At the moment, British Telecom (BT) has to provide a copper cable connection to homes in the UK, something that’s fine for landlines and current broadband connections. But, in order to have drastically faster speeds, what’s needed are fiber optic cables. And they cost money. A lot of money.
But BT has said it’s willing to invest $3 billion in a fiber optic network that will cover about 40% of the UK by 2012, as well as putting fiber optic into about a million homes – as long as government watchdog Ofcom will allow it to make a fair return on its investment.
BT chief executive Ian Livingston told the BBC:
"Broadband has boosted the UK economy and is now an essential part of our customers’ lives. We now want to make a step-change in broadband provision which will offer faster speeds than ever before. This marks the beginning of a new chapter in Britain’s broadband story."
Currently Virgin Media, a rival to BT, uses fiber optics, although the connections to homes are made with copper.
BT is presently allowed a 10% return on the money it puts into its Open Reach programme, but with fiber optics “we would be looking for more than that," Livingston said.