A BT plan to invest £1.5billion to invest £1.5 billion in “next generation” broadband infrastructure threatens to leave rural areas behind, writes Brian Wilson.
The telecom giant wants to replace a good portion of its current – and ageing – network with one that is fibre-based.
Users will gain connection speeds of up to 100Mbs, some five times faster than the very best on offer today mainly in urban centres.
It will apparently be capable of more. Growing competition in the telecoms sector, including from operators with cable and mobile networks, has caused BT to dig deep into its investment pocket.
But here’s the rural rub. Even such a large sum of money will buy BT a network that reaches 10 million UK households by 2012. In other words, around 15 million other households will not benefit.
Place your bets which side of the line most rural businesses and households will fall.
To be fair, the BT announcement says its aim is that "urban and rural areas alike will benefit from the investment". But it adds that "precise deployment will depend on the engagement of government and regional and local authorities".
It is doubtful whether BT expects public bodies to throw money at them, not least because it would likely fall foul of EU state aid rules.
But it may imply that the inclusion of rural areas in the roll out depends to a significant degree upon public bodies and service providers using their own requirement for broadband to guarantee a level of demand and make the investment worthwhile.
Been here before? Back in 2003-2004, along with a good number of others, I spent many hours in many meetings exploring how far broadband was likely to reach into rural areas and what policy options existed to address gaps on the rural map.
Quite a number of entrepreneurial rural communities started down the route of setting up their own local “community broadband” service – often with considerable success.
In the end, BT decided that demand for broadband was expanding fast enough that it would roll out provision of its ADSL network universally, except for a few isolated spots.
On one level the battle was won: rural businesses and communities finally had their broadband access. The downside was the collapse, as BT moved in, of many community broadband projects.
This is not simply to criticise BT. It acted in a perfectly rational way in an increasingly competitive telecoms market and has provided widespread coverage of first generation (ADSL) broadband.
Other main providers have been even more urban-focused.
It was always the case that today’s broadband was destined to become tomorrow’s narrowband, as demand grew and new ICT applications required ever greater capacity.
The question which few wanted to dwell upon was how to break out of the cycle where rural areas forever play catch-up with urban areas in receiving the latest generation of broadband?
Once ADSL went (almost) nationwide, policy makers were too quick to decide that the job was done and they could move on to other pressing issues.
For the community broadband sector the dilemma now is whether to do what they attempted last time – filling gaps in provision with local next generation networks.
Having been burnt once, will they be prepared to do so again?
Public sector players must decide how far to take up BT’s offer which may or may not be the best option for their communities and their organisations.
It remains to be seen whether would simply be underpinning a roll out in areas that would happen anyway – if not from this £1.5 billion then from a subsequently announced expansion of investment plans.
Some will see the £1.5 billion as probably a first stage, in the same way that ADSL roll out took place in stages.
The only thing one can say is that laying new fibre cabling into sparse and remote areas looks like an expensive proposition. Might other technologies be more suitable?
Published by the Commission for Rural Communities, recent State of the Countryside reports show that take-up of broadband has been relatively high in rural areas. So clearly there is a market for the technology.
Could BT be persuaded by the regulator to include some rural pilots at an early stage within its roll out plans, in order to test levels of take-up for new broadband services?
No doubt a case can be made for public bodies to strike up partnering arrangements in the less accessible rural locations which will prove most expensive to serve.
What many will want is some clarity about the areas least likely to benefit without intervention. That just might give community organisations the confidence to proceed. But will they get it?
If rural economies are to remain competitive and rural services are to modernise, this surely matters.
It’s an issue where policy makers and public bodies should engage, sooner rather than later, though with care and possibly a procurement expert at their side.