Ofcom opens door for 10 times faster broadband connections

·Telecoms industry told to install high-speed network
·Concerns raised over Britain's digital divide

British internet users can look forward to surfing the web at more than 10 times the speed currently available after Ofcom, the communications watchdog, called on the telecoms industry yesterday to spend billions on next-generation networks to keep pace with countries such as France, Germany and the US.

But not everyone will benefit from the next wave of broadband, which will enable fast downloading of movies and even high-definition online TV, as investment is likely to focus initially on urban and affluent areas, raising concerns about a widening digital divide.

More than half the UK is connected to broadband and the average speed has trebled over the past year and a half to 4.6 megabits per second - more than 80 times the speed of a dial-up internet connection.

But the rise of video-on-demand services and the availability of TV shows and movies for download through sites such as Apple's iTunes means the UK's ageing phone network is becoming stretched to capacity. Consumers are watching their favourite BBC shows on its iPlayer, while Channel 4's 4oD service and ITV.com have a wealth of commercial television for online viewing.

"Today's access network, at some point in the future, will run out of steam," said Ed Richards, Ofcom's chief executive, yesterday. "Consumers will demand faster and faster access. Very few people agree on exactly when this is going to happen but many people do agree it is only a matter of time."

Countries such as France, Germany, the US, Japan and South Korea have already started investing in networks which can deliver up to 100 megabits a second, enough for a dozen high-definition TV channels. If the UK failed to follow suit the economy could suffer, Mr Richards warned.

Last week, Stephen Timms used his first big speech as minister for competitiveness to warn that the UK risks being left behind. "We need timely deployment of technology," he said. "We can't afford to lag behind others. We need the right conditions for the market to operate effectively."

Ofcom yesterday launched a two-month consultation asking industry and the public for their views on what the next generation of network would look like and who would pay for it.

Ofcom envisages a "mixed economy" in the UK, with some areas connected by ultra-fast fibre optic cables either directly into houses or into the green street cabinets that act as the first gateway into the country's homes.

Other areas will use BT's existing copper phone lines, with new technology increasing speeds, or rely on wireless broadband services or even satellite services in remote rural areas. Even the UK's network of sewers could be used to carry cabling for super-fast broadband as in other European cities such as Paris.

About 1,400 metres of fibre optic cable has already been laid through Bournemouth's sewers and several British academic institutions, including Aberdeen University and Bath University, are already using sewers for internet access.

Mr Timms has suggested the government could help fund some roll-out of next generation broadband, but the Treasury is unlikely to spend anything like the estimated £25bn it would cost to rip out 30m phone lines.

BT is installing fibre optic cables into 9,500 homes being built in the Thames Valley at Ebbsfleet, but it is unlikely every-one in the UK will get the same level of service.

"There will be an issue of differential delivery," Mr Richards said. "But let's get it under way first."

There were similar concerns when broadband was introduced in the UK at the start of the decade, but it is now available to 99.6% of the country.