Home
 » ISP News » 
Sponsored

South Yorkshire UK Digital Region Network Costing £70m to Close

Monday, June 30th, 2014 (8:01 am) - Score 611
digital region south yorkshire uk

A new report has claimed that the controversial publicly funded Digital Region broadband network in South Yorkshire (England), which last year collapsed under its own debt pile after failing to attract enough customers (here) and which is now due to close in mid-August 2014 (here), could end up costing £70m to shut down completely.

The network itself, which was setup in 2006/7 as an alternative to BT’s dated local ADSL infrastructure, initially cost £100m to build and aimed to attract 100,000 subscribers. However, despite covering 80% of South Yorkshire with FTTC connectivity, it was only ever able to attract 3,000 subscribers due to a combination of poor advertising, a failure to attract any big name ISPs and BT’s deployment of better connectivity in some of the same areas.

As a result of all this the local authorities (Barnsley, Doncaster, Rotherham and Sheffield councils) ended up having to pump around £10m each year of additional public funding into the network just to keep it afloat, which they did initially in the hope that new management could turn it all around. But sadly this never happened and in the end the current Government’s Business Minister, Michael Fallon, suggested it be scrapped (here).

Michael Fallon said last year:

[You] wanted to know why we are having to spend £45 million clearing up this mess. The answer is simple. We now have to assume all the liabilities of Yorkshire Forward, the regional development agency that signed up to this nonsense. As it was 50% of the cost, we will have to provide at least 45% of the funding, including a significant proportion of the repayment of the European regional development fund grant of £27 million, which rightly has to be paid back to Brussels, because the original conditions were not fulfilled.

We have to pay, as a 50% shareholder, our proportion of the contract due to the original operator, which has now been suspended, even though the terms agreed by Yorkshire Forward and the four councils with that original operator were hopelessly inadequate, in that they did not transfer any income risk whatever to the operator.”

Now a new report in The Star suggests that, when you factor in the EU repayment and public money needed to close the network (including the payments for keeping it afloat until now), the entire project will effectively have cost £70 million to shutdown (note: we think £70m sounds about £10-20m too high but it’s not clear how the Newspaper did its sums). A spokeswoman for the local authorities added: “In line with European Union regulations, between £13 million and £14 million of ERDF funding will be repaid.” Suffice to say, the money could have gone a lot further had it been used in a more intelligent and demand-led way.

Meanwhile we’re still waiting to hear whether there has been any progress on the Government’s proposed £10m+ Broadband Delivery UK (BDUK) scheme, which would most likely work alongside BT to make superfast broadband (FTTC) available to around 90% or more of the region (here).

But the councils have linked this proposal into their on-going attempts to sell off DRL’s assets, which still hasn’t made much progress. In a statement last year they said: “However, as this is linked to Digital Region Ltd, the future of which is yet to be decided, we are unable to comment on the plans at the moment.”

Add to Diigo
Mark Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
Leave a Comment
0 Responses

Comments are closed.

Comments RSS Feed

Javascript must be enabled to post (most browsers do this automatically)

Privacy Notice: Please note that news comments are anonymous, which means that we do NOT require you to enter any real personal details to post a message. By clicking to submit a post you agree to storing your comment content, display name, IP, email and / or website details in our database, for as long as the post remains live.

Only the submitted name and comment will be displayed in public, while the rest will be kept private (we will never share this outside of ISPreview, regardless of whether the data is real or fake). This comment system uses submitted IP, email and website address data to spot abuse and spammers. All data is transferred via an encrypted (https secure) session.

NOTE 1: Sometimes your comment might not appear immediately due to site cache (this is cleared every few hours) or it may be caught by automated moderation / anti-spam.

NOTE 2: Comments that break our rules, spam, troll or post via known fake IP/proxy servers may be blocked or removed.
Cheapest Superfast ISPs
  • Hyperoptic £18.00 (*22.00)
    Avg. Speed 30Mbps, Unlimited
    Gift: Code: SPRING19
  • Vodafone £21.00 (*23.00)
    Avg. Speed 35Mbps, Unlimited
    Gift: None
  • TalkTalk £22.50
    Avg. Speed 36Mbps, Unlimited
    Gift: None
  • Direct Save Telecom £22.95 (*29.95)
    Avg. Speed 35Mbps, Unlimited
    Gift: None
  • SSE £23.00 (*33.00)
    Avg. Speed 35Mbps, Unlimited (FUP)
    Gift: None
Prices inc. Line Rental | View All
The Top 20 Category Tags
  1. BT (2367)
  2. FTTP (1917)
  3. FTTC (1567)
  4. Broadband Delivery UK (1529)
  5. Politics (1305)
  6. Openreach (1304)
  7. Business (1151)
  8. Statistics (1017)
  9. Mobile Broadband (942)
  10. FTTH (925)
  11. Fibre Optic (924)
  12. Ofcom Regulation (857)
  13. Wireless Internet (851)
  14. 4G (822)
  15. Virgin Media (788)
  16. Sky Broadband (565)
  17. TalkTalk (545)
  18. EE (538)
  19. Vodafone (452)
  20. Security (387)
New Forum Topics
Promotion
Helpful ISP Guides and Tips
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
Sponsored

Copyright © 1999 to Present - ISPreview.co.uk - All Rights Reserved - Terms , Privacy and Cookie Policy , Links , Website Rules , Contact