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By Mark Graham, 8 May 2001 17:30

NEWS Rural areas are currently lagging behind when it comes to getting broadband, as companies have no commercial incentive to operate in these unprofitable regions. Under the auspices of the 'UK Online' strategy, the government is inviting consultancies to find ways to attract suppliers to these areas in an attempt to give Britain the most extensive and competitive broadband market in the G7 group by 2005. But Steve Rawlinson, chief technical officer at ISP Clara.net, said the whole issue is about money and claimed the government will have to inject a lot of cash to capture the interest of service providers. He added that the idea of improving broadband services to rural or urban areas is irrelevant unless there is a definitive stand made on the unbundling of the local loop. He told silicon.com: "Other telcos are unlikely to look at rural areas unless they first of all have access to exchanges, and then determine whether it's financially viable to share the cost of setting up shop in these smaller customer bases." He added: "It's all about money, and ISPs will need an incentive from the government to jump on board. ISPs are focusing on urban areas where there is a much greater density of potential customers." A cabinet office spokeswoman said: "There's a need to aggregate public sector demand. If the public sector in rural areas can get together and highlight the need for broadband for libraries and surgeries and so on, then it becomes more appealing for providers." Alcatel chairman Peter Radley, who chairs the broadband stakeholder task group on public procurement issues, welcomed the new study. He said: "It will put us in a much better position to advise the government on the way forward when we make our recommendations to ministers." The government plans to appoint consultants to look at the issue by July and predicts reports will be completed by September.