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AAISP Fears Broadband Too Costly for ISPs in an Independent Scotland

Tuesday, August 26th, 2014 (2:59 pm) - Score 1,014

The boss of bracknell-based ISP Andrews & Arnold (AAISP), Adrian Kennard, has waded into the heated debate over Scottish independence by warning that some smaller broadband ISPs based in the rest of the United Kingdom might “simply cut off Scotland” because of higher costs. As our Scottish cousins might say, “a nod’s as guid as a wink tae a blind horse“.

After years of rising political division the debate over whether or not Scotland should become independent from the United Kingdom is finally due to be decided in a referendum on 18th September 2014. In the meantime many people, on all sides of the divide, are still unsure about precisely what independence will truly mean.

ISPreview.co.uk has previously explored some of the biggest question marks (here), albeit from the perspective of broadband provision and its related regulatory requirements. Unfortunately we’re still no closer to knowing precisely how an independent Scotland would work on the telecoms front and the Scottish Government’s recent attempts to clarify has done little to help (here).

Now AAISP’s outspoken Managing Director, Adrian Kennard, has warned that smaller ISPs could potentially end up becoming a casualty of the split.

Adrian Kennard said:

We don’t currently offer services to people in other countries. We are simply not set up to do that [and] trading with a different county has a lot of possible implications.

• We may have to be VAT registered in that country, and collect and pay VAT to their VAT office.
• We may have to pay corporation tax to that county.
• We may have to do currency exchange on payments.
• We may have to pay surcharges on international bank payments even if in same currency.
• The legal implications if someone did not pay, and how we would sue them, could get a lot more complex.
• We may have to be part of that countries ADR scheme.
• We may have to deal with their telecoms regulator.
• Shipping routers may cost a lot more and may involve customs.

Broadband is not a high margin business at the best of times, and all of this extra burden is a cost that may mean it is simply not viable for a small ISP to bother.

Kennard admits that, due to a familiar lack of detail, he “can’t say for sure what would happen” in the event of a split. On the upside he does believe that, from a simple engineering point of view, not much would change with regards to the ISPs relationship with infrastructure providers (except maybe for costs).

But Kennard also suggests that the extra admin and costs associated with catering for a separate country could mean that some ISPs based in England “would simply cut off Scotland, just because of simple commercial common sense“. Other ISPs, such as Entanet, have expressed similar fears and warned of the potential for higher prices rather than a cut-off. Optimism for independence is hard to find among ISPs.

On the other hand independence could, if given enough time, result in more ISPs being setup to specifically cater for Scotland (i.e. replacing those that are lost) and there may even be some benefits in other areas like regulation. As usual though, nobody has a firm answer because the issues are so tricky to navigate and many of the decisions may only be properly discussed after next month’s result is known; although we might equally be able to move on from this debate completely.

As the translation of that opening phrase would say, explain yourself properly and make your meaning clear. If only it were possible.

Leave a Comment
24 Responses
  1. Avatar Ignitionnet says:

    Cue the accusations from the ‘Yes’ camp’s cyber-warriors that Adrian is ‘bullying’ in t-minus 5…4…

    1. Avatar Bob2002 says:

      Cybernats are awful, wonder what they’ll do if the polls stay they same (as they always have been) and the No vote wins?

    2. Avatar Bob Johnston says:

      Seems the NO warriors have already arrived…

  2. Avatar DTMark says:

    .. How about if a Scottish ISP chooses to use BT, a UK based and therefore would-be foreign company, to supply the circuit to the end user..

    1. Avatar Ignitionnet says:

      BT would have to have a separate Scottish subsidiary, Mark, as they do an Irish one.

  3. Avatar Raindrops says:

    He has a few good points but some of them are a touch alarmist. I highly doubt there would be a different regulator and i highly doubt the “Shipping routers may cost a lot more and may involve customs.” point as just 2 examples.

    In fact the shipping things to Scotland, Ireland etc right now can vary depending on what courier you use. Some online retailers already will not ship to Scottish highlands or Ireland due to costs already, or charge significantly more for the shipping already.

    I frankly doubt Scotland will vote YES anyway, mainly because like anything political there is little detail and fact but plenty of spin, people generally do not like the unknown. Like anything there will be positives and negatives if they do. If i were voting id actually probably take a punt on voting YES, the leadership the UK has had (no matter the party) for the last 20+ years has been totally inept. On the other hand id also be willing to run a mile if the new leadership suddenly thought it was some kind of superpower.

    1. Avatar X66yh says:

      If the Scots vote yes (unlikely IMO) I’d be waiting to see when the Shetland/Orkney Islands will want a vote to be separated from the mainland rule and be re-united with Norway as they once were before 1450ish- and to take all the oil fields with them.
      Now that would be fun to watch – from a distance

    2. Avatar New_Londoner says:

      @Raindrops
      A separate regulator is in fact quite probable in the event of a yes vote, with a range of different regulatory set ups for utilities and communications under discussion in Scotland at present. Most of these are quite different from the UK structures.

    3. Avatar TheSheepPimp says:

      @X66y

      I don’t think the locals of Orkney/Shetland ever asked to be annexed by the Vikings.

    4. Avatar Raindrops says:

      @Newlondoner Wales still use Ofcom why would Scotland be different?

  4. We can only but agree with AAISP.

    We are literally putting to bed our own statement following quite a few calls from Scottish customers, worried what will happen. Everything AAISP listed, we also drew up, apart from International BACS fees (as we don’t get charged those now ourselves). I will add to the list that preparing separate company books/accounts also needs to be considered.

    We also dug into our customers usage, to find that Scottish customers use more usage than English, Welsh or Northern Irish customers, hence separation of business operations is likely to see an increase cost per month in Scotland for usage differences. Why usage is higher at present can’t be accounted for…too many variables.

    We have sat down with our chartered accountants and drawn up business plans, based on what we know (not accounting for VAT/Corp changes) and information obtained from HMRC and the Yes campaign. All plans seem to point to an increase, as much as 30% higher than now for Scottish customers, with actually a fall in prices for other UK regions, due to the average of figures drawing down wholesale costs.

    As I say, we just concluding our bits for our customers and of course figures/projections are based on our commercial relationships which I won’t go into detail in a public forum, but I am sure a Yes vote is not going to help telecoms/data costs. We just have to weight up if doing business in Scotland costs more than revenues received.

    1. Avatar Gadget says:

      Martin – a bit tongue in cheek (and it could well be to cope with language) but potentially what would happen if Scotland’s official language was changed to Gaelic?

    2. @Gadget I think we highly struggle to support customers calling us…my Gaelic is not what is once was 😉

    3. Avatar adslmax says:

      AAISP – is far too costy! This one I avoid it!

    4. Avatar Steve Jones says:

      “We are literally putting to bed our own statement following quite a few calls from Scottish customers”

      I hope it’s nice and comfortable between the sheets.

      Literally is not an intensifier. It means “actually”.

      Not that I’m a pedant…

    5. Mark Jackson Mark Jackson says:

      A very easy mistake to make (done it lots of times myself) and in any case we all understood the meaning, while those who have a deeper interpretation of the grammar at work gained a giggle :).

    6. Avatar Steve Jones says:

      I find the misuse of literally particularly irritating as it is, literally, contradictory to the the figurative use of the verb in such examples. That it’s (apparently) been misused this way for a long time, sometimes by eminent writers, I find little consolation. It just brings out the Sheldon Cooper in me.

      My favourite example was when a spokesperson for a power company declared that they were dealing with a fire at a substation by “literally throwing engineers at it”. I always knew that electrical engineers had hazardous jobs, but that made me respect them even more.

    7. Avatar Raindrops says:

      Perhaps if the incorrect use of the odd word bothers you that much you should only read Shakespeare rather than an arena that is designed to be casual in its communication. You are not going to find written word perfection on an open to a world wide platform complete with various languages, quirks and misgivings.

      Oh, also a tip for the future. For quoted words which end with a full stop, the full stop goes inside the quotation marks. For quoted words that do not end with a full stop, then the full stop goes outside the quotation marks.

      Anyone can be a grammar Nazi on the web can’t they?

    8. Avatar MikeW says:

      Unfortunately, the figurative use of “literally” as emphasis would appear to be condoned by both the Oxford & Cambridge dictionaries. I guess if something is misused often enough, it becomes right.

      One day we’ll see a definition of fibre broadband in there… 😉

    9. Avatar Steve Jones says:

      @RAINDROPS

      Interesting that tip of yours. One question. Which quote did I make which definitely included a full stop? With the power company quote I cheated a little in that it’s from memory, as it was a few years ago. The phrase could very easily have been followed by a conjunction.

      Grammatical slips I don’t generally worry about. I often make those myself. For instance, I often find I’ve mistyped “it’s” for “its” or vice versa. I lose sleep over such mistakes. However, I think the misuse of some words, such as literally, is in a different category. They take something away from the language. As another example, I dislike the substitution of “alternative” with “alternate”, albeit I’m aware that Americans have formalised this usage, which, nevertheless, I think is unfortunate as the distinction is important.

    10. Avatar Steve Jones says:

      My compulsion to find the original has taken over, and this is the “throwing engineers” link. Or at least to a BBC report which references the announcement. The BBC’s quote did include a punctuation mark from the spokesperson’s (apparently verbal) statement, but it was a comma.

      http://news.bbc.co.uk/1/hi/england/west_midlands/5230032.stm

    11. Avatar Raindrops says:

      In either case you are wrong; you used a full stop in the statement about throwing engineers at fire.

      Your quote from Martin of Aquiss reference Scottish customers, http://www.ispreview.co.uk/index.php/2014/08/aaisp-fears-broadband-costly-isps-independent-scotland.html#comment-146971 is a bigger mistake. I have never heard of starting a new paragraph and not using a full stop before it.

      I repeat anyone can be a grammar Nazi. I suggest you move along or worry about your own written skills, rather than nit pick other peoples.

  5. Avatar Gadget says:

    just tell them they are “havering” 🙂

  6. Avatar Bo Selecta says:

    Lots of use of the word ‘may’ in there from Adrian.

    Nothing more than another example of him trying to get quoted in the media and get his company some coverage.

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