UPDATE Teesdale Valley Locals Angered by SHOCK Withdrawal of Broadband

Last year’s effort by the ITS Technology Group to save a struggling fixed wireless broadband network (Digital Teesdale), which was serving fixed wireless broadband to homes across rural parts of the Teesdale valley (east of the Pennines in England), appears to have stumbled after a hike in the spectrum licence made the service economically unviable.

The original project, which stemmed from a 2010 partnership of local businesses, residents and government agencies (here), chose Networks by Wireless (NbW) to build a WiMAX based fixed wireless broadband network that could theoretically cater for up to 12,000 homes and 1,000 commercial premises (some estimates put the cost of all this at up to £500k).

Locals who received the service were originally promised Internet download speeds of up to 20Mbps, although in the end NbW’s service could only deliver up to 8Mbps. But for a lot of people this was still an improvement, not least because sizeable portions live in some very remote areas where even BT’s basic ADSL connectivity struggles to function.

Residential packages on the NbW service started at £19.99 per month (plus £50 installation) for a bog standard 2Mbps connection, which increased to a whopping £51.99 for 8Mbps. Sadly NbW struggled to make enough money in order to be self-sufficient and in 2014 ended up going into administration (this is partly why councils remain nervous about investing in altnets).

Thankfully the ITS Technology Group intervened and put its own money on the table, alongside a promise that they and Comtek were “completely committed to not only sustaining the rural broadband service across this Dale, but also to continually improving and building on it” (here).

But this week locals informed ISPreview.co.uk that ITS and Comtek had sent them a worrying new letter, which stated that their broadband service would be “disrupted and disconnected in the next 30 days“. The problem appears to stem from an alleged hike in the related spectrum licence fee, which is owned by UK Broadband Ltd. (PCCW), although UKB denies this and states that their contract with NbW actually ended in December 2013.

Nicholas James, CEO of UK Broadband, told ISPreview.co.uk:

“At UK Broadband, we are committed to delivering high quality of service wireless broadband for customers across the UK. Following a mutual agreement to terminate the Teesdale contract with Networks by Wireless in December 2013, we received a letter confirming that they had turned off the network in service. At the end of last year, we were surprised to find out that UK Broadband’s spectrum was still being used, almost a year later. It also would have been impossible for UK Broadband to increase charges to ITS as we have never had a contract with them.”

As one Teesdale local told us, “It seems that UK broadband has asked silly money for the frequency licence renewal as they believe they can make much more from potential future 4G network expansion“. Meanwhile ITS claims that the switch-off is beyond their control.

FAQ Letter Extract

Why has ITS been forced to switch the Network off?
The network, that was built by Networks by Wireless and funded by Durham County Council, operates on a licensed frequency. This licence was granted by UK Broadband, but as it is licensed there is an associated cost. When ITS bought the network from Networks by Wireless last year, it was already running at a loss, and unfortunately a recent price increase of the licensed frequency makes the network, and the services that run over it, commercially unviable.

As the Council contributed funds to the original build of the Network, can it not support it now?
No, we have approached Durham County Council to explore the options, however due to the contract it has with BT for the Digital Durham roll out, it would not be able to contribute anything until BT declares where its service will not reach. This could be as late as 2018.

Regular readers of ISPreview.co.uk will be all too familiar with the catch-22 issue of unconfirmed coverage commitments in the Broadband Delivery UK linked contracts between BT and local authorities, which has also caused other projects to stumble in different ways, although in this case it’s disappointing to see that the council couldn’t make an exception for the existing network.

Mercifully ITS has promised to solve the problem itself and we understand that the company is committing £250,000 of its own money to build a new network. Meanwhile customers who can’t wait for this are being offered a choice of Satellite broadband, which is far from ideal.

Roy Shelton, CEO of ITS Technology, told ISPreview.co.uk:

“We are totally committed to investing substantial resources in to delivering a cost effective and robust service to the residents and businesses of Teesdale. ITS acquired a loss making network following its acquisition of Networks by Wireless Limited when it entered administration last year.

Our team has worked hard to find an alternative solution which will surpass previously available services in the area and those that mean that we are not at the mercy of third parties.

Having been legally forced to shut the existing network down, we are not prepared to leave hundreds of users without service. Therefore the investment we have earmarked for the new network will ensure users can enjoy access to services supported by our local partner Comtek.”

According to ITS, the new network will offer speeds starting at 20Mbps and going up to 50Mbps, which will all be delivered via wireless. At this point you might think that the local population would be happy to have a replacement solution, except there are a couple of problems with the new service.

Firstly, ITS are understandably adopting a demand-led approach and that means they need a minimum of 50 residents to sign-up for the service before the building can start. Secondly, the new packages aren’t exactly cheap (particularly if anybody opts for an expensive stop-gap Satellite connection in the interim) and the letter suggests that these are all +vat and not inc. vat prices.

ITS and Comtek are now asking those affected to contact their neighbours in order to help drum up support for the new network. Naturally locals are frustrated that all of the investment which went into building the old infrastructure may now have been wasted, although at a time when many such communities are still waiting for better connectivity then at least Teesdale has an option on the table.. many others do not. Better yet it’s all private and not public money that will be used.

UPDATE 24th February 2015

The boss of UK Broadband Ltd. has informed ISPreview.co.uk that their original agreement with NbW was mutually terminated all the way back in December 2013 and so they were understandably surprised to find that the spectrum was still in use. Added comment above.