BT announced plans, with the aid of EU development funding, to extend the rollout of its super-fast fiber broadband network to 80–90% of homes and businesses in one of England’s most rural regions, Cornwall and the Isles of Scilly. This is a major coup for the region, but other regions will need to seek alternative investment routes because the same source is not available to them.
Bridging the investment gap
In May this year, BT announced that it would expand the rollout of its super-fast broadband (next-generation access) network in the UK, adding an extra £1 billion to the investment pot, and extending its targets from 40% of UK homes by the end of 2012 to two-thirds by 2015.
This appeared to be as far as the former incumbent would go under its own steam, as the investment case for connecting the remaining third of UK homes (most of which are in expensive-to-reach rural locations) simply did not stack up.
Yesterday’s announcement accelerates the rollout of super-fast broadband to a region where many consumers and businesses might otherwise have found themselves in the “final third” without next-generation broadband services for some years.
BT Wholesale CEO Sally Davis was keen to point out that once deployed, with the first connections to go live before March 2010, the new Cornish infrastructure would enable a variety of communications providers to offer super-fast broadband to their retail customers.
The investment gap in this case has been met by funds secured from the European Regional Development Fund’s (ERDF) Convergence investment, for which Cornwall and the Isles of Scilly qualify under EU development rules. The total budget set aside for the project is £132 million, of which up to 40.5% will come via the ERDF and the remainder from BT.
Cornwall continues to light the way for rural broadband rollout
Cornwall also secured public funds to support initial DSL broadband rollout, and through this and innovative educational schemes such as the actnow project, the region currently has broadband penetration 12% above the national average. This project is a significant coup for BT, but it will face challenges in delivery. One of these will lie in its choice of access technology, with BT indicating that it will deploy a variety of technologies to reach Cornish homes and businesses.
A detailed area-by-area survey will determine which technology will be deployed where. These will be decided upon on a case-by-case basis. BT currently estimates that about 50% will be connected via FTTP, 30–40% via FTTC, and the remaining 10–20% using a mix of alternative technologies such as advanced copper, wireless, and satellite.
Overcoming the challenges of rolling out NGA in one of the UK’s most remote rural regions will provide BT with invaluable experience in terms of planning, costing, selecting the right technology, and actual deployment. Through this project, BT should emerge with a valuable set of reusable blueprints that it can turn to when it comes to NGA rollout in other regions of the UK.
Other rural regions will need to look elsewhere for funding
While this project demonstrates that the gap between private investment and the costs of deploying comprehensive NGA coverage can be bridged, only Cornwall and some parts of Wales qualify for ERDF Convergence funding. As a result, the majority of the UK’s other regions not currently covered by BT’s rollout plans will have to look elsewhere for public funds.
BT has made it clear that it is willing to work with other partners to fund similar projects elsewhere. However, the impending dissolution of the UK’s Regional Development Agencies and uncertainty about the remit of their replacements, the Local Enterprise Partnerships, means that decisions on public funding of similar projects could be some way off.
In addition, while BT claimed that the additional investment set aside for the rollout in Cornwall would be over and above the £2.5 billion it has already allocated to cover two-thirds of the UK, it also indicated that Cornwall would now fall within its target of 66% coverage by 2015.
BT CEO Ian Livingston stated that BT is currently “rolling out fiber to 80,000 homes a week, which is the equivalent of fibering the whole of Singapore every quarter.”
This suggests that BT is running at close to capacity, and that resources put to work on the project in Cornwall will have been transferred from other areas of the UK, which will perhaps have to wait until after 2015.