Broadband Fit for Rural Growth: CLA VISION FOR RURAL BROADBAND. Country Land & Business Association

Transcription

1 Broadband Fit for Rural Growth: CLA VISION FOR RURAL BROADBAND Country Land & Business Association

2 CONTACTS For more information on Broadband Fit for Rural Growth: CLA vision for rural broadband, published in September 2012, contact: Dr Charles Trotman Head of Rural Business Development Country Land and Business Association 16 Belgrave Square London SW1X 8PQ Tel: Fax: Country Land and Business Association Limited 2012 Registered in England and Wales No: at the above address. All rights reserved. No part of this publication may be reproduced or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in any retrieval system of any nature without prior written permission of the copyright holder except as expressly permitted by law. Country Land & Business Association

3 Broadband Fit for Rural Growth: CLA vision for rural broadband CONTENTS 1. Introduction 4 2. The importance of broadband Why broadband is vital for rural Britain The rural urban digital divide 5 3. The policy implications The Government s broadband strategy Universal coverage Competition within the bidding process Relaxing planning rules Strategic alliances G (Fourth Generation) networks Mobile phone coverage 7 4. The future needs of rural areas 8 5. Summary of recommendations 9 Broadband Fit for Rural Growth: CLA vision for rural broadband

4 1. INTRODUCTION The Country Land and Business Association (CLA) has been campaigning for effective, reliable and affordable broadband for all rural areas since In the past 10 years, the CLA has become the main national organisation to champion the issue of rural broadband, for its members as well as the wider rural economy. There is no doubt that significant progress has been made since The CLA has been instrumental in lobbying the infrastructure providers to offer a basic broadband service for all. It has taken the lead in lobbying government to provide public funds for the roll-out of a superfast broadband network as well as pushing for a Universal Service Obligation (USO) to ensure that all in rural areas have access to a minimum speed of two megabits per second (Mbps). However, the Government s strategy is not making the inroads it needs to meet its objective of ensuring that the UK has the best superfast broadband network in Europe by The process appears slow, cumbersome and excessively mired in red tape. In addition, there appears to be no clear direction as to how the various broadband technologies are to be deployed. Should there be a sole reliance on fibre optic or is there room for a mixture of technologies, a patchwork so to speak, which can be deployed to meet differing circumstances and different locations? There is little doubt mistakes have been made but there is still time to rectify these. The Government s announcement in relaxing some of the planning regulations relating to infrastructure build is welcome but a great deal depends on how this will be implemented. There is also the question of education. One of the major concerns remains the lack of information provision to the public as to the advantages of broadband and the necessity of effective and affordable broadband connectivity in rural areas. For broadband to take off in rural areas there must be adequate demand as well as supply. Clearly, big issues still need to be resolved. This report sets out the CLA s policy on broadband and puts forward a series of recommendations for the Government and the broadband infrastructure industry to consider and take forward. Broadband Fit for Rural Growth: CLA vision for rural broadband

5 2. THE IMPORTANCE OF BROADBAND 2.1 Why broadband is vital for rural Britain The need for an effective and affordable broadband network for all rural areas is now widely recognised. Indeed, the business case has been put and accepted that broadband acts as an economic driver for rural businesses as well as helping the social development of rural communities. Broadband for rural areas can have several advantages. With broadband: the connection to the internet is always on, allowing for continuous internet access. Using DSL (Digital Subscriber Line) means that the telephone line can be used at the same time, unlike a dial-up connection; large amounts of data can be handled. A large file that might take hours to download with a conventional narrowband dial-up connection of 36 kilobits per second (kbps) can be downloaded in less than a minute using broadband; it is much easier to upload information or update a company website. This has a direct impact on productivity and makes it easier for the company to operate and remain competitive. Uploading files to the company website via a narrowband connection can be painfully slow and time-consuming and often frustrating when the connection is lost; Small and Medium-sized Enterprises (SMEs) can achieve cost savings. Without broadband, costs are incurred through the postal service, particularly with overseas customers. Broadband can cut costs by enabling large amounts of information to be transmitted quickly and easily; a Voice over Internet Protocol (VoIP) system can be used which allows telephone calls to be either free (through the broadband connection) or to come at a significantly reduced cost. For example, a fish business that imports stock from Thailand requiring at least two telephone calls a day is able to save 15,000 a year in costs through using VoIP; employees will be able to work more effectively and efficiently. More time can be spent online, such as researching new products, or looking for new sales leads. To be able to exploit these advantages, however, there must be a reliable, adequate and costeffective broadband connection, something many in rural areas still do not have. 2.2 The rural urban digital divide Since the advent of broadband, a significant ruralurban digital divide has existed. This divide is defined as the percentage of those in rural areas who are unable to secure an effective and affordable broadband connection when all people in urban areas can receive broadband. The CLA calculates that, currently, between 15 percent and 20 percent of those who live in rural areas are unable to receive anywhere near the Government s stated benchmark of two Mbps. Indeed, this has been confirmed by Ofcom s digital mapping process 1. Such a situation is unacceptable. Given the current weakness in the economy, a key government policy is to increase the use of online resources. It is calculated that this could save at least 1billion a year. However, such savings cannot be achieved if rural businesses are not able to access and return data online due to the lack of a suitable broadband connection. The line adopted, for example, by HM Revenue & Customs regarding the completion of tax returns and PAYE online, is that those without a suitable broadband connection should use an agent. This misses the point entirely as using a third party increases costs to the business. Broadband should make it easier for rural businesses to compete on an equal footing with their urban counterparts. However, the lack of an infrastructure for fixed-line broadband simply accentuates the ruralurban digital divide. Until this infrastructure is put in place, other technologies must be used to bridge the divide. 1. Ofcom digital mapping process: Broadband Fit for Rural Growth: CLA vision for rural broadband

6 3. THE POLICY IMPLICATIONS 3.1 The Government s broadband strategy The Government s publication Britain s Superfast Broadband Future, in December 2010, set out its vision of the best way of developing a superfast broadband network for the future. As part of this strategy, 530milllion (plus an additional 300million after 2015) was made available to meet the Government s two objectives: to put in place a Universal Service Commitment (USC) of at least two Mbps by 2015; to put in place a superfast broadband network with a minimum speed of 24 Mbps by This money was to be allocated by Broadband Delivery UK (BDUK) to local authorities where it would be match-funded. The local authorities were then tasked with identifying those areas where there was no or little broadband connectivity and putting together a local broadband plan to meet the Government s objectives. Following this, a procurement exercise would then invite infrastructure providers to tender for the monies available and to build an effective and sustainable broadband network. This is the theory. However, in practice it has proved very hard for local authorities to meet the imposed deadlines. In effect, it is very unlikely the USC will be met by Of more concern is the perceived lack of understanding as to the needs of rural areas. The CLA believes that the key is universal coverage. It is accepted that many rural businesses currently do not need speeds associated with superfast broadband to operate efficiently. Of course, this will change in the future and this is why it is essential that any broadband network is proofed against future developments in business. optimistic figure. Given this, too great a pressure is being placed on the private sector to finance a superfast broadband network when broadband needs to be regarded as a benefit to all in society. 3.2 Universal coverage The CLA advocates the adoption of a broadband USO and we remain concerned that the Government is only promoting a USC which has no legal sanction behind it. We did not agree when the previous government advocated the USC and we remain concerned that a USC provides government with a get-out clause in the event that the two Mbps benchmark cannot be achieved by the stated deadline of We also do not agree with the House of Lords July 2012 report Broadband for all an alternative vision on the issue of a USO. There is absolutely no guarantee that the Government can or will meet its two Mbps commitment by Indeed, there is no sanction for it to do so if there is simply a vague promise, rather than a legally binding obligation. If, as the House of Lords Communication Committee report states, there is likely to be a stronger case for a USO in the future, we see no reason why the Government should not now begin to put in place a workable structure so that a USO can take effect by The CLA calls on the Government to: begin work on putting in place an effective framework to implement a Universal Service Obligation by The CLA s goal has always been to ensure universality of broadband coverage. However, we do not believe that the strategy advocated by the Government through the BDUK mechanism is working. The policy is too fragmented and there is a strong argument that the contracts awarded by local authorities will go to the biggest and most powerful players in the market. Irrespective of whether there is adequate transparency, the system has been badly skewed by the nature of the procurement process and the methods used by local authorities. The CLA is not convinced the 530million committed (or 1.06billion when including match funding) is sufficient. Government and industry studies agree that the costs of putting together a superfast broadband network are closer to 15billion (or even 28billion 2 ) and this indeed may be a significantly 2. Caio Report: The Next Phase of Broadband UK: Action Now for Long Term Competitiveness, 2008 Broadband Fit for Rural Growth: CLA vision for rural broadband

7 3.3 Competition within the bidding process The process adopted by BDUK within the framework for bidders for local authority broadband contracts has thrown up a very peculiar situation. Originally, there were nine infrastructure providers wishing to be considered as preferred bidders when the procurement process began in earnest. Because of the bureaucratic structure put in place by BDUK, there are now only two preferred bidders BT and Fujitsu. This appears to reduce significantly the element of competition in the bidding process. Indeed, all of the contracts awarded so far by local authorities have been won by BT. This is in no way to suggest that BT or Fujitsu are at fault given that both companies are simply acting within the regulatory framework set out by the Government. Rather, the responsibility for this state of affairs lies with BDUK. Indeed, the CLA is not surprised that the framework is being investigated by the EU authorities as potentially anti-competitive. The end result is delay. Indeed, the Department for Culture, Media and Sport (DCMS) has confirmed that the tendering process will be delayed until March 2013 at the earliest. What was billed as an unmovable deadline clearly needs to be revisited. The CLA calls on local authorities to: ensure that contracts awarded to infrastructure providers include fair compensation provisions for any failure to meet time and coverage requirements. In addition, payments to infrastructure providers must be performance-related to ensure a fast and effective broadband service is rolled out to rural areas. 3.4 Relaxing planning rules The CLA fully supports the Government s announced intentions to relax the regulatory burdens that hamper broadband infrastructure build. We believe that if the planning rules relating to the positioning of green cabinets are relaxed then it makes meeting the 2015 deadline possible. However, we are also fully aware that CLA members property rights must remain protected and we will be discussing directly with the Government ways to ensure that our members are not adversely affected when it comes to the installation of broadband infrastructure on their land. 3.5 Strategic alliances As stated before, the CLA has been lobbying for broadband for the past 10 years. A number of other trade associations has also been pushing Government to fulfil its promise to put in place a broadband infrastructure that acts as an economic driver and a tool for social equality. The CLA believes that, given the problems and delays being experienced, now is the time for affected trade associations to come together in a formal strategic alliance to further influence the debate. The CLA calls on other like-minded trade associations to: work with the CLA to agree a series of common objectives and to put in place a strategy so that the undoubted benefits of the broadband revolution can be delivered to all G (Fourth Generation) networks The CLA remains supportive of the efforts being made to put in place an effective 4G network and is a member of the 4GBritain campaign. We recognise the importance of the emerging 4G market and we aim to facilitate the implementation of a technology that could see significant benefits to rural communities. 3.7 Mobile phone coverage The CLA remains concerned at the continued lack of mobile phone coverage in rural areas. Mobile phone usage will overtake the use of traditional telephony, and the current mobile phone infrastructure is simply accentuating the rural-urban digital divide. To this end, we support the Government s injection of capital in an effort to reduce and, ultimately, resolve this disparity. Broadband Fit for Rural Growth: CLA vision for rural broadband

8 4. THE FUTURE NEEDS OF RURAL AREAS The CLA accepts that greater speeds will be required in the future. Applications are becoming increasingly sophisticated and will undoubtedly need ever more bandwidth. Adequate infrastructure for future bandwidth requirements must be put in place. One of the CLA s primary concerns relates to access to broadband. Even if superfast broadband were to be made more widely available, there is a great likelihood that rural areas would miss out simply because of the cost of putting in a superfast broadband infrastructure. It is well known that the vast majority of infrastructure providers will not fund projects in remote rural areas because there is no economic return. Even the Government has acknowledged that one tenth of people of rural areas those living in the most remote parts of the countryside will never be able to gain access to the superfast network. This means that alternative broadband provision will need to be developed but the CLA has seen no evidence that this is being considered. The CLA is not wedded to the idea of solely relying on a universal fibre network as the best solution although this must still be considered the ultimate objective. What is required today is a patchwork-quilt model whereby other technologies, such as wifi and satellite become widely available and widely used. As we have stated above, the essential objective must be the availability of at least two Mbps. Whether this happens through a fixed broadband network or alternative solutions does not greatly concern us. What is important is that everyone in rural areas has the opportunity to be connected. In addition, the CLA continues to be alarmed at the Government s lack of support for rural communities to be allowed to piggy-back onto public sector broadband. The examples where rural communities have been able to take advantage of unused public sector bandwidth to feed into community wireless networks are few and far between. The CLA continues to have serious misgivings about Defra s Rural Community Broadband Fund. We believe it has missed a major opportunity through seeking only a superfast broadband solution. The effect of this will be to reduce very slowly the number of people in rural areas who have no connection rather than facilitating broadband for all in the countryside. We question why there has been so little consideration given to how to ensure universal coverage. The CLA calls on Defra to: look again at the implementation and structure of the Rural Community Broadband Fund to ensure more businesses have access to the available funding. The CLA calls on the Government to: provide an appropriate framework to allow rural communities to piggy-back onto public sector broadband. Broadband Fit for Rural Growth: CLA vision for rural broadband

9 5. SUMMARY OF RECOMMENDATIONS Effective and affordable broadband connectivity is vital in providing the economic and social stimulus needed in rural areas. The CLA makes a number of recommendations to ensure that broadband is available to all by 2015 as well as being fit for purpose. 3.2 Universal coverage It is essential that the Government s objective for everyone to have access to two Mbps by 2015 is met. The public needs the legal assurance that it will receive these speeds. The CLA calls on the Government to begin work on putting in place an effective framework to implement a Universal Service Obligation by Competition within the bidding process It is the responsibility of the Government to ensure that the deadline of 2015 for putting into effect a superfast broadband network is delivered. This means that local authorities need to work with successful infrastructure providers to ensure that deadlines are met and that rural areas receive the same quality of service. The CLA calls on local authorities to ensure that contracts awarded to infrastructure providers include fair compensation provisions for any failure to meet time and coverage requirements. In addition, payments to infrastructure providers must be performance-related to ensure a fast and effective broadband service is rolled out to rural areas. 4. The future needs of rural areas Broadband technology is constantly changing. This is the case for both the public and private sectors. Rural communities should be allowed access to public sector broadband through community initiatives so that it is available to all, irrespective of their geographic location. The CLA calls on Government to provide an appropriate framework to allow rural communities to piggy-back onto public sector broadband. The CLA recognises the importance of Defra s Rural Community Broadband Fund in trying to meet the needs of the 10 percent of rural areas which will not benefit from access to the superfast broadband network. However, we do not believe that the current structure employed is working for the needs of rural areas. The CLA calls on Defra to look again at the implementation and structure of the Rural Community Broadband Fund to ensure more businesses have access to the available funding. 3.5 Strategic alliances Broadband is an all-embracing policy debate. This means that all affected trade associations need to work together to influence Government policy. The CLA calls on other like-minded trade associations to work with the CLA to agree a series of common objectives and to put in place a strategy so that the undoubted benefits of the broadband revolution can be delivered to all. Broadband Fit for Rural Growth: CLA vision for rural broadband