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An Independent Scotland Could Result in Higher Broadband Prices

Tuesday, November 6th, 2012 (1:29 pm) by Mark Jackson (Score 1,184)
scotland uk regions map

The debate over whether or not Scotland should become independent from the United Kingdom is generally marred by political division, which often overlooks some of the more technical and economic questions; such as what happens to the cost and speed of broadband in Scotland, England, N.Ireland and Wales if the former separates?

It’s a question we’ve been examining ourselves for a while. A question that initially seems straightforward to answer but quickly becomes incredibly complicated to fathom in its entirety. So far none of the ISPs we’ve asked about this, including some of the big boys like BT and Virgin Media, appear to have an answer. Yet.

At its core is a problem that Scotland shares with Wales. The vast majority of Scotland’s territory is predominantly rural and thus costly to maintain for the delivery of BT’s traditional fixed line broadband services; Virgin Media is largely focused upon urban areas and thus less likely to be affected, at least not to the same extreme.

In theory this suggests that an independent Scotland could see higher prices for broadband and phone services, while England and Wales might conceivably benefit from slightly cheaper and comparatively faster options. Entanet’s Head of Marketing, Darren Farnden, has today waded into the debate and offered an ISPs viewpoint on the subject. But equally they’re no closer to having the answers.

Darren Farnden said:

Another point for consideration is the cost of broadband. We have already stated that Scotland’s hard to reach areas have resulted in slow speeds or a lack of service altogether. This often means that technologies such as satellite broadband have to be used as fixed line services simply aren’t viable. However, satellite services are usually more expensive for the end user. Add to this the fact that our experience shows Scottish based urban users tend to consume more bandwidth than English users and such services could be very costly.

Will such factors mean that English based providers will increase the cost of supplying broadband services in Scotland, pushing up the price for Scottish residents? Will this then have a knock on effect for customers in Northern Ireland as many of the key undersea fibre is connected via Scotland? On the other hand will Scottish based ISPs and resellers benefit from an opportunity to compete against their English counter parts?”

Farnden notes that “at this stage it’s all just speculation” and indeed we don’t even know if Scotland will vote to become independent. But if it does then how would UK ISPs need to change their structure? Would Ofcom’s rules differ between north and south of the border? Would Ofcom simply cease to exist in Scotland? What about the impact on mobile services? You start with a simple question and soon end up with 1,000 more.

Whatever the outcome, Scotland will get the chance to decide in 2014, when a referendum is held to decide the country’s future. So far the focus has been on the political and economic side of the debate, with zero attention being given to how it might impact broadband and mobile services, not to mention other complicated industries.

We don’t envy Scottish voters, especially when the answers to some of the biggest questions won’t necessarily become clear until after the vote is taken. Leaving the development of a new telecoms structure until after the vote means that people won’t really know what they’re getting, which we suppose is much like any general election.. only much more dangerous.

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9 Responses
  1. Have to admit I really do not see the problem here. Yes it might be a separate country post independence, but the underlying costs should not change. At least not unless they decide to adopt the Euro rather than the pound.

    If I was one of the big ISPs I would make a marketing point that “our prices are standard across the mainland” or some such gumf.

    Having said that, I dare say that any excuse by the big boys to increase prices would be taken – though as usual this will probably be in the “line rental” rather than the “broadband” prices.

    • The underlying costs would only stay the same if the UK national model that we have today remains the same, although post-independence Scotland would obviously become a separate country and nobody knows quite how this will be handled.

      BT might, for example, separate out its Scottish division and re-balance their prices accordingly. Indeed you can imagine that it wouldn’t take long for English and Welsh people to cry foul if they felt that they were paying extra to help subsidies lower prices in a now independent Scotland.

      The point is it’s complicated and there’s a big question mark that’s in desperate need of answers. I think it would be wrong to assume that everything will stay the same though as that’s not how commercial businesses work, they look for opportunities and exploit them.

    • Bob

      The costs change drmaticaly as much of the Scottish telecoms network relies on heavy subsidies from WEstminster

  2. Bob

    THe otherside of the coin of course is that there would be a small drop in prices in the rest of the UK

  3. Deduction

    They will rip off England with oil and we will rip them off with broadband, only difference is scots will whinge about it 😉

    • Bob

      Most of the oil is not actually in what could be regarded as Scottish water. It is in International waters. In fact some is nearer Norway than Scotland.

      The oil in International waters is coverded by a mineral exploration agreement between the EU & the UK. THe EU is looking to try to change legislation so that the oil in International waters belongs to the EU rather than a specific country

      THe mineral eploration legislation is a bit of a minefield

  4. Colin

    Bob you clearly know nothing. The gas and oil on the west of Scotland is marked as Scottish waters regardless to which county it is nearer too.

    And your other point that Westminster subsidises Scotland is also a joke in the past 30 years Scotland has a 30bn surplus. We scots are paying English debt FACT.

    Back to the point of the subject, I can see development and rollout being more expensive due to the highlands however ISP will only provide adsl to these areas to stuck to the eu remit of 2mbps. Development of the more expensive fibre will only be kept to urban areas. Either way it will be years before we know what will happen.

  5. Alan

    The word ‘Could’ is very prominent in the headline. The Sky ‘could’ fall down if Scotland became independent. Not very likely, but it ‘could’.

  6. ted

    I seem to remember the sky “could” fall in if the scots voted for devolution…it never happened.

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