UPDATE FSB Claim Half of Rural Small Businesses Dissatisfied with Broadband

The Federation of Small Businesses (FSB) has today warned of a “two-speed digital economy” after it published the results of new research, which found that 49% of rural small businesses are dissatisfied with the quality of their broadband service and this falls away significantly to just 28% for similar firms based in urban areas.

The results are perhaps unsurprising given that most rural areas are still waiting to benefit from an upgrade via the Government’s on-going Broadband Delivery UK programme, which aims to make fixed line “superfast broadband” (24Mbps+) speeds available to 95% of the population by 2017 (the rest are being promised speeds of at least 2Mbps).

In the meantime many such rural locations are left to suffer from long copper or aluminium based ADSL (up to 8Mbps) and ADSL2+ (up to 20/24Mbps) lines, which tend to be both slow and much more unreliable than more modern fixed-line or fixed-wireless connectivity methods (e.g. FTTH, FTTC, Cable DOCSIS etc.).

The FSB’s study, which is based off 1,400 responses from members of their “Big Voice” Research Community Panel in December 2014 (this is a survey forum for small firms that was setup late last year), also warned that the issue is predicted to become even “more significant over the next two years” as small firms will ultimately become more reliant on a high quality broadband connection to do business. Bad luck if you can’t get one then.

According to the results, more than three quarters (77%) said that email will be critical to their business and more than half (57%) said broadband will be essential to engaging with their customers in the next two years. The FSB’s research also categorises rural business dissatisfaction across a number of areas, including reliability (47% dissatisfied), upload speed (61%) and download speed (61%). This represents nearly a 50% gap in reported satisfaction levels with comparable urban businesses.

Mike Cherry, National Policy Chairman for the FSB, said:

“This research paints a worrying picture of a divided business broadband landscape in the UK, and unless addressed highlights a clear obstacle to growth in the coming years. We risk seeing the emergence of a two-speed online economy resulting from poor rural broadband infrastructure.

It’s worrying that as many as 14 per cent of UK small firms still view the lack of a reliable broadband connection as being the primary barrier to their growth. A reliable connection is now viewed as a key business requirement by 94 per cent of small UK businesses, yet continued poor connectivity in rural areas represents a huge missed opportunity for economic growth in many parts of the country.”

Naturally the FSB has once again used this opportunity to press their previous demands, which call for a minimum broadband speed of 10Mbps to be supplied to all business premises by 2018/19, and a pledge to deliver minimum speeds of 100Mbps to all by 2030. Ofcom has similarly suggested, on several occasions, that the 2Mbps Universal Service Commitment (USC) could be lifted to 10Mbps (here), but so far the Government has chosen not to respond.

As usual it’s easy to think up a number and plonk it onto a piece of paper, albeit much more difficult to show how that could actually be achieved in a practical and economic sense. Never the less time has moved on since 2Mbps was first mooted for the USC some 5-6 years ago and these days it’s already looking a bit weak for modern requirements.

Personally we’re starting to think that it might be better to centralise everything around a 30Mbps+ USC and then peg 2Mbps for a legally-binding USO by 2020. Admittedly this might push some consumer prices up, but once BDUK’s work is complete then the cost increase shouldn’t be a huge one and its benefits may ultimately outweigh any negatives.

UPDATE 4:23pm

The boss of business ISP Fluidata has added a comment.

Piers Daniell, MD of Fluidata, told ISPreview.co.uk:

“It is BT’s telephone infrastructure that is holding back the government targets, as this is what the 24 Mb/s delivery is based on. However, many businesses find 100 Mb/s insufficient so we do need to be aiming higher. This is where wireless and fibre come in as speeds of 1Gb/s can be achieved.

The cost of delivering in rural areas are higher which is why BT isn’t investing in them. We have been working with a large number of alternative providers who are using alternative methods to deliver speeds of 1Gb/s to businesses in rural areas. By digging their own fibre, installing masts or even running services through other pipes, like CCTV infrastructure, they are able to deliver services in a cost effective manner to these hard to reach locations.

What we need is the government to recognise this ability and support it so our rural businesses see the benefit.”