Memorandum submitted by Yorkshire Forward
(S25)
Thank you for your letter of 4 February seeking
the views of Yorkshire Forward for the inquiry being undertaken
by the Environment, Food and Rural Affairs Committee.
Yorkshire Forward has prepared evidence for
the inquiry which we enclose as an attachment to this letter.
You should be aware Yorkshire Forward has recently
commissioned a piece of work to assess the present situation regarding
broadband in the Yorkshire and Humber region. Marconi Integrated
Systems undertook the research and its report has only been submitted
to us in the last week. The report covers
1. Undertaking a regional broadband infrastructure
audit.
2. Modelling business and consumer broadband
take-up and demand.
3. Identifying and prioritising concentrations
of broadband demand.
We have not yet had an opportunity to fully
digest the report or to consider it from the perspective of rural
broadband issues. Our submission draws on some of the points raised
by the report. A full copy of the report will be provided on disk
as soon as we receive copies.
I trust that this meets your requirements and
I look forward to hearing result of the Committee's inquiry.
1. INTRODUCTION—BROADBAND,
THE REGION
AND YORKSHIRE
FORWARD
1.1 Yorkshire Forward has a strong interest
in the development of broadband internet service provision, infrastructure
and connectivity across the Yorkshire and Humber region. Broadband
is seen as a facility with a significant role to play in the development
of a competitive and innovative economy. We view broadband as
part of the overall importance of lCT as a vital tool to the region's
businesses, and as a key skill for the region's employees.
1.2 In recent years there has been a significant
increase in the geographical coverage of broadband across the
region. This has been principally through the development of the
network of Asymmetric Digital Subscription Line (ADSL) by BT and
other telecommunication providers and the use of the cable network
(using cable TV for cable modem). However, this expansion has
been patchy—the cost of developing or upgrading infrastructure
is significant and it has been targeted at areas where the likelihood
of financial return is greater—and the rural areas have
been poorly served. New developments in Broadband Fixed Wireless
Access (BFWA) are coming on line that have the capacity to expand
the broadband network.
1.3 Yorkshire Forward's interest in broadband
is principally in terms of business connectivity, and it is in
this field that our monitoring and intervention is focussed.
1.4 The Regional Economic Strategy for Yorkshire
and Humber specifically identifies the "Develop[ment of]
physical infrastructure and connectivity to support the use of
e-technology" as a key deliverable. This would be done by:
(i) Stimulating demand for existing broadband
facilities and addressing market failure in provision of broadband;
(ii) Ensuring the region's property product
is e-enabled; and
(iii) Utilising ICT to reduce the need to
travel.
1.5 Yorkshire Forward's E-Region Team takes
a lead role on ICT, e-business and broadband issues within the
organisation. The E-Region Team is involved with identifying demand,
real and potential, for broadband and highlighting the business
case for the ongoing expansion of broadband connectivity. The
Team also promotes the merits of broadband, ensuring that businesses
understand the potential impact that broadband could have for
them. This activity inevitably focuses on the parts of the region
more densely populated (by business), where a modest demonstrable
increase in demand can swing the balance in favour of an investment
to expand the network.
2. THE RURAL
AGENDA
2.1 The Rural Renaissance Team has an interest
in rural proofing activities both within Yorkshire Forward and
across the region as well as instigating activities of its own.
It takes a particular interest in the delivery of targeted and
specific business support and infrastructure. This has led to
Yorkshire Forward giving its attention to broadband in rural areas.
That said our priority could be described as "connecting
rural businesses to e-opportunities." This means promoting
business use of lCT in general and recognising that broadband
will be appropriate for some businesses.
2.2 The Rural Renaissance Team fields a
small number of enquiries from rural businesses frustrated by
the lack of broadband connectivity in their area. We are not the
first or natural point for making comment or complaint and do
not promote ourselves as such.
2.3 Last year Yorkshire Forward's Rural
Renaissance Team commissioned a piece of research into ICT use
by rural businesses. It picked up on some issues relating to broadband
but was far wider in scope. Among the headline results were:
— 73% of rural businesses responding
to the survey had only one to four employees—rural businesses
are predominantly micro businesses.
— 76% of all rural businesses surveyed
had one or more computers—the larger the business the more
likely it was to have a computer.
— 61% of all rural businesses surveyed
had intemet access—again the larger the business the more
likely it was to have internet access.
— At the time of the survey none of
the businesses with an internet connection had an ADSL broadband
connection and none had wireless or satellite broadband connection—3%
had a cable modem connection which may have been of a broadband
bandwidth. The majority (71%) of those with an internet connection
had a dial up modem connection.
— Speed of access was the ISP quality
factor with the lowest satisfaction level.
— 31% of the rural businesses surveyed
claimed to have a web-site. Only 25% of businesses with one to
four employees had a website compared to 67% among those with
50 or more employees.
— 84% of all rural businesses surveyed
made no sales on-line.
— 68% of all rural businesses surveyed
made no purchases online.
— One aspect the survey looked at was
the barriers to IOT adoption. One question asked whether limited
or poor access to the broadband network was a barrier in the use
of online technology. Based on all the respondents replies the
result was:
— 15% Neither agree nor disagree
Interestingly this was the largest "don't
know" response to any of the suggested barriers, indicating
a general level of confusion over the nature and potential of
broadband.
2.4 Broadband as an issue appears to have
taken on symbolic status as a representation of a digital divide
that is perceived to exist between town and country. As such it
is not seen in the context of whether, for example, urban businesses
actually use broadband or rural businesses actually need broadband.
The problem for the RDA is to seek practical and appropriate solutions
to the problem of rural broadband connectivity that can be delivered
by the private sector, alone or in some form of partnership with
the public sector, that are cost effective, reliable and appropriately
priced for the consumer.
3. TERMS OF
REFERENCE
3.1 In response to the first two issues
under consideration Yorkshire Forward would wish to submit to
the Committee a report that has recently been published. Yorkshire
Forward has recently commissioned a piece of work to assess the
present situation regarding broadband in the Yorkshire and Humber
region. Marconi Integrated Systems undertook the research and
the following is extracted from the Executive Summary of their
report. (A full copy of the report will be provided on disk.)
The report deals with provision before moving on to consider demand.
3.2 This assignment was essentially three
assignments in one, namely:
(b) Undertaking a regional infrastructure
audit
(c) Modelling business and consumer broadband
take-up and demand
(d) Identifying and prioritising concentrations
of broadband demand.
3A PRESENT
PROVISION
3.3 With regard to the infrastructure audit,
twelve separate telecommunications operators were contacted, of
which detailed network route information was collected for ten
covering fibre (trunk and access networks), DSL, Cable modem and
Broadband Fixed Wireless (BFW). This network information has been
mapped.
3.4 BT ASDL provision and Local Loop Unbundling
in the region is advanced, with the number of exchanges that have
been enabled marginally greater than the national average, and
at least two operators active within the region locating their
own equipment in BT's exchanges. A large number of non-enabled
exchanges have had trigger levels established by BT and progress
towards the targets has been steady.
(These are principally urban but there are some
market towns in the region where exchanges are enabled.)
3.5 A total of 81(21%) of the 390 BT Exchanges
in the Yorkshire Forward capable of providing Broadband services
(though this number is increasing). This is higher than the National
Average of 19%. Tegion, Sheffield and Rotherham in the South,
Bradford, Leeds and Huddersfield further to the West, York in
the Centre, Northallerton in the North and Scarborough in the
East. Although 21% of exchanges being enabled does not seem a
large number, the percentage of businesses and households actually
covered is much greater as they are concentrated in these aforementioned
areas.
3.6 The region is also well served by the
two main CATV operators, NTL and Telewest who have both built
out to around 70%-80% of their extensive franchise regions. (These
do not extend into rural areas except where they are on urban
fringes.) There are three separately owned and operated radio
based networks operational in the region with a further radio
licence holder yet to roll a network out.
3.7 Satellite broadband exists as an option.
Broadband connection is provided via a dish to a satellite and
in turn to ground station. An advantage of satellite broadband
is its being geographically non-specific—a clear view of
the satellite is sufficient to make a connection. Yorkshire Forward
has been running a project to test the proof of concept of a portal
for broadband optimised on-line business services. This has been
made available to 450 SMEs in the region, including 200 rural
businesses, using satellite as the means of connection. The project
and its monitoring is ongoing. For most of the rural businesses
involved it was the only form of connectivity that was currently
available.
Planned Provision
3.8 Fixed Wireless Access (FWA) and Broadband
Fixed Wireless Access (BFWA) use radio microwave technology to
transmit digital information between two otherwise unconnected
points. It can provide symmetrical or asymmetrical access, at
varying bandwidth as required. In theory, the only constraint
is a bandwidth/distance trade off (higher frequency = higher bandwidth
= shorter transmission distance).
3.9 One of the principal advantages of FWA
is that it is, in theory, a flexible and rapidly installable solution,
with the potential to meet current demand for higher bandwidth
before competing technologies get to market. The early deployment
of FWA has the potential to accelerate the pace of broadband development
since the providers of ADSL and cable (and perhaps other access
platforms) will come under increased competitive pressure to roll
out their services in the race to capture market share.
3.10 FWA also has potential as an access
platform for small communities in rural and outlying regions.
The deployment of FWA technology involves considerably less heavy
construction than does the laying of physical lines, which might
be necessary for new broadband cable networks.
3.11 In North Yorkshire the County Council
has been working with MLL Telecon Ltd, a small, relatively newly
established company supplying managed broadband telecommunication
services using wireless systems on a national, regional and local
loop basis. MLL's primary focus is on the provision of "last
mile" managed access solutions. In North Yorkshire it is
connecting up council offices, schools and library services, but
offers the potential to connect up SMEs and larger companies.
3B DEMAND
FOR BROADBAND
3.12 The Marconi report goes to great lengths
to establish a model for measuring demand. With regard to the
identification of concentrations of business demand, two separate
methodologies have been applied to the model outputs to ensure
that every possible concentration of demand, and every possible
way of addressing them are evaluated. One output, based on aggregating
broadband demand from individual businesses based on BT exchange
boundaries has resulted in a prioritised list of 78 (20%) non-enabled
exchanges.
3.13 A second but similar approach, but
based this time on aggregating demand of both businesses and households
using the more granular postcode sector boundaries has been undertaken.
Again each postcode has been ranked and prioritised and the results
extensively mapped. This approach lends it self to exploring other
connectivity options such as fibre, radio or cable modem, indeed
the data supporting this priority list highlights each of the
other infrastructure options that could be pursued for each postcode
sector.
3.14 The provision of two separate methods
of showing and analysing the concentrations of demand that exist
in the region provides Yorkshire Forward with a considerable amount
of information on which to develop initiatives. It also provides
the flexibility to examine different approaches to solving the
problem of matching infrastructure provision with latent demand.
In both cases, the higher each concentration sits on the priority
lists, the greater the chance of private sector investment being
made available.
3.15 It is apparent that in developing a
measure of demand in rural areas one cannot consider business
demand alone. In most cases business numbers and density are too
low to make a convincing business case for investment in enabling
exchanges. One must also consider household demand and aggregate
the two.
3.16 Yorkshire Forward has not yet correlated
the results against any classification of rural areas in order
to see how demand compares in these areas.
3C OBSTACLES
TO THE
PROVISION OF
BROADBAND IN
RURAL AREAS
ADSL
3.17 The construction of telecommunications
networks is dictated by the scale of the revenue opportunity in
order to facilitate a quick payback period. For this reason the
development of the network has taken place in areas (eg exchange
catchment areas). As the "easy targets" have been picked
off the approach adopted by BT has been to get registrations of
interest from local potential customers. When the number of registrations
of interest reach a trigger level then, based on conversion of
interest to commitment, the exchange can become ADSL enabled.
In some cases no trigger figure has been set for an exchange area.
3.18 Of the businesses which are in a non-ADSL
enabled BT exchange area, the possibility exists that some of
these exchanges will be unable to provide an ADSL service in the
near future. This can be due to limitations of space in the exchange
and also due to ageing copper infrastructure or the presence of
aluminium cabling.
3.19 A limitation of ADSL provision is that
customers must be physically near to the exchange to receive service.
The distance limit has recently been increased from 3.5 kilometres
to 5.5 kilometres and this, along with the condition of the existing
copper network, means each new line has to be tested prior to
service provision. Some customers may never be able to receive
service because of these physical constraints. This becomes a
significant problem in an exchange area that covers a wide geographical
area (low density business or domestic population) as typifies
many rural exchanges.
Cable Modem
3.20 Recent announcements regarding the
large amounts of debt being carried by cable operators (eg NTL
and Telewest) demonstrates the large cost of cable network development
and expansion. In this economic environment rural network development
will remain an
Broadband Fixed Wireless Access
3.21 The need for line of sight connections
may limit success, for example in exceptionally hilly regions,
and bad weather can interfere with FWA, particularly at the higher
frequency/higher bandwidth end of the spectrum.
3.22 In environmentally sensitive areas
such as National Parks and Areas of Outstanding Natural Beauty
there is likely to be resistance to the visual intrusion of masts,
particularly as high, prominent sites are preferred.
Satellite Broadband
3.23 The technology for satellite broadband
connectivity seems to be tried and tested, though we have received
some reports of dissatisfaction with the reliability of the service.
It is certainly apparent that subscription to the service is not
as cheap as the standard service package offered by ADSL (which
is the price structure most businesses and individuals are aware
of). Small businesses are generally price conscious and price
sensitive. Yorkshire Forward has become aware of some rural business
who have made a business case for a premium satellite connection
service, but these have been high value added businesses with
a need for high bandwidth connectivity.
3.24 Where businesses have a need for broadband
that is not being met they may choose to relocate. This could
result in the loss of the sort of value added businesses we are
trying to attract and retain in rural areas.
3D ROLE
OF DEFRA AND
THE COUNTRYSIDE
AGENCY
3.25 Consultation within Yorkshire Forward
has indicated that we are not aware of any specific role played
by DEFRA and the Countryside Agency in relation to broadband.
At present we have no relationship with either in respect of broadband.
Alternatives to Broadband
3.26 Yorkshire Forward assumed that this
referred to the broadband options available—over and above
ADSL. These have been covered in this submission. Yorkshire Forward
is unaware of any alternatives to broadband that would fulfil
the functions of broadband.
20 February 2003
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