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Last 10% Uncertainty Still Hampering Investment in UK Rural Broadband

Posted Monday, June 17th, 2013 (9:50 am) by Mark Jackson (Score 700)
fibre optic rural broadband rollout uk

Broadband investment in the most rural and remote parts of the United Kingdom is still under threat due to a lack of clarity from local authorities concerning which areas constitute the last 10% of the country where BT and the government’s Broadband Delivery UK (BDUK) scheme have yet to help.

At present the £530m BDUK scheme aims to make superfast broadband (25Mbps+) ISP connectivity available to 90% of people in each local authority area by the end of 2015. However, contrary to a lot of the political spin, this more often than not refers to infill and expansion of existing FTTC/P technology in the suburbs of cities and large towns (i.e. most truly rural areas are shunned).

Indeed the most rural parts of the country actually exist in that final 10% or so, which won’t be covered by the BDUK scheme (at least not yet). This broadly represents areas where big commercial operators like BT would find too expensive to upgrade due to sparse populations making it harder to gain a return on the initial investment (commercially unviable).

The situation has long presented somewhat of a quandary for smaller ISPs (altnets), specifically those that want to focus on delivering faster broadband services to isolated areas where neither BT nor BDUK have shown much interest. The primary problem being, how do you identify which areas are within that final 10% when BT and BDUK prefer to protect related information (coverage and speeds) due to reasons of commercial confidentiality?

It’s vital to know which areas are likely to be in the final 10% because, as the Communications Minister (Ed Vaizey) said, “publicly-funded projects are prevented by the state aid rules from overbuilding other projects which have been notified at that point” (i.e. security for the ISPs investment). In reality this too has faced troubles, especially given the government’s controversially strict guidance for wireless networks (here).

According to Br0kenTeleph0n3, the Independent Networks Cooperative Association (INCA) have used the Freedom of Information Act (FoIA) to request related coverage and speed details from several local councils but all have been refused.

Malcolm Corbett, CEO of INCA, said:

Effectively it means that the locations that BT is being paid by the taxpayer to deliver to, along with those that are out of scope, are confidential … I can’t see why anyone would invest under these circumstances

The situation is also known to be impacting at least some of the projects that are bidding for a slice of the £20 million to be allocated through DEFRA’s Rural Community Broadband Fund (RCBF), which was specifically setup to help the final 10%. A difficult task when the lack of necessary information makes identifying that last 10% somewhat tricky, unless you’re BT of course.

Some of this is also the fault of the fact that local authorities can’t typically reveal more detailed coverage plans and maps until many months after the BDUK contracts have been signed (BTOpenreach need to conduct a proper engineer survey first). Smaller ISPs can at least gain a very rough idea of where they might be able to focus by looking at these roll-out maps, though they’re somewhat sparse on detail.

Perhaps another factor in all this could be precisely what the government’s plans are for the extra £300 million that will be set aside from the BBC TV Licence Fee to boost broadband funding between 2015 and 2017. The government intends this to go towards helping the final 10% but as yet they haven’t revealed a clear policy to support it.

However it should be said that a growing mix of smaller commercial or community funded projects, such as B4RN’s excellent work in Lancashire, have still managed to proceed without recourse to public funds by adopting a “just do it” attitude and making use of hard working locals to get the job done.

Meanwhile the National Audit Office (NAO), which works on behalf of Parliament to scrutinise public spending, is expected to publish a highly critical report into the value for money aspects of the government’s BDUK project next month (here). It will be interesting to see whether this covers any of the above concerns.

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7 Responses
  1. dragoneast

    If BT, as is the case, haven’t any competition in the BDUK process, how does their state-fund supported roll-out need the protection of commercial confidentiality (or frankly their commercial roll-out, either)? It seems just a knee-jerk mantra.

    • DTMark

      The “commercial” rollout versus the “State” rollout is hilarious.

      When a company is the only bidder and can be confident of 100% of the funding, there cannot be any meaningful separation.

    • MikeW

      Interesting that most counties have gone for the gap-funding commercial model, as you’d predict with the BDUK framework embodying this, based on the experience of the pilots.

      My understanding is that a gap-funded model leaves the commercial supplier with a commercial rollout of commercial equipment, that they have to supply a commercial service over, and continue to maintain identically to their commercial rollout. There is a commercial risk to the venture, and a commercial gain to be made in the process.

      With all that in mind, I can understand that the end result – for us, the man in the street – is a project that we don’t know the details for. The council will know enough to monitor the project, and to determine clawback, but that is all.

      Certainly, the counties could have chosen a different model, where they own the network, and take more risk for doing so (like Digital Region). I guess there are reasons they chose the model they did. Perhaps they got more coverage at less cost, in exchange for leaving commercial confidence in the hands of the supplier.

      They could have made a different choice (and the remaining counties still could).

  2. 3G Infinity

    Post 2015 spending, £300m, assumes the next government still wants to spend it or more cyncially this current government gets back in.

  3. 3G Infinity. I expect they’ll actually make an announcement before the next general election precisely to gain a political boost. But you’re right that it will be up to the next lot.

  4. MikeW

    Hear, hear Mark.

    Without publishing the portion that is in-scope, it is impossible to create a meaningful business plan for any community project. And that makes it impossible for any commercial partner, other than BT.

    I wonder if it is the same for North Yorkshire. The “lessons learned from the pilot project” mentions that they wanted an open access infrastructure that specifically allows for community hub interconnection.

    That suggests that they are more specifically open for community projects, but it doesn’t mean that tom,dick or harry can get access.

  5. MikeW

    I do believe there are a few reasons why BT may not want this published – which all boil back to one thing: They really do want to use this to keep a monopoly on the access network, even if it forces wholesale access…

    1. Cornwall recently changed targets from 80% to 95% with no increase in funding.
    Is it fair to believe that the BDUK projects can make some gain too? Perhaps not as high, as those savings will already be factored in to some extent. Can this squeeze another 2-3% out of the final 10%?

    2. Vectoring is likely to bring gains in range as well as in speed.
    Quite a few BDUK projects suggest coverage of 3%-6% that will get FTTC access, but not at SFBB speeds. Vectoring is likely to bring SFBB speeds to some of these, and in the 2017-2018 timeframe.

    3. Bonding is an unused technology within the BT network, as far as SFBB is concerned. Once vectoring is in place, can this help another few percent?

    4. FTTdp can make small cabinets a bit more feasible, in very small hamlets. This technology is likely to be on-stream in the 2017-2018 timeframe. Add in the fact that planning permission for overhead lines to such places will be relaxed at the time, this might make reaching such communities a little more viable, even if the node only performs VDSL2 instead of G.fast. Another couple of percent?

    FTTP and FOX will also play their part, but I suspect that these technologies list the main overall strategies for BT to meet the 2020 EU targets.

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