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Government to Start Rural Pilot of Free Broadband Satellite Subsidy

Wednesday, September 16th, 2015 (8:15 am) - Score 5,996
space satellite broadband spacecraft

As expected the Government has announced that they’re launching a pilot of their proposed subsidy (voucher) scheme to support the installation of “superfast” (24Mbps+) capable Satellite broadband services in remote rural areas, which will begin this month in Suffolk and West Yorkshire (England).

The idea was first officially touted as part of the original Budget 2015 (March) announcement (here), with the approach being that related vouchers would cover the cost of both the services installation (normally £100 to £150) and hardware (can be anything from £200 to £600), but you’d still have to pay for the monthly rental (from £24.99).

The subsidy scheme, which will be extended across the United Kingdom from December 2015, will typically only be available to remote parts of the country where the wider fixed-line focused Broadband Delivery UK programme has so far been unable to reach via BT or other upgrades.

At present BDUK is predominantly working with BT, as well as a small number of other ISPs (e.g. Gigaclear), to push superfast broadband connectivity out via fixed line services to 95% of the UK by 2017/18. Meanwhile a plan to reach the final 5% is due to be unveiled soon, although the Satellite subsidy is expected to focus upon the very last 1-2% of premises (alternative fixed line or wireless solutions may be used to fill the other 3% or so).

Ed Vaizey, Communications Minister, said (Telegraph):

More than 83pc of the UK can already access superfast speeds, and over the next two years we will reach 95pc of the country with superfast broadband. As superfast roll out progresses, we promised every home would be able to access speeds of at least two megabits per second by the end of this year. These pilot schemes are part of our commitment to delivering this.”

The subsidy scheme appears to be focused upon helping the Government to achieve their somewhat out-of-date Universal Service Commitment (USC), which aims to ensure that everybody can gain access to a broadband download speed of at least 2Mbps by 2016. Interestingly BDUK states that their USC has a total budget of £60m, which is possibly the first time that we’ve seen such a figure confirmed.

We say out-of-date because most reports, including Ofcom, now appear to support 10Mbps as a minimum speed and the USC has also historically always failed to factor in the importance of both upload speeds and latency to modern connections.

At the same time the non-binding USC seems to be in conflict with the “superfast” goal, particularly since Europe wants 100% to have access to 30Mbps by 2020. Not to mention the plan for reviewing whether or not he UK should adopt a legally binding USO of 5Mbps (this was also announced in the budget).

Apparently the subsidy scheme will be available from any one of four participating Satellite ISPs and at least one of those has promised a service that’s capable of 30Mbps, which will probably mirror the same product offered by Avonline as part of an earlier pilot in N.Ireland and Scotland (here).

In that pilot customers paid £24.99 per month to get 10Mbps (2Mbps upload) with a usage allowance of just 20GB and if you wanted the 30Mbps option (6Mbps uploads), complete with a 40GB allowance, then that actually increased to a hefty £49.99 per month.

However the Government will need to tread carefully here because Satellite solutions are not particularly well rated for service or support quality and many such platforms have a poor history of performance (example), often due to capacity constraints or excessive speed throttling (particularly at peak times).

The high cost of data is another hindrance, as are the poor latency times that make such connectivity useless for fast paced services like multiplayer gaming or mission critical financial trades (it doesn’t exactly help VPN or VoIP calls either). See our article – Satellite Might Not be the Best Fix. It’s a quick-fix, but as a long-term solution it’s much harder to sell.

On the other hand the cost of reaching many of those in that final 1-2% would be so disproportionately expensive that it quickly becomes a very challenging problem to resolve, particularly when the country is still sitting on a mountain of Government debt that in Q1 2015 stood at £1.56 trillion (paying off the annual interest on that alone costs £43bn). The economy might be growing, but it’s still a bit like balancing on a tightrope over a pit of the sharpest spikes.. one gust of wind is all it takes.

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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.
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30 Responses
  1. Avatar chris

    Instead of HS2 they should spend the money on getting fibre everywhere. Satellites are just a waste of money. FTTC is a waste. I am all for thrift, and making do and mending, but not when it costs a lot. The technology of the future is digital, not trains or second rate expensive networks. We could have the best.

    • Avatar AndrewH

      Totally agree. This is a daft idea.
      100% 30meg by 2020? Not a chance at this rate.
      The ever accelerating advance in tech is quickly going to leave this Government behind and they can’t see it.
      Right now? the best thing to do? Say sod it and just get FTTH to everyone with less than say, 15 meg. You can speed everyone else up later.
      Job done sorted!
      Seriously with 1.6 Trillion what difference is another 5 or so billion going to make.
      Plus you’d get it back much much more quickly because the likes of me trying to run an IT business with 1.7meg would actually be able to turn a bigger profit.
      The economy would grow way faster than it is.
      Trains can wait, get the fibre in already!!!

    • Avatar Al

      They could have done that with BDUK, and say right lets do the slowest most under invested areas first, but they went for number of people able to get FTTC/P first rather than bringing speeds of the slower areas.

  2. Avatar DTMark

    How does this apply to areas that are still ‘exploring solutions’, whatever that means – in our village, those connected to one cabinet can get VDSL, those connected to the other, cannot, and the majority of those can’t get 2Mbps including in time 85 brand new homes.

    When is it time to deliver the ‘good news’ – your neighbours can get maybe 10 to 15Mbps VDSL, but for you, it’s a satellite system – bearing in mind satellites are banned in much of this area since most of it is a Trust/Settled Estate.

    • Avatar fastman

      interesting about the new site assumed they just asked for voice — is there a new green box at entrance to estate — is developer on site suggest you get him to speak to openreach around funding a cab for the site and the remaining part of the village

    • Avatar David

      When are we going to stop unthinking acceptance (and thereby encouraging mindless belief in its accuracy)of the term “the last 5%”? The sad truth is that there’s a much larger percentage of users who live more than a few hundred yards from their upgraded street cab who can’t get “fit for purpose broadband”. But they’re all included in the stats of coverage and take-up for “superfast broadband. And it gets worse – those people served from an FTTC cab, but who are suffering 5Mbps or less because they are more than a few hundred metres from that cab, have zero hope of getting a better service in the foreseeable future. The government and BT have written them off because, you see, they already have “access” to superfast broadband. Job done! I bet the real figure is much nearer to 20% than it is to 5% – which might be why the policy-makers are still promoting a USC of only 2Mbps and the promised consultation on the USO is talking about 5Mbps. Any suggestion of mandatory higher speeds would probably cock up the existing rosy stats. The misrepresentation seems to serve the short-term purposes of King Copper and Whitehall politics – but it doesn’t serve the nation.

  3. Avatar Craski

    Geostationary satellites providing broadband are always going to be for a very specific market where absolutely no other alternative is financially viable.

    Low or Medium earth orbit satellites will improve latency and these may be viable options in years to come and by their very existence confirm that satellite broadband access via geostationary satellites is technology that will be obsolete in a few years time so why waste BDUK money on it.

    Use of satellite vouchers is a cop out to meet targets, thats why.

    • Geostationary satellites from Inmarsat Global Xpress for example are providing 50mbps.. So I’m not sure where you are getting your facts from and what your point is except to talk down satellite communications. My company has been providing satellite communications for a while now and demand through my company is increasing.

  4. Avatar Phil Coates

    I already use Satellite BB @£75 a month for 50Gb max download. Latency awful. Have never achieved 20Mbps down apart from the first month and frequently e.g. last Sunday it was running at half the speed of dial up all day.

    Apparently 27,000 homes will be offered this. Even at a conservative estimate of installation costs of £100 per property, its £2,700,000 down the pan, nevermind if the households can afford the monthly costs.

    • Avatar DTMark

      If the grant is for up to £600, then the cost of installation will most likely be.. £600.

      There will be uproar when this “solution” is extended to people in built-up city areas who for whatever reason cannot get a fixed-line connection above 2Mbps especially if their near immediate neighbour can get cable or VDSL.

    • Avatar Phil Coates


      So if uptake was 100% we are looking at £18,000,000 down the pan?

      Thats just obscene.

    • Avatar Craski

      Seems like the plan (if you can call it that) is that they offer the obsolete satellite service gambling on it that take-up will be low and then tick the box “Universal coverage done”.

    • Avatar TomD

      So that’s £18m allocated to satellite – presumably for the 1-2%.

      What’s the other £42m of the £60 million pot going to be spent on?

    • Avatar Craski

      If the UK has approx 25 million properties in it then 1% of UK will be 250,000 properties.
      If you call it a £60 million pot then at 250,000 properties then thats about £240 per property.

    • Avatar Craski

      If you think about it, BDUK has been criticized for targeting the easy areas first, many of which already had reasonable ADSL provision. If BDUK is hell bent on using satellite for final 1 or 2% and they have budget for it allocated, they may be thinking that rolling that out sooner rather than later gives them brownie points in addressing the slowest areas.

  5. Avatar Bill Lewis

    I find it odd that government miss out other “non fixed line” solutions and then leap to satellite.

    Although they mention Fixed Wireless, there seems zero inclusion within areas our business operates for this technology.

    In fact q

    • Avatar Bill Lewis

      oops.. continued , dropped the keyboard.

      In fact quite the opposite , Local authorities are using BDUK funds to target pre-existing FWA operator areas in deference to the many areas without it or any other choice.

      Satellite is a highly contended resource, adding 100’s of thousands more customers onto a non upgradable satellite is a recipe for disaster.

      Who wants online gaming or voip with ~1 second delay that fails completely in heavy rain.

      The existing per hour/day limits will only become more unworkable too.

      In some ways this is the best advert for Fixed Wireless yet, but unfortunately yet again millions will be squandered handing out free satellite first to find this out.

      The Fixed Wireless industry will then of course be expected as ever to pick up the mess out of its own budget, as it is doing now with failed FTTC roll out.


    • Avatar DTMark

      Curious that under BDUK rules, wireless provider must supply on a Wholesale basis and commit to “upgrade customers to fibre” (without specifying what that actually means in any great detail) whereas these requirements do not appear to apply to satellite.

      Of course, a sceptic might say that satellite is per-home and the provision in any area does not overlap BDUK’s preferred supplier in the same way that a wireless network would.

    • Avatar Hawkeye

      Because BDUK have supervised and guided an entirely proper and independent assessment process by Local Authorities (which hasn’t unfairly crowded out any fixed wireless operators at all) leading to state aided overbuild of fixed wireless operators’ areas, and because fixed wireless operators are not able to participate in 5Mbps+ USO infill voucher scheme (presumably because fixed wireless is not sufficiently inferior to qualify) the risk competition from fixed wireless to BDUK’s preferred supplier has been much reduced. Well done BDUK!

  6. Avatar Patrick Cosgrove

    What we need is a nationally costed solution for the remaining areas. The problem is that the immense sums of clawback money that will soon be flowing will be held by individual local authorities, some of whom may not need all of it. The question is whether they will be allowed to get away with using it for other activities or can it be pooled for a national approach.

    • Avatar Ivor

      If we were doing the entire thing properly, it would have been a nationally costed, full FTTP network (or as close to that as possible) – capable of truly futureproof, universal service. Ideally with a single owner-operator (and not necessarily BT).

      Would it cost a good chunk of money? Of course – but it’d provide truly national benefit no matter where you live, rather than vanity schemes like HS2. At least once it’s done, that should be it for a long time.

    • Avatar fastman

      ivor no case for FTTP any time soon — HS2 proven case

    • Avatar Ivor

      Apart from the fact that VDSL is a short term bodge, doesn’t provide universal service to anyone, doesn’t provide decent speeds to everyone, etc etc.

      The problem is that people (and BT) are looking at the short term only – VDSL is cheaper today, and that’s all that matters. It doesn’t matter if it won’t be futureproof, or even a good choice today.

      It’s also failing to take into account the cost savings later on – from not having to patch up and fix an aging, rotting copper network.

      Perhaps that’s why most other countries have gone for the approach of much more FTTP (including our neighbours to the west, Ireland), while we persist with utter rubbish like VDSL and satellite. Indeed, BT can and does do FTTP – mostly where VDSL absolutely won’t work, and partly where they feel like it. Cornwall is a case in point – there’s a lot of FTTP in the absolute middle of no where (no ROI there), and there’s a fair bit in more built up areas too (where there is nothing catastrophic that would have prevented a VDSL rollout).

      HS2 isn’t necessarily proven – it’s based on rather flimsy assumptions, but it will happen because politicians have decided it will.

    • Avatar Ivor

      I forgot to add that there’s an interesting point to make to compare the two.

      HS2 is being built as a high speed line because “it makes more sense than upgrading the existing line, and if we’re going to build a new line, we might as well build it properly – it would cost more to upgrade once it’s built”.

      Yet, for “superfast broadband”, the decision is the opposite – let’s do it as cheaply as we can, it doesn’t matter if we have to come back and spend even more money later with yet another bodge (G.FAST), or if it results in replacing one digital divide with another (those who can get crap VDSL speeds vs those who can get okay speeds vs those who can get FTTP or G.FAST). Why don’t we “build it properly” too and go with the initially more expensive technology that is futureproof and doesn’t need massive upgrades later?

    • Avatar FibreFred

      “The problem is that people (and BT) are looking at the short term only – VDSL is cheaper today, and that’s all that matters. ”

      No that’s not it, it isn’t all that matters, its about what can be delivered in a decent timescale with the money available. Could FTTP be rolled out everywhere (should the money exist) sure.. but it would take multiple decades to do during which time a lot of people will be left on ADSL1 or 2 or worse.

    • Avatar DTMark

      While this may not be entirely representative of BT’s successes, this thread nicely encapsulates what happens when BT tries to do serious broadband. In the end it appears to have taken 21 man hours to wire up two properties. VM would be in fits of giggles.


    • Avatar Ignition

      The business case for HS2 has been torn apart repeatedly. It doesn’t even come close to adding up 🙂

      The issues highlighted with FTTP installs are a good part of why BT are trialing FoD 2 using fibre with connectors pre-attached rather than needing splicing at the property.

    • Avatar Ivor

      It does not appear to take decades in other countries that have embarked on mass FTTP rollouts – so that argument’s out.

      As for cost – HS2 is going to cost up to £50bn, for a line that benefits only certain parts of the country. Truly national FTTP would likely cost a lot less.

      As for the TBB forum thread – it sounds like the installation mentioned is not necessarily typical or standard – since it’s talking about blowing fibre hundreds of metres to the home – “The fibre got stuck in the manifold which was quickly sorted then on it went to about 240 metres then stuck again”.

      I doubt most homes are in that situation (where the current end of the fibre is further than a few tens of metres at most – i.e. at the pole/pit), and a mass FTTP scheme would allow BT and its people to get the kinks worked out (pun not intended), processes streamlined, and things moved along much more quickly. But since it’s so niche, the experience isn’t there to do that

    • Avatar FibreFred

      Ivor name a country with a very similar make up to the UK, with the same mix of rural and urban and similar population that has rolled out fttp in less than decade’s

      …If the argument is out

  7. Avatar Craski

    At the moment current generation satellite broadband has very little to offer even modest users with combination of latency, cost, capacity and contention problems.

    I wonder if people would view it differently if the providers accepted that it is a compromised “solution” and marketed it as such.

    For example:-

    1. Dont offer 20Mbps download and then apply extreme throttling to meet demand. Surely it is far better from a customer satisfaction point of view to offer a lower headline speed (5 or 10Mbps) but maintain that speed consistently.

    2. Accept the technology has limitations with latency and price it accordingly. Dont try to hide the fact from less technically aware customers. Many dont understand this issue until its too late and they are locked into contracts.

    3. Provide data allowances that people can use at an affordable price. Many could possible accept the higher latency if the connection could provide decent amounts of data at affordable prices. Dont offer “unlimited data” subject to “fair use policy” and then only let me use that “unlimited data” between 0100 and 0500, what use is that for streaming TV services?

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