Lack of Fast Broadband is NOT Just a Problem for UK Rural Areas

Take the recent example of Kingsway Village in Gloucestershire, which is home to over 3,000 people and exists inside of the more densely populated (12,000 people) Quedgeley (i.e. a suburb of Gloucester). Just over the road the locals can get a superfast broadband connection from Virgin Media but residents of Kingsway Village have been left with older ADSL services. It’s hoped that BT’s upgrade of the regional Hardwicke telephone exchange could bring FTTC speeds of up to 80Mbps to the area but even that can leave significant gaps.

Last year BT admitted that its superfast FTTC technology would, on average, cover 85% of homes and businesses within an enabled telephone exchange area (here). But the remaining 15% gap could, in terms of population affected, be quite considerable once you realise that most of BT’s rollout has to date been focused upon urban areas (small percentages equal lots of people).

BT’s February 2011 Statement

“There are only a handful of exchanges with between 40-50 per cent of cabinets enabled, and that in many of these cases this equates to actual coverage of up to 70 per cent of homes and businesses in an exchange area. In the roll-out overall, on average well over 70 per cent of cabinets are enabled within each exchange area, covering, around 85% of homes and businesses.”

Issues like the one experienced by residents of Kingsway Village are by no means isolated and we’ve covered many more in our news. Even large chucks of the nation’s capital city, London, specifically in the South East corner, still have problems with broadband quality. Thankfully most of those should be improved by the end of 2012 but others won’t be so lucky.

It’s little wonder that only 4% of UK households have subscribed to a superfast service from either BT or Virgin Media (Ofcom’s June 2011 Data), which is despite around 60% being within reach of one. Uptake would perhaps improve if the major operators put a greater focus upon hooking up areas of poor urban, as well as rural, connectivity first instead those that already benefit from good service.

Government Intervention

The problems mentioned above might, at least in part, help to explain why the government launched a new £100m Urban Broadband Fund (UBF) at the end of last year (here). This will help to rollout “ultrafast” fibre optic based 80-100Mbps+ (Megabits per second) broadband services across ten UK “super-connected cities” over the next three years (full details), including the four capitals (Edinburgh, Belfast, Cardiff and London). A further £50m was also added in the 2012 Budget for “smaller cities“, although the details of that remain vague.

In theory, provided the money actually goes towards connecting up the digitally underserved parts of those cities, then it might actually do some good. The government has been careful to point out that its UBF will only be “used to provide coverage in areas where BT and Virgin Media will not go“, or services “beyond what the market will provide“.

Unfortunately focusing on just 10 cities won’t help everybody and others suggest that £100m wouldn’t be enough to do the job properly. Meanwhile the schemes opponents argue, perhaps correctly, that this is work the private sector could be doing by itself and, unlike the rural situation, should be solvable without public subsidy. It’s a fair point. Another point is that such funding often only benefits the largest players and risks stifling valid competition from smaller rivals (e.g. Hyperoptic , CityFibre Holdings , Geo etc.).

In conclusion there’s no doubt that rural areas, which have a significantly smaller and more dispersed population over a much wider geographical area, need the most support. But at the same time we must not forget that poor connectivity does affect large populations in densely packed urban towns and cities too.