The Broadband Stakeholder Group (BSG), the government’s advisory body on broadband and digital convergence, said Monday that the UK faces being left behind in terms of next generation broadband.

The warning comes as the group releases a report which concludes that uncertainties surrounding investment in next generation broadband must be resolved within two years, or competitiveness in the UK will suffer and the digital divide widen.

According to the report, the country’s existing and planned broadband infrastructure will not meet the future requirements of the most intensive users and will not deliver the bandwidth that content providers and end users will expect.

In terms of international competitiveness, the UK is being left in the dust, the BSG said.

Kip Meek, chairman of the BSG, said: “We have a limited window of opportunity. If steps are not taken within the next year to prepare for next generation broadband, then we may find ourselves in a position where it is too late to catch up.”

While BT is looking at delivering just 24Mbps under its next generation network initiative, dubbed 21CN, other European carriers are blazing a trail with much hgher speeds.

From this year, France Telecom will offer Fibre to the Home (FTTH), delivering symmetrical broadband speeds of up to 100Mbps, while Deutsche Telekom in Germany is sinking Eur3bn into a VDSL network capable of delivering speeds of 50Mbps. BT last week revealed that it has mothballed its FTTH strategy in favour of investment in 21CN.

Ofcom has not yet responded to requests for comment on the report but in February, Peter Phillips, senior partner for Strategy & Market Developments at the UK regulator, attended a conference on Next Generation Networks in Copenhagen, Denmark.

There the regulator conceded that the debate on next generation access has been quieter in the UK “because there appears limited appetite to deploy fibre other than to large businesses.” Ofcom denies there is any regulatory problem in the UK which is preventing fibre being deployed and BT would agree. “Any plans for FTTH have been put on ice by market not regulatory conditions,” the incumbent said.

It is estimated that fibre costs around Eur200 per urban home passed, plus the costs of the user equipment.

Although more than half the UK’s adult population has a broadband connection at home, the vast majority connect at narrowband broadband speeds. The BDG is now calling on the government to establish a target to ensure that by 2012, the UK remains in the top quartile of nations involved in the Organisation for Economic Co-operation and Development (OECD) initiative in terms of reach and quality of broadband.

The group also recommends that Ofcom sets out the principles of its regulatory approach for next generation broadband within 12 months in order to establish the right balance of investment incentives and competition for the market.

Ofcom’s view is that the challenge posed by next generation networks is not between competition or investment, but how it can best stimulate both. “Our belief is that guaranteeing equivalent access to enduring economic bottlenecks while deregulating elsewhere is the best way to do that. We’re already seeing that approach is consistent with a massive investment in core next generation networks. And we’re sure it will be the right way for us to approach next generation access too,” Ofcom’s Phillips said recently.