Rural Shops Alliance in Urban Broadband Funding Moan to UK Government

The Rural Shops Alliance (RSA), a trade association that claims to represent over 8,000 rural retailers across the United Kingdom, has described the Government’s city-focused Connection Voucher scheme as “bizarre” for “subsidising businesses which already have the potential to access superfast broadband“.

The Connection Vouchers scheme offers grants worth between £200 and £3,000 to help SME businesses install a superfast broadband (30Mbps+) service, although it’s only available for use in 22 cities across the United Kingdom and has so far seen fairly limited uptake (here and here).

But in a new statement the RSA said that hundreds of thousands of rural businesses could only “raise a wry smile” about the scheme because many of them still exist in areas with poor broadband connectivity and have “no idea if and when they are going to be upgraded to a decent speed“.

RSA Statement

“Much of rural Britain still depends for its Internet connection on a copper wire, insulated from its neighbour by thin paper and surrounded by a lead sheath to keep water out – 1950s technology. There are millions of small businesses based in rural Britain, including thousands of rural shops, many without access to decent broadband speeds and reliability.

It seems totally unfair that the government is giving their urban counterparts an even greater head start when it comes to electronic communications than they currently enjoy. If money is available, then it should be spent on accelerating the provision of a decent broadband speed to the entire country, rather than subsidising urban businesses to do something that is in their best financial interests to carry out anyway without the grant.”

The criticism is easy to understand and even Europe drew concern with the issue of using state aid funding to help urban areas, where the private sector is generally expected to cope. Indeed the original plan was for around £100m of the related Urban Broadband Funding (“Super-Connected Cities“) to be used on general rather than business-specific infrastructure upgrades, although this later morphed into the current voucher scheme after the EU warned of a lengthy competition review to help overcome their concerns (here).

On the other hand it’s also true to say that such market failure is not isolated to rural areas and there are in fact vast swathes of some cities that continue to suffer from poor broadband speeds due to similar infrastructure problems and costly upgrade requirements, which in a fair few cases can easily rival the worst rural performance gripes. For example, when several millionaire residents of the One Hyde Park development in bustling Knightsbridge (London) moved in earlier this year they found only slow ADSL access due to the prevalence of Exchange Only Lines (here).

At the same time we hope that many of these issues will be resolved in time for the end of 2017, when the Government expects to have made speeds of at least 24Mbps available to 95% of the United Kingdom. Never the less many of the leftovers in that final 5% are likely to be in rural rather than urban areas.