PUBLIC funding should be used to attract investment in superfast rural broadband networks, says a report.

Launched by the Carnegie UK Trust and the Community Broadband Network, the document examines the options for future investment in rural broadband in the UK.

The paper – Going the last mile: How can broadband reach the final 10%? – argues that public funding should be used to help attract new investment from other sources.

It also sets out how an 'intermediary approach', supported by a range of funding options, could enable local communities to develop superfast broadband networks in their area.

"Reaching the final 10% of rural households is technically and financially challenging," says the discussion paper, which looks at ways other countries have overcome obstacles.

"We do not claim to have identified the solution – but we hope that the ideas presented here will spark discussion and debate about how the needs of communities in the final 10% can best be met."

New entrants need to access long term loans to design, build and operate so called "next generation access" (NGA) broadband networks, the report says.

The use of financial intermediaries can deliver the right mix of investment for communities to build their networks, it adds.

Provision of long term loans, currently not provided by the market can stimulate the growth of NGA networks, the document suggests.

Approaches which have successfully been used to date to roll-out superfast broadband will not be as straightforward for the remaining 10% of properties, it warns.

The report recommends a more tailored approach – using innovative technology and finance to meet hyperlocal challenges.

"If communities could secure social investment (loans and equity), it would accelerate the roll-out of NGA by increasing the viability of schemes for both communities and operators.

"These schemes could then take place regardless of there being some overbuild by other operators, providing they delivered a long term infrastructure."

The final 10% is a marginal environment to build sustainable broadband networks – if it was profitable then operators would already be delivering services, says the report.

"Rural communities can play a vital role overcoming these challenges by working in partnership with operators to secure finance, drive demand and build the networks.

"Social investment can open up this potential and provide a long-term return to the government."

The Carnegie UK Trust and Community Broadband Network said they would now be working together to take forward the ideas presented in the report.