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Scotland Seeks to Improve Broadband Speeds and Bridge Funding Gap

Posted: 07th Oct, 2009 By: MarkJ
The Highlands and Islands Enterprise (HIE) has just published a new report that seeks to bring improved broadband services to the entire region. The report examines the infrastructure that will be required and the cost to deliver it, with estimates indicating that it will cost around £81m to deploy 'Fibre to the Cabinet' ( FTTC ) broadband (up to 40Mbps) right across the Highlands and Islands, and £480m to deliver true fibre connectivity directly to households and businesses.

The report identifies a staged development of provision in the region. There is already a high level of availability and HIE’s priorities are to help broadband users achieve improved speeds - in line with the ‘Digital Britain’ commitments (i.e. minimum speeds of 2Mbps must be available to everybody by 2012), as well as supporting the roll out of Mobile Broadband (3G) and the infrastructure needed for next generation broadband.

Alex Paterson, HIE director of regional competitiveness, said:

"Technology is so important to our economy that it underpins almost everything HIE is trying to achieve. There has been considerable public sector funding put into overcoming the challenges of connecting services, businesses and individuals in the Highlands and Islands. The role of the Internet and mobile technology is increasingly pivotal in everything from education, to supporting health care services, to opening up new markets to business, and nowhere are the benefits felt more keenly than in remote and rural areas."

Presently only six of the 384 exchanges in the region have been unbundled ( LLU ) to provide 'up to' 24Mbps ADSL2+ broadband services, but this covers approximately 20% of premises. The vast majority of phone lines in the Highlands and Islands are connected to ADSL exchanges which offer 'up to' 8Mbps services.

There are over 80 exchanges, covering only 3% of premises, which provide broadband using Exchange Activate (EA) technology. With Exchange Activate, connection speed is limited to a measly 500Kbps (0.5Mbps) and the number of active connections available in a given exchange is restricted. Likewise the choice of ISPs is also more restrictive at remote exchanges.

scotland broadband coverage by technology

The UK Government's ‘Digital Britain’ report recommends a 2Mbps universal service commitment (USC) for broadband by 2012, which will be delivered using a mix of technology solutions. However, the report estimates that 28% of phone lines in the Highlands and Islands are unable to receive broadband services at a speed of 2Mbps or greater, compared to 11% of the UK.

It's noted that there is extensive 2G coverage from four different mobile networks but limited 3G ( Mobile Broadband ) coverage outside Inverness, which suggests that plans to re-farm 2G spectrum for use by 3G services could offer big benefits. Satellite broadband services are also common in areas that cannot receive either fixed or mobile broadband services.

Alex Paterson continues:

"Local people are embracing these opportunities and the report shows that broadband take-up is higher here than for Scotland or the UK. The area has already had to think innovatively to tackle the issues surrounding connectivity and our next step, given the additional costs in rural areas, is to provide strong business and social arguments as to why we should be a priority for next generation access (NGA)."

Further estimates in HIE's report indicate that roll-out of NGA (e.g. FTTC) could be commercially viable for around 40% of Highlands and Islands premises because costs will be in line with those anticipated for other UK roll-outs. However, this leaves a funding gap which HIE wishes to see closed.

The funding gap for the remaining 60% of the Highlands and Islands is estimated to be £46m (with the private sector also investing around £22m assuming they invest at the same level per premises as in urban areas). As a comparison, public sector investment in providing basic broadband in the Highlands and Islands was £13.82m.

The report suggests that some of this funding gap should be provided by the 50p tax on all fixed phone lines proposed in Digital Britain. The analysis of likely impact indicates that it should be able to deliver FTTC to in excess of 90% of the UK, and 85% of the Highlands and Islands. To deliver NGA to the final 15% of the Highlands and Islands may require additional funding of around £24m.
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