales, 74% of UK homes had broadband versus 71% of Welsh homes in 2011.
In 2012, that gap had widened from 3% to 8%
74% of UK homes had broadband versus 71% of Welsh homes in 2011.
In 2012, 76% of UK homes have broadband versus 68% of Welsh homes, widening the gap from 3% to 8%.
Ofcom says that 16% of premises in Wales are situated further than 5 km from an exchange (compared with the UK average of 13%), increasing the incidence of notspots and slowspots.
In the report, the Country Land and Business Association (CLA) says that rural businesses suffer the most from a lack of broadband access.
“Without broadband, rural areas will continue to struggle,” the CLA said, “this being exacerbated by government efforts to digitalise most forms of administration, such as the single farm payment and the whole-farm approach.
“Although the government’s efforts appear laudable, they also fail to recognise that without broadband connectivity, considerable effort and time is wasted, leading to an economic disadvantage for rural businesses and the rural community. This is very much the case for rural Wales.”
While the UK government has pledged to provide the UK with the “best broadband in Europe” by providing access to fibre-optic broadband for 90% of the UK by 2015, the report says that the Welsh Government aims to provide all Welsh businesses with access to next-generation broadband by “the middle of 2016”.
However, the cross-party group of MPs said that both governments must ensure that the roll-out of fibre-optic broadband services should not be achieved at the expensive of “delivering a good broadband service for all”.
The report concluded that the delayed 4G spectrum auction, which is planned for 2013, must ensure that 4G services are available to at least 98% of people in Wales.
“It is hard to believe, but in mid-2012 there are still some areas of Wales where people have no connection at all,” said Monmouth MP David Davies, the chair of the committee. “It is impossible to see how businesses or the economy can develop in these areas. Both governments have extremely ambitious targets for broadband provision and there is little time left to meet them.
“Wales must continue to receive the funding and political leadership to ensure that broadband provision is at the very least in line with the rest of the UK, and that the remaining slowspots and notspots in Wales are eradicated.”