Select Committee on Environment, Food and Rural Affairs Minutes of Evidence


Examination of Witnesses (Questions 134-139)

TUESDAY 8 APRIL 2003

MR DAVID WILLIAMS, MR PETER JAGGARD AND MR ROGER WALKER

Chairman

  134. Good morning, gentlemen. Mr Williams is Chief Executive of Avanti, Mr Jaggard is the Channel Sales Manager of Firstnet, and Mr Walker is ISP Manager of Firstnet. In this situation Firstnet offers wireless broadband services, and Avanti operate a satellite-based broadens service. In this particular session we are looking at those sort of broadband services that are not provided either through the telephone system or through the cable network system. To what extent do you see your future business being concentrated in rural areas as against urban areas, given what we have been hearing about the limited access of broadband on land-based networks in rural areas?
  (Mr Williams) We are a fairly small and lightly capitalised company and, therefore, we are compelled to focus our efforts on markets which are most likely to generate the highest returns in the shortest time frame; and therefore at the moment we are focussing on the provision of services to companies who have fairly significant budgets. Satellite technology is unique in its ability to deliver broadband services regardless of geographical limitations and therefore, inevitably, one ends up spending a lot of time with companies which are located outside large urban conurbations, and it is inevitable that the majority of our business is going to be transacted outside those conurbations. We are not chasing business on the basis of geography; we are chasing business on the basis of what can make us the most money in the shortest time frame.

  (Mr Jaggard) Firstnet have just acquired a PTO licence from the DTI; it was previously held by Tele2 but, unfortunately, Tele2 went into receivership so we have had it for four months now. We have improved the service quite dramatically and now have about 3,500 wireless users throughout the UK. The Spectrum Licence is from 3.6-4.2GHz. Code powers were applied to us from the DTI to ease deployment of the wireless network. What we have found is that most of our potential and existing clients are in unenabled exchange areas; that is where the demands are currently and continuing. We are certainly working with the Regional Development Agencies, as mentioned by the previous speakers. We have spent a lot of time with the RDAs because the majority of the people they are looking at are not covered and have a need and demand—business need and commerce—in the future. We are just putting a wireless broadband scheme in for Sleaford working very closely with the RDAs. Increasingly, however, we are being asked for wireless capabilities, last mile/first mile, within urban areas as an alternative, as a resilient solution, to businesses that use typical DSL services.

  135. Are there any advantages to either of your systems compared with a land-based system? Would an urban-based business with cable or broadband accessed through the telephone system choose to use a wireless or satellite-based system as a matter of choice? Are there advantages with that system?
  (Mr Walker) I think in terms of wireless it has the ability for greater geographic reach from a central point than, say, traditional DSL. DSL from a land-based system will reach maybe six kilometres from an exchange area; whereas from a central point with wireless technology it will reach 11-15 kilometres. In that respect we have a greater potential to cover a community or a community area with wireless technology. Also we have the ability to tie that up into mesh networks and stitch those networks together to achieve a greater rural focus.
  (Mr Williams) In our case we have contracted business in large towns in some instances where customers regard our solutions as better than terrestrial alternatives, for one reason or another. It is often the case even within a franchise area, or an area which has been equipped with DSL for a switch, the service is not universally available within that geographical area. However, there are other reasons why people choose our services—sometimes it is a matter of quality. I would echo what the previous speaker from NTL said, in that DSL has hijacked the term Abroadband. Many people now regard broadband as being one and the same thing as DSL, and it is not. DSL is one particular technology that can deliver broadband, and there are some reasons why it is not very good at doing that in many circumstances. One of the things that has hampered our ability to sell certain of our satellite products in very large numbers is price. We do not have the resources of BT and we are not able to very dramatically subsidise the cost down in the hope of recovering profit over a period of four or five years. However, we have recently developed a new technology which is being beta-tested during the summer months which uses a combination of very high powered satellite with very short range wireless technology, which enables us to provide very high grade broadband services to anyone, anywhere, at a cost which is directly competitive with a cost that one pays for DSL or cable in an urban situation. An example which occurred to me this morning is, for the amount of money that BT has just announced it is spending on changing its logo, which is £5 million, I could equip 350 rural communities with broadband services.

  136. You have answered my next question which is the extent to which you feel that your technologies have the potential to become competitive with the telephone or cable networks. Mr Williams has just touched on that. I do not know if you want to deal with that?
  (Mr Walker) "Competitive" carries a few different meanings. In terms of generic broadband services provided by cable companies or BT it tends to be associated with additional mediums so you will get your telephone line mixed with your broadband access delivered through the same cable. In mediums such as ours we deliver the broadband service for the internet, and then look to provide additional services to enhance that service. In terms of competition, it is hard to compete in a rural area where we are trying to balance the revenues from a single source service, rather than mixing and matching the two services together to get a breakeven between the cost bases. These are things we are looking at doing in addition to traditional internet access to take better advantage of additional revenue streams.
  (Mr Williams) In regard to this inquiry particularly I would reverse the question—can fixed line technology compete with satellite in rural areas? Satellite, from a price perspective, is really the only technology that can deliver high-powered broadband services in very rural areas at the lowest price.

  137. In a session last week there was some criticism made of your technologies in terms of quality and whether they were reliable or unreliable. For instance, if a tree blows down or the weather is bad will your broadband access suddenly collapse? Do you want to respond to that?
  (Mr Williams) I actually think both technologies are incredibly robust compared with terrestrial. Speaking for satellite, I would simply ask you all to consider: do you have Sky television; do you make telephone calls over long distances internationally? Both of those services do and have used satellites for transmission for the last 30 or 40 years. So satellite technology is incredibly robust. Comparing it directly with terrestrial technology, we contract in our service level agreements with customers for minimum service up-time of 99.75%. I have a contract personally with British Telecom for a DSL service and there is no guaranteed up-time in that contract. I am prepared to bet my company on the level of quality that we can provide. Specifically addressing whether satellite systems do have varying levels of performance in response to weather conditions, every single telecoms technology has its own unique set of challenges which it has to overcome; the same is true of DSL, possibly more so with factors like the level of aluminium in the copper cable and factors like the proximity of the cables to the ground. All technologies have issued they have to overcome. Weather degradation is not a problem which has ever, in my experience, caused anyone not to purchased satellite technology, or not to be happy with its performance.
  (Mr Walker) Wireless at this point in time is primarily delivered with line of site service. We place a transmitter on a customer's premises and target that from a transmitter in a central location. So long as the line of site is clear and there is no obstruction, whether that be trees, bushes, buildings or whatever, then that service is within the realms of reasonable SLAs available to 99.9%. We have technology that we are developing that is in existence now (which is more expensive than traditional technology) and means we do not have the problems with line of site. We can place that service wherever within a certain radius and provide wireless broadband services within that radial distance.

Diana Organ

  138. Apologies for being late, and you may have answered this question already. At the moment many of us in rural areas are facing a campaign by local residents when they are concerned about the masts that are being directed or mobile telephony or, indeed, the tetramasts for the emergency communication. People do not seem to feel aggrieved, upset or worried about health things for things they cannot see, ie the telephone wires that are coming through. How much would you expect that with your system—because it is using wireless and it is using a microwave band and people might have concerns about their health in that—you might come up against a campaign by local residents against this kind of technology, albeit that it may be unfounded?
  (Mr Walker) With wireless services it is something we are very conscious of. Wireless in the frequencies that we transmit, even from a transmission point to a wireless receiver on a customer's house, has far less power output than, say, holding a mobile phone to your ear. It is something we are very conscious of in terms of objections when we are placing transmitters in areas. Something we do with some of our suppliers is hold meetings with communities, so if there are issues we can have them aired and addressed and quell any issues raised from that.

  139. One of the things with the telephone masts (and there are mobile telephony masts and the tetramasts) was that the companies involved in that system often did not bother to talk to something as fundamental as the parish council. If you are putting it in rural areas, a lot of rural areas have good vistas and beautiful countryside, and people want to preserve that view unfettered by little bits of metal, do you have a company policy, before you site any of your infrastructure? Whom do you talk to? Do you talk to elected representatives, such as district councils and parish councils?
  (Mr Walker) It depends where we are looking at deploying them, and where we are looking at deploying the transmitter, to be honest. There are two parts to the question. In terms of whom we talk to, wireless technology tends to have best coverage from as high a position as possible. Therefore, depending where that highest position is, we will talk to whoever has an interest in that geography; and whether it is the church councils depends who we can talk to, to settle the fears that are raised by that positioning. The second area is, unfortunately, the ugliness of the masts. They tend to be oblong and quite unsightly. What we are doing at the moment is playing with transmitters that are a lot more easily disguised so they are not as apparent in the area.[2]

  (Mr Williams) We do not have a problem at the moment. Satellite antennas are fairly small and unobtrusive. The new technology I referred to a while ago does incorporate a wireless transmitter for very short areas, but that transmitter again is very, very small and tends to be quite unobtrusive. The one problem we do have in our business is typically we are siting antennas on people's roofs and, very often, if you are siting an antenna on the roof of a building which is owned by a freeholder for the use of a person or a company who has a lease on the building, that leaseholder has to consult his freeholder for permission to site the dish and typically the freeholder makes very unreasonable demands for cash to give him the right to install antenna. That is the most tedious element of our business; but we have no issues with safety or particularly with unsightly antennas.


2   Note by Witness: We can also colour match antennae to camouflage them to their placement. Back


 
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