Does rapid take-up of SME broadband vouchers indicate a better way for final 2%

The broadband talkfest on 7th October appears to have been a profound disappointment  although there is still time to submit views to the accompanying consultation announced in the OJEU. BDUK appear to wish to “save time and effort” by putting the rest of the funding available into the existing programme of support for BT rather than organising a new procurement or looking at alternatives. Perhaps worse they appear, yet again, to be quietly moving the goal posts and watering down the obligations on BT .

But the world is going mobile. Telefonica is contractually committed to providing 4G to 98% of the population by 2017. It plans to share infrastructure with Vodafone (which now has £billions to turn round the Cable and Wireless network). EE believes it will achieve 98% by the end of 2014 and is spending £1.5 bilion to do so. The collective investment plans of the mobile operators, including fibre to the additional masts that will be necessary, are rather larger than those of BT, which is now diverting funds into its content operations to compete with those of Sky and Virgin. 

Meanwhile the final  2%,  including hill farmers, tourist operations, small businesses and home-workers, let alone school-children and pensioners in rural areas, will be left with current services, often under 1 meg, for the foreseeable future.  That makes a nonsense of  “digital by default” for those who may well have to drive for an hour or to be able to transact reliably with DEFRA and HMRC, let alone other government and public sector services or with those private sector tranaction and banking services which time out because measuring response time is part of their security defence against man-in-middle attacks and latency is often inconsistant over contended rural networks.
The Welsh thought through the consequences with their  reverse post code lottery of £1,000 a time to help the final 4%, (the main Superfast Cymru programme was targeted at 96%), to access satellite or wireless services to the home or to club together to get fibre (from BT or elsewhere) to the nearest viable community. The Scots, however, were there first, including a contract with Avanti to provide a mix of satellite and local wifi to the final 1% : their mainstream programmes had a target of 99%.

But we should not forget all those businesses served by exchanges which BT has no plans to enable for fibre to the cabinet (FTTC) because it would cannibalise their leased line revenues.  The response to the pilot Small Firms voucher scheme, from a standing less than three months ago indicates that this may well be a most effective way round the BT challenge to the use of municipal enterprise to help give local businesses the connectivity they need at affordable price.  Given the confusion in the market as to who can provide what services and where and given the failure of most government schemes to “help” small firms (take up rates of under 1% are not uncommon)  the pilot looks to have achieved a remarkable amount in a very short time. This is all the more creditable when compared to the glacial rate of progress with other BDUK programmes.

I will be interested to hear the comments of others as to its success or otherwise but the idea of using the funding available from DEFRA to provide vouchers for the final 2% clearly merits serious consideration.

There is also a need for robust action to sweep aware any secrecy about how public money is being spent to serve isolate communities.  Now that the mobile operators are committed to providing an alternative supply to most of the final 10% the maintenance of any degree secrecy over that for which BT is receiving public subsidy would appear to be evidence of hidden state aid. We should remember that the EU approval of the BDUK framework was grudging, provisional and subject to review of what was actually implemented. A claim for refund in the event of abuse is not impossible. I ownder how the Public Accounts Committee would react. This is an area where transparency is the best defence. 

BT has said it has no problem with the details being placed in the public domain. As yet, however, the material being made available via the councils (I have been looking at some of the maps to try to work who will actually receive what) is commonly too vague for alternative suppliers and investors to make serious long term plans.

Meanwhile the tectonic plates are shifting and BDUK appears unable to think beyond defending past failure. There is therefore an even stronger case that when BDUK was created for giving the funds available for rural broadband to local council authorities, to pool with their own and those from local business and consumers, so that all can access services that are digital by default (running over PSN compliant networks). The delay and overheads that have resulted from “co-ordination” by Whitehall and “guidance” from those without experience of procuring modern telecommunications networks, are no longer defensible.