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UPDATE Teesdale Valley Locals Angered by SHOCK Withdrawal of Broadband

Friday, February 20th, 2015 (2:20 pm) - Score 1,514
teesdale_valley

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.

Package Download Connection Fee Contract Monthly Fee by DD or SO
1 20 Mbps £575.00 12 Months £39.99
2 20 Mbps £475.00 24 Months £34.99
3 20 Mbps £375.00 36 Months £29.99

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.

Leave a Comment
19 Responses
  1. Avatar DTMark

    Well done to ITS Technology for persevering.

    However, the government don’t want you. BDUK don’t want you. They want BT. And they will shut you down in the end, one way or another.

    The sad conclusion is that this country is simply not interested in entrepreneurs like you and will spend public money making sure you go down.

    • Avatar FibreFred

      It’s easy but incorrect to blame Bt or anyone else for this, ITS bought a loss making network simple as… Nothing at all to do with Bt

    • Avatar DTMark

      I did not “blame BT”.

    • Avatar FibreFred

      I read your comments with that implication , the council aren’t shutting them down they don’t want to throw money (our money) at something that cannot sustain itself , just like the digital region network.

      It’s another sad tale but again shows how altnets can and do fail even with a reasonable pricing structure

    • Avatar Kevin

      It has failed because UK broadband who own the spectrum want it back, hence why they have hiked up the fee to get it back.

  2. Avatar Patrick Cosgrove

    Irrespective of how everyone got to where they are, isn’t the crux of the matter that BT is continuing to show two fingers to BDUK, PAC, Durham CC etc by refusing to divulge information that their own man (Sean Williams() has said they can release?

    • Avatar FibreFred

      And then what when you have the info throw money after bad to the other areas that Bt won’t cover ?

    • Avatar DTMark

      As I see it, BT has no duty to release anything to the public.

      Durham have contracted them, and so Durham should be in control of the situation and easily able to advise.

      Which then makes you wonder whose position – Durham’s, or BT’s – is the subservient one.

      Which then seems really odd if taxpayer’s money is involved, doesn’t it.

    • Avatar PaulC

      I think it is quite obvious who is the subservient one. If it were down to councils if they did or did not release information i can see no benefit for their constituents why they would not. The more choice for a consumer and the more business you area generates the better not only for people living there but obviously business and the council in general.

      That does not seem to be happening though so i can only assume its down to one party why coverage information is never forth coming.

  3. Avatar gerarda

    £19.99 is hardly “whopping” considering you don’t need a phone line.

  4. Avatar Jonus

    I come across many rural and even urban projects that fail due to poor customer take up, poor initial deployment and regulatory issues- odd that Teesdale appears to have all 3 elements going on.

    FibreFred is correct, ITS acquired a loss making network- you cant blame BT for that. Hats off as DTMark states, ITS could of walked away and switched off a loss making network but didn’t- all credit to them for not.

    Being forced to withdraw service due to aggressive and the greedy behaviour of UKB is dire and I don’t see what alternative ITS/ Comtek had.

    I have watched ITS with interest over the years and they seem a well organised ALTNET with a rapidly growing client base. Having stated they will invested £250k of their own cash to provide an alternative ( which appears to be much better than the previous solution) is noble move. I feel the residents and local council should be thankful ITS are prepared to stick with the area when all others have failed or refused to support. Well done ITS- lets hope the min 50 ( which does seem low and shouldn’t be hard to achieve)subscribers come forward and take advantage of the offer. I know other communities would give their right arm for such an offer as they are neglected by BT, etc.

    • Avatar fastman2

      jonus have these villages looked at self funding via openreach (assuming the exchange is enabled or expected to be enabled under BDUK – See openreach FAQ’s

  5. Avatar 3G Infinity

    12,000 homes passed under a fibre led approach would be a 12m to 24m investment, assuming a 1,000 min per home passed dig plus the equipment and core network and people cost.

    I have been here before many a time with wireless networks, mainly in Wales with/without Welsh Assembly and County Council assistance. Everytime the ‘total investment’ made it a very difficult ask, while wireless can be cost efficient, eg 50 homes in a village or area when you jump to several thousand homes it becomes a carrier grade network and that does mean a large upfront capital outlay.

    Also as a wireless provider, do not underestimate the length of time and cost it takes to put up just a single tower, let alone many.

  6. Avatar ISPBob

    UK Broadband have done this to everyone who uses their radio spectrum. It is partly the reason why NBW and other, smaller WISPS have failed. They offer the spectrum they have to a 3rd party who goes a solves a problem with it, then they revoke the license and approach the council directly. An interesting strategy, that has so far seen them leave a trail of devastation in the last decade. Perhaps when their relish product falls flat, the funding will finally be withdrawn and the spectrum will end us with someone who can use it.

    • Avatar 3G Infinity

      I guess you have evidence that is the case?

    • Avatar Jonus

      Here Here ISP Bob- lots of casualties in the space.

      Relish is failing- I dont see and here from several folks around the space that the service is poor and the adoption levels even worst. The companies approach is arrogant ( maybe a parent- child trait) and this is what is actually at the root cause of their of progress as vendors and potential partners/ site share providers (mainly roof tops) and the wholesale network providers (some in the Alt Net space) are not going to help Relish in anyway ( cant blame them really)

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