Joint memorandum submitted by the Department
for Environment, Food and Rural Affairs and
the Department of Trade and Industry (S46)
EXECUTIVE SUMMARY
The UK government target for broadband is for
the UK to have the most extensive and competitive broadband market
in the G7 by 2005, with significantly increased broadband connections
to schools, libraries, further education colleges and universities.
Details of the government's policy and strategy are set out in
UK Online Annual Report 2002 (available at http://www.e-envoy.gov.uk/oee/oee.nsf/sections/esummit-ukoannrep/$file/indexpage.htm).
Stimulating broadband across the whole of the
UK, especially in rural and remote areas, is one of the Government's
top priorities. At the moment over two thirds of households can
access an affordable broadband service. This is ahead of other
countries such as France and Italy. However, we recognise that
we need to do more to make broadband available in all parts of
the country.
The Government does not believe that there is
a case for general subsidy. In the main part we believe that the
competitive market which has brought about the current level of
availability should be allowed and encouraged to roll out services
where it believes this to be economically viable and to develop
innovative approaches to doing so. Evidence of market innovation
exists, for example:
— the registration schemes run by BT
and by Liberty Broadband, stimulating and validating demand to
reduce the risk on investment;
— the development of new technologies
such as wireless that are in the pipeline—and more spectrum
will be made available in coming months;
— satellite services becoming more
affordable.
But there are powerful levers for Government
where the market will not deliver:
— Public sector expenditure on broadband.
We will be spending over £1 billion on public sector connectivity.
Aggregation of this demand can have a significant positive impact
on industry investment and availability of broadband.
— Regional economic development. Regional
Development Agencies (RDAs) will have £1.8 billion to spend
next year on regional economic development. Where broadband is
a significant barrier to economic development it would be legitimate
for them to spend some of that money on this.
— We have already given the RDAs and
devolved administrations £30 million for pilot projects to
help them learn what will work in extending availability and take-up
(the UK Broadband Fund).
— European structural funds are another
source of funding where applicable—for example the ACTNOW
project in Cornwall (£5 million of EU funds) will result
in 13 exchanges being broadband enabled.
To bring together public sector aggregation
and regional development agendas we launched the UK Broadband
Taskforce in November 2002. Through the Taskforce DTI has put
a Broadband Co-ordinator with business experience in each region
and devolved authority to spread good practice and make things
happen.
Defra is the Government department with responsibility
for championing rural issues, and developing rural solutions.
Defra is aware that the Government's target to have the most extensive
and competitive broadband market in the G7 by 2005, which was
developed before Defra came into existence, could be met even
if there was no broadband availability in rural areas. However,
DTI, Defra and the rest of Government are working to achieve extended
availability of broadband networks into rural areas in spite of
this.
Defra is committed to working with and through
others to ensure that rural areas are not disadvantaged by non-availability
of affordable broadband solutions. Defra is particularly concerned
that the potential of broadband for delivering government services,
and increasing the productivity of businesses is available in
rural areas.
Defra is:
— Building information on the potential
uses of broadband in rural areas and collecting information on
current projects and best practice.
— Researching evidence of the use of
broadband to increase productivity of businesses in rural areas,
which includes a third of all small businesses.
— Seconding a member of staff to DTI
to work with them on broadband policy and in particular on the
Government's strategy for extending rural broadband availability.
— Consulting and working closely with
stakeholders.
Defra believes that there powerful levers available
to extend broadband in rural areas particularly through using
public sector procurement to bring broadband to rural areas, working
closely with the RDAs. Defra and DTI are co-operating closely
on these issues and considering how a specific contribution to
tackling rural broadband issues can be achieved.
INTRODUCTION
Broadband is the term used to describe a wide
range of technologies that allow high bandwidth data transmission
(high-speed) and always-on access to the internet and other electronic
services.
The Broadband Stakeholder Group defines broadband
as:
"always on access, at work, at home or on
the move provided by a range of fixed line, wireless and satellite
technologies to progressively higher bandwidths capable of supporting
genuinely new and innovative interactive content, applications
and services and the delivery of enhanced public services."
The current technologies through which broadband
can be delivered are briefly described below, with more detailed
descriptions in Appendix One.
DESCRIPTION OF
MAIN BROADBAND
TECHNOLOGIES:
xDSL
DSL technologies "enable" broadband
services to be delivered over the existing copper loops that extend
into all households and businesses with a fixed telephone line,
but the technology is only effective when used over limited distances
(about 5.5km from the local exchange). The most common version
of DSL in the UK is ADSL, or Asymmetric Digital Subscriber Line,
(`asymmetric' because download speeds are faster than upload speeds).
Cable Modem
Broadband provided along cable networks. Cable
modem services are also often asymmetric.
Fixed Wireless Access
Broadband fixed wireless access allows users
to take advantage of cheap, fast internet and multimedia access
through radio links rather than down a line.
Satellite
Satellite can be used to provide one-way broadband
(with a return path via a normal telephone line) or two-way (where
the return path is via the satellite). Satellite technology has
the advantage that it is capable of reaching remote rural areas
where other types of provision may not be technically feasible
or economically viable. However it is currently more expensive
and suffers from some limitations due to the inherent latency
in the system (ie timelags while the signal travels to and from
a satellite).
Powerline
Broadband delivered along electricity lines.
Experimental in the UK, with trials currently underway.
Fibre
Fibre to the building offers a high-speed connection
at delivery rates above those achievable with DSL technologies.
Installation costs increase with the distance from the end user
to the fibre node and are higher than copper. This cost means
that fibre is mostly only found at large sites that have a heavy
need for high-speed data, although smaller sites situated near
to a fibre node can be served as well. In addition, the use of
fibre to distribution points (eg street cabinets) may become economic
over time.
Leased lines
Leased lines are permanent telecommunications
links supplied by network operators to users, which provide capacity
dedicated to the user's exclusive use. They can be bought at a
variety of speeds from 64 kbps to 1 Gbps. At lower speeds they
may be copper cables but at higher speeds will generally be optical
fibre. Because they are a "made to measure" solution
they are more expensive than the mass-market products described
above. They are used by large businesses and some SMEs to carry
high volumes of voice and data traffic.
3G
Broadband along mobile networks delivering fast
internet access on the move. However, bandwidth is likely to be
limited and costs higher than non-mobile alternatives.
ISSUES RAISED
BY THE
COMMITTEE
Taking account of the needs of private businesses,
public services such as schools, and individuals, the Committee
will examine the provision of broadband in rural areas. In particular
it will consider:
— what demand there is for broadband
in rural communities;
Demand for broadband in rural areas has been
articulated through the media, through lobbying of MPs and through
campaigns. The Country Land and Business Association (CLA) campaign
has so far received 1,700 e-mails of support of which 70% are
from rural businesses, a further 15-16% from rural residents and
the majority of the rest from urban residents looking to locate
to rural areas. The success of BT's pre-registration schemes for
a number of rural exchanges, and the enthusiasm which has led
to the setting up of community broadband schemes, demonstrates
that there is potential private sector demand. But the experience
of urban areas is that at this early stage of the market, broadband
is still a minority product: at the end of Q3 of 2002 67% of the
UK's households had access to a terrestrial broadband solution
but only 4% of all households were subscribers and more significantly
only 6.2% of all households with access to broadband services
subscribed (source Analysys from Broadband Stakeholder Group Second
Annual Report). However, demand in urban areas is accelerating,
particularly following extensive advertising campaigns and lowering
of prices last year. There is potential for a serious urban/rural
"digital divide" if take-up accelerates in urban areas
while rural areas are still left without access to affordable
broadband technology.
If broadband can be shown to have a significant
effect on productivity of businesses then we can expect take-up
of broadband by businesses to accelerate. This would have a detrimental
impact on the competitivity of rural businesses if affordable
broadband was not available to them. A recent report by the Government's
Strategy Unit into Electronic Networks included work by the London
Business School highlighting a number of ways in which ICT could
benefit different sectors of the economy:
— Reductions in transaction costs.
— Improvements in (internal and external
) management efficiency.
— Better information, giving better
stock control comparisons, encouraging competition.
— Easier price comparisons, encouraging
competition.
— Increased choice and convenience.
— Improved customer relations.
The Strategy Unit Report concluded that there
is reasonable evidence from the US that ICT investment has had
a positive impact on productivity and growth. Evidence of the
specific impact of electronic networks is less clear, as is evidence
of the impact of ICT investment in other countries, including
the UK. However, business case level studies showed that electronic
networks could have a major impact on businesses, consumers and
government depending on supporting factors such as investment
in learning. Defra, working with DTI, is putting in hand research
to look at what evidence there is that broadband, specifically,
can lead to higher productivity. This will be important in contributing
to Defra's rural Public Service Agreement introduced through the
2002 Government Spending Review. The PSA aims to:
"reduce the gap in productivity between
the least well performing quartile of rural areas and the English
median by 2006, and improve the accessibility of services for
rural people"
Public sector requirements are an important
element of demand in rural areas. Modern, high quality public
services to which the Government is committed will require the
use of modern communications networks, in both urban and rural
areas. The government is committed to investing over one billion
pounds towards providing key public services with broadband connectivity
over the next three years (see later in report). Connecting the
public sector to broadband could subsequently have a knock-on
effect in the local community, enabling broadband to be spread
more widely.
Over the past year Liberty Broadband (previously
Tele2) and BT announced the introduction of new demand registration
systems that enable customers to register interest in receiving
broadband services. In BT's case, once a set level of registrations
for an exchange has been reached, this triggers the upgrading
of the exchange to take ADSL. Todmorden in West Yorkshire became
the first exchange to reach the trigger level set by BT after
200 consumers expressed interest with their ISPs in receiving
ADSL services. A number of other exchanges, many in rural areas,
have now been upgraded or are being upgraded as a result of the
scheme. In December BT announced that it was streamlining the
registration scheme and in January that it was reducing the trigger
level on a number of exchanges.
In addition, community pressure groups are springing
up all over the country to convince suppliers that there is a
demand for broadband. Regional Government is also involved, with
the East of England Development Agency running a service whereby
people can register a demand for broadband on a website (see later
box).
From a number of pilots that have taken place
there is a strong indication that higher levels of participation
in broadband projects can be achieved if measures are taken to
build awareness and understanding of broadband at the same time
as infrastructure is put in place. The issue of demand is addressed
in many of the pilot schemes for supplying broadband to rural
areas, which are linked to awareness campaigns to show potential
consumers the benefits of broadband. Cornwall ActNow is a good
example of such a project.
Cornwall ActNow
The £12.5 million Cornwall ActNow project
was launched in April 2002 with the help of £5.25 million
Objective One funding. ActNow is an acronym for Access for Cornwall
through Telecommunications to New Opportunities Worldwide and
is a partnership involving the South West Regional Development
Agency, Cornwall County Council, Cornwall Enterprise, Business
Links, Cornwall College and BT who were appointed through an open
tender to be part of the public sector led partnership offering
the ADSL packages. Its ultimate aim is to provide a full package
of broadband start-up services for 3,300 small and medium sized
enterprises backed by a commitment from BT to a roll-out scheme
for the enabling of exchanges. The partners are committed to advertise
the scheme, build awareness in support of the subsidised broadband
package which also includes technical support. BT made a commitment
to "enable" twelve exchanges (ie upgrade them so they
can offer ADSL broadband connections). In the first nine months
of the project, nearly 3,000 businesses and households have taken
up the offer, and thirteen exchanges have been enabled in total.
BT estimate that similar rural exchanges would take fifteen months
to reach the same level of demand without the awareness building
and support provided by the project.
Evidence from urban areas does not necessarily
map directly onto rural areas, and we cannot automatically conclude
that the take-up rates will be any faster or slower in rural areas.
Broadband has the potential in rural areas to overcome geographical
issues such as access to markets for businesses and access to
services for individuals. There may be other differences in people's
willingness or ability to pay for a more expensive service that
will affect take-up. In order to gauge whether there are likely
to be obvious differences in urban and rural broadband usage which
should be investigated further, Defra has sponsored an informal
survey by UKVillages (see box below).
UKVillages survey
Defra sponsored an informal survey by UKVillages.co.uk
into the usage made of the Internet by 15,000 of their registered
site users. The survey received some 800 responses, with the responders
self-categorising themselves as rural or urban and the results
are available on http://www.ukvillages.co.uk/broadband. This survey
does not indicate a significant difference in the usage to which
the Internet was put as between urban and rural users. It is interesting,
however, to note what people are currently using the Internet
for, and the high percentage of individuals who are online but
are unaware if they are connected using broadband or not.
UKVillages is carrying out a range of projects
which demonstrate the potential for ICT to support rural communities.
In Gloucestershire it is working with the County Council to provide
an online support network for market towns which will allow posting
of information, sharing of best practice and discussion of policy
documents. In Cheshire UKVillages are working on a project to
provide websites on request for parish councils and, once the
project has achieved a critical mass of villages the intention
is to introduce mechanisms for sharing best practice similar to
the Gloucestershire project. These are important capacity building
projects which would be facilitated by wider availability of broadband.
— what provision already exists,
and what is planned
Currently more than two thirds of the UK population
is covered by a mass-market, terrestrial broadband solution, a
figure which is expected to rise significantly by 2005. Cable
modem services are available to over 40% of households (around
10 million homes), fixed wireless services to 12% and around 67%
of the UK population are connected to an exchange that provides
ADSL services. However, most of this provision is concentrated
in urban areas, as is demonstrated by the tables below which are
available in the UK Online Annual Report 2002 and in the second
annual report of the Broadband Stakeholder Group.
Broadband coverage in the UK, Q3 2002 (Source:
Analysys) [Please note: this chart can be found at the beginning
of the Committee's Report.]
Figure 2
| Technology | DSL
(Telephone line)
| Cable | Wireless
| Total |
Urban centres
(50% UK population) |
89% | 60% | 22%
| 95% |
Surburban centres
(25% UK population |
52% | 33% | 3% |
58% |
Market towns
(15% UK population | 21%
| 11% | 1% | 26%
|
Rural villages
(7% UK population | 6%
| 1% | 0% | 7%
|
Remote rural
(3% UK population) | 1%
| 0% | 0% | 1%
|
Overall
(100% UK population) | 61%
| 40% | 12% | 67%
|
Population (households) coverage by mass-market broadband by
area type, Q3 2002 Source: Analysys
There are a number of commercial initiatives looking at ways
to extend broadband access outside large urban conurbations, in
particular looking at developing technology to deliver a cheaper
solution to ASDL—through for example exploring the potential
of wireless. There are also ADSL initiatives—building on
the success of Cornwall ACTNOW, BT is running a project to bring
broadband to a selection of small rural exchanges such as Lyndhurst
in Hampshire through the Community Broadband Concept Trial.
For the Government, DTI is working closely with the RDAs
on innovative pilots through the £30 million regional broadband
fund. For example the East of England Development Agency has developed
the "Demand Broadband" pilot.
EEDA Demand Broadband Project
A £5.82 million funding package made up of resources
from the UK Broadband Fund and EEDA's own budget is now been channelled
into a programme designed to convince residents and owners of
businesses of the importance of broadband and persuade telecommunications
firms to consider supplying markets where it can be demonstrated
that there is a definite locus of demand.
The principles behind their proposed strategy are simple
"Minimise the cost of broadband delivery whilst maximising
demand for such services in order to provide coverage to areas
which would remain without broadband, under current conditions."
The two key elements of the action plan agreed by the DTI
in January 2002 are the Broadband Brokerage and the Connecting
Communities Competition.
The Broadband Brokerage is a website which contains a database
where companies, public sector organisations, communities and
individuals can register their interest in using broadband; a
resource explaining the use that can be made of broadband by organisations
of various types, based on real world examples in the region;
maps of where current points of presence are; a news page and
a lists of contacts.
The system identifies where community groups can be established
that become the focus for providing broadband to an area and when
the demand has reached a critical mass that broadband should be
deployed and subsequently Telcos can be approached.
There is also a brokerage service run by contractors on behalf
of EEDA to provide connectivity advice, a model for community
agreements and, later, to broker broadband deals between, for
example, community groups and internet service providers or telecommunications
companies.
The Connecting Communities Competition offers funding for
community broadband projects and aims to increase community awareness
of broadband, encourage the formation of local initiatives, the
members of which will act together in order to consolidate demand,
to test the market for broadband services and develop models for
deployment that can be rolled out. It is particularly aimed at
areas where the market is unlikely to develop broadband services
in the medium to long term
Local authorities are increasingly starting to exploit the
potential of broadband to deliver quality services to the communities
they serve. The November 2002 DTI sponsored report compiled by
Socitm (www.socitm.gov.uk) explores the extent of local authority
involvement in the implementation of broadband services. The report
also features a selection of case studies, including the Lincolnshire
County Council Two Towns project which is looking to use broadband
to support and develop rural business through an infrastructure
project based on extending the education broadband network.
It is important to gather information on the many projects
currently planned or in progress to extend broadband provision
into rural areas. Defra, DTI and the Countryside Agency already
have information on many of the projects which are in existence
or being set up. the Countryside Agency has commissioned research,
due to report in May which will look at best practice from a small
number of projects covering a range of partners, technologies,
and funding streams. Further information on developments in rural
areas will be pulled together by the UK Broadband Taskforce.
Wireless is a technology which has significant potential
to extend broadband coverage in remote rural areas. The Radiocommunications
Agency co-ordinates spectrum allocation for the Government. Several
bands are applicable for broadband use, and current developments
are detailed in appendix two.
— what obstacles there are to the provision of broadband
in rural areas
Broadband is available throughout the UK via satellite connections
but this is a relatively expensive option and there are some technological
drawbacks (see appendix one), although both price and technological
efficiency are likely to improve. Another option is to purchase
a leased line, but the cost of this means that it is generally
limited to medium and large companies.
The main obstacle to the provision of more affordable broadband
in rural areas is commercial. The initial investment required
to provide broadband by any technology other than satellite is
such that faster return on investment can be achieved in areas
of high population density than in rural areas. The size of the
problem should not be underestimated. For instance, in terms of
ADSL access via enabled telephone exchanges, BT has 5,595 exchanges
of which it has enabled over 1,000 and has told us it is looking
to enable somewhere in the region of 2,000 in total. A project
such as Cornwall ActNow has been very successful in building demand
and getting access in an area which would otherwise be unlikely
to receive broadband. But the total project cost is £12.5
million and while this includes very important business support
and demand building elements, the total number of exchanges activated
so far is only 13. Even if BT were to ASDL-enable all of its telephone
exchanges, some customers would still not be able to get broadband
internet access. This is because with current technology broadband
capability is only available within 5.5km of an enabled exchange;
Oftel estimates that 5% of customers connected to BT's DSL enabled
exchanges live too far from the exchange to obtain DSL broadband.
A major barrier to the extension of broadband to rural areas
is the so-called "backhaul" infrastructure—for
instance, enabling an exchange or laying cable to a location,
before individual connections and service provision. This is a
particular issue in rural areas where distances are long and density
of potential customers is low. But the Government does believe
there are ways forward: alternative technologies which have potential
to reduce the backhaul costs, exercises to aggregate the demand
that is available and to build demand, and the potential represented
in plans for public sector broadband connectivity.
Alternative technologies to the more established offerings
(ie DSL and cable in particular) are an important element of the
work which is why the £30 million broadband fund is supporting
projects to test new technologies which might have potential for
supporting rural areas. The Rabbit project in particular is looking
at enabling small and medium enterprises to connect to broadband
via a number of new technologies in areas not covered by cabled
solutions such as ADSL or cable.
Remote Area Broadband Inclusion Trial . . . RABBIT—The
aim is to promote the use of broadband internet to small businesses
and organisations in remote areas and to evaluate the effectiveness
of the available solutions. Several Regional Development Agencies
and Devolved Administrations are working together to share RABBIT
as a joint project and use a central team to implement the trial.
The overall aim is to stimulate the market and increase competition
as well as providing a publicly available information centre of
the available suppliers and technologies including price and performance.
The project is aimed at small businesses in areas that cannot
receive ADSL or cable modem solutions, but who are prepared to
try out the alternatives now available. The project team have
gathered information on a range of "ADSL equivalent"
solutions from different suppliers that meet the needs of differing
sizes and types of business. The project is progressing well with
579 applications approved nationwide so far.
There is exciting potential for using public sector procurement
to extend the reach of broadband into rural areas. The government
is committed to investing over one billion pounds towards providing
key public services with broadband connectivity over the next
three years, including:
— DfES plans to provide all primary and secondary
schools with a minimum 2Mbps and 8Mbps broadband connections respectively
by 2006;
— The National Health Service will provide all GP
practices with 256kbps connectivity, and all hospitals, Primary
Care Trusts and other Health Authorities with a minimum of 2Mbps;
— The Criminal Justice System will provide ICT infrastructure
across the six major criminal justice organisations—police,
crown prosecution service, magistrates' courts, crown court, probation
and prisons.
Properly managed, this could make a real difference to access
for rural businesses and communities:
Nine out of 10 rural households are within 2km of a primary
school and six out of 10 within the same distance of a secondary
school (source: The State of the Countryside 2002, Countryside
Agency).
It is envisaged that the activities of the UK Broadband Taskforce
to support and promote the aggregation of public sector demand
will result in an increase in broadband availability in rural
areas. Although the Taskforce will be concentrating on public
sector aggregation, it is hoped that this work will indirectly
benefit private enterprises and households. However, appropriate
legal structures, allowing public sector backhaul facilities to
be used to bring broadband to the private sector, would have to
be put in place if this was the case. In addition, the Taskforce
will be working closely with the RDAs to set up structures to
aggregate demand in an area and provide a solution for both public
and private sector. The RDAs are already committed to widening
broadband access and working on projects aimed at delivering this.
— Advantage West Midlands is committed to creating
a broadband backbone for the region and in June 2001 launched
"making the Connection", the first phase of delivering
affordable broadband to everyone in the region. AWM is working
on the creation of the West Midlands Broadband Company Ltd through
which regional demand for bandwidth and services will be aggregated
and backbone infrastructure provided to the rural areas
— The North West Development Agency is working on
Project Access (Advancing Communications for Cumbria & Enabling
Sustainable Services) which aims to deliver broadband services
to over 90% of residents and businesses across Cumbria. Additionally
the project will also facilitate the provision of a managed e-government
service connecting over 800 public buildings and potentially delivering
e-government services to over 245,000 households and 22,000 existing
businesses in Cumbria by 2005.
Defra , DTI and the UK Broadband Taskforce will be working
closely together in an endeavour to see that the proposed new
aggregation bodies take full account of the needs of rural areas.
What roles are played by Defra and the Countryside Agency in
relation to broadband, and what their relationship is with the
UK Broadband Taskforce and those in Regional Development Agencies
dealing with broadband
The Department of Trade and Industry (DTI) is the government
department with responsibility for broadband policy and co-ordinates
this across Government. The UK Broadband Taskforce is part of
DTI.
Defra's role is to rural proof broadband policy by helping
DTI ensure that the design and implementation of this takes particular
rural factors into account. A key feature of rural proofing is
that primary responsibility falls to the department itself—in
this case, DTI.
Defra's role is:
— to assist by making available the knowledge and
understanding that Defra and its agencies, especially the Countryside
Agency, have about the needs and opportunities in rural areas;
— promoting the need for rural proofing at Ministerial
and official level and working to ensure that all departments
discharge the commitment to rural proofing contained in the rural
white paper;
— to champion rural issues, to develop rural solutions,
and to persuade other Departments to take these on board.
The Countryside Agency is a Defra sponsored agency which
has a particularly important role in promoting innovation, experimentation
and research.
The roles of the DTI (including the UK Broadband Taskforce,
Defra and the Countryside Agency are described in more detail
below.
ROLE OF
DTI
In its role as policy lead on broadband, DTI engages in the
following activities:
UK Broadband Fund and relations with RDAs
DTI sponsors the RDAs and has provided the £30 million
UK Broadband Fund to the RDAs and devolved administrations. The
Fund is being used to develop innovative schemes and run pilot
projects to extend broadband networks.
Examples of Rural Projects receiving funding from the UK Broadband
Fund
The Buckfastleigh Community Network—Buckfastleigh exemplifies
present concerns about the "digital divide" and this
project will bring high speed, always-on Internet connection to
key facilities in the rural town of Buckfastleigh and to the community
as a whole. There are currently four hotspots—WAVE (the
Public Access Centre), the Watermans pub, the Church House Inn
in Holne (three miles distant) and G. S. Multimedia Studios in
a sizeable housing estate at the southern edge of Buckfastleigh.
The next stage of development is to share the lessons learnt by
publishing detailed documentation on a website. It is expected
that the site will be live in early February and will link into
www.ConnectingSW.net. To date, five jobs have been created directly
by the project, and one new business has been attracted to the
town. Five businesses have gained and are using broadband technology.
Remote Area Broadband Inclusion Trial . . . RABBIT—(see
earlier paragraph)
Eden Faster—The Eden Valley in the North West is unattractive
to private sector Broadband providers. This project will pilot
a technologically and commercially innovative solution to the
problem of roll out of broadband in rural areas where there is
also a perceived lack of demand. The project will develop and
test the required systems for a commercial service, establish
supply and demand, develop alternative last mile solutions, and
further promote Broadband benefits to businesses and households
in the region.
The Demand Broadband service run by the East of England Development
Agency (see earlier paragraph) and the Alston Cybermoor wireless
project in the North West of England (see later paragraph) also
received funding from the DTI Broadband fund.
Relations with Industry through BSG
DTI maintains strong relations with Industry, both directly
and through the Broadband Stakeholder Group. DTI representatives
sit on the BSG Executive and most of the various working groups.
The BSG produce a report and strategic recommendations to Government
on a regular basis which the Government takes into account in
developing future broadband policy.
UK Online for Business
UK Online for Business aims to advise and support SMEs across
the UK in terms of their ICT needs. For example, UK Online for
Business has produced a booklet aimed at encouraging SMEs to take
up a broadband service by highlighting the business benefits.
In addition, UK Online for Business has regional ICT champions
in each of the English regions providing support at a regional
level.
Business Links provide a further source of advice for SMEs,
as does the Small Business Service.
Broadband Content
DTI is currently undertaking a feasibility study into selected
broadband content pilots, with a view to determining the usefulness
of actually carrying out these pilots later in the year.
DTI is also jointly responsible for the current Communications
Bill with DCMS.
UK Broadband Task Force
The primary objective of the UK Broadband Taskforce is to
support and promote the aggregation of public sector demand for
broadband and to ensure that through such aggregation there is
an extension of broadband availability, particularly in rural
areas.
The secondary objective is to develop channels to the private
sector to explore the scope for the involvement of SMEs during
the process of public sector aggregation.
In order for the BTF to achieve the objectives three main
deliverables can be identified:
1. Secure the launch of a new broadband aggregation scheme
in every English region and support the launch of new aggregation
schemes in the devolved administrations.
The following six steps have been identified as the route
to achieving this deliverable
— Identify, evaluate, report on and support existing
aggregation projects.
— Create a regional broadband aggregation committee
in each English region to take the process of aggregation forward
and to involve sectors not yet participating such as health.
— Identify and report on the barriers which may
have limited the scope of such aggregation, or which may be inhibiting
further aggregation.
— Create a series of business models/business cases
for the aggregation of public sector demand.
— Produce a clear set of guidelines on what is permitted
and what can be done in aggregating public sector demand for broadband.
— Promote the aggregation of public sector broadband
procurement.
2. Develop channels to the private sector, particularly
SMEs, to determine their needs and the scope for their participation
in public sector networks. Co-ordinating such efforts with the
UK Online for Business Regional Advisers and other organisations.
3. Identify, evaluate and report on new technologies
or combinations of technologies to deliver broadband.
ROLE OF
DEFRA
When Defra was created in June 2001 it was given a new, specific
remit for rural affairs and a Minister to champion rural issues
across government. Defra's role is to assist the DTI by making
knowledge available about needs and opportunities, and to promote
the need for rural proofing at Ministerial and official level.
Its role is also to champion rural issues, to develop rural solutions,
and to persuade other Departments to take these on board.
The Rural White Paper sets out the Government's current rural
policy, including on broadband. Defra has a small team working
on broadband issues in rural areas although, like all of the rural
issues teams, it is relatively new. The broadband team has regular
contact with the DTI policy team and with the UK Broadband Taskforce
as well as with other government departments, public sector organisations
and stakeholders. In the next financial year, Defra will second
a member of staff to work with the DTI on rural broadband issues,
thus ensuring that rural considerations are kept at the heart
of policy making on broadband issues.
Both centrally and through the Government Office rural directors,
Defra has close links with the Local Government Organisation,
it has regular meetings with stakeholders and it has also met
a number of local authority representatives, community groups
and project managers. The Defra team is also involved with work
that Business in the Community is undertaking on rural ICT provision.
Defra has regular meetings at official level with the Country
Land and Business Association which has a strong commitment to
campaigning for greater broadband availability in rural areas.
The Minister of State for Rural Affairs has also met Sir Edward
Greenwell, President of the CLA, to discuss this.
Through this work Defra has gained valuable knowledge about
many of the pilot projects and initiatives which are currently
going forward to extend the availability of broadband in rural
areas. In October 2002 Defra invited a number of representatives
of stakeholder organisations including business and community
groups and individual practitioners to a "rural broadband
brainstorming" which focused on identifying the potential
of broadband for rural areas. The results of the brainstorming
were shared with DTI, including the UK Broadband Taskforce advisers.
Following the brainstorming, a discussion forum has been set up
which includes examples of rural broadband projects. The team
is undertaking further work to pull together information and research
into best practice in rural broadband. The Countryside Agency
research project (see: role of the Countryside Agency, below)
will be a valuable contribution to this. The information will
be posted on a website—we will consider with the Countryside
Agency and DTI the best place among the existing websites and
discussion forums to make this available.
Defra works with and through the RDAs on rural issues and
provides them with funding in the region of £50 million a
year for rural issues. The Minister of State for Rural Affairs
and Urban Quality of Life, Alun Michael, has discussed the needs
of rural broadband with the Chairs of RDAs at the meetings he
attends regularly, chaired by a DTI Minister. Contact at official
level with the RDAs on broadband has mainly been through DTI and
the UK Broadband Taskforce network. However, Defra officials have
discussed the rollout of broadband to rural areas with Yorkshire
Forward as part of their ongoing series of meetings with RDAs
to discuss the delivery of rural policy generally. In addition,
a representative of North West RDA attended the "rural broadband
brainstorming", discussed above. All of the RDAs have plans
for increasing broadband availability in their areas, and most
of these include elements to improve rollout in rural areas. Defra
will work with them to ensure that all of the plans are equally
ambitious for rural areas and, as a first step, Defra is seconding
a member of staff from April this year to work with Yorkshire
Forward on their rural broadband strategy.
Defra has established the Rural Affairs Forum for England
as a means of enabling rural stakeholders to ensure their voice
is heard at the centre of government and that they are able to
contribute to policy formulation. The Rural Affairs Forum subgroup
on Business and Enterprise is looking specifically at the broadband
issue. Defra also has frequent contacts with individual stakeholders,
organisations and industry groups.
As well as the ongoing contact, there have recently been
bilateral meetings at both senior official and Ministerial level.
Defra's Director General for Land Use and Rural Affairs has met
DTI's Director General, Business Group and DTI's Head of Communications
and Information Industries. The Minister of State for Rural Affairs
met the Minister of State for e-Commerce and Competitiveness and
agreed that the Departments would continue to work closely together.
A follow up meeting with the Minister of State for Employment
Relations, Industry and the Regions will take place in three month's
time.
ROLE OF
COUNTRYSIDE AGENCY
The Countryside Agency is the government's statutory advisor
on Countryside issues. And has been working closely with both
the DTI and Defra on rural broadband issues.
The Government has asked the Countryside Agency to monitor
the rollout of broadband in rural areas. It has work in hand on
a rural analysis of data about ICT and broadband which will form
the basis for information in its State of the Countryside reports.
It has recently commissioned research into best practice
in rural broadband solutions. DTI and Defra are represented on
the steering committee for the project The results will be made
widely available through an agency publication, a practitioners
seminar and the UK Broadband Taskforce website.
The Agency's Market Towns "healthcheck" helps rural
towns communities to identify strengths and weaknesses in the
area, and includes questions on broadband. The Agency's "Vital
Villages" programme can also help towards the cost of a broadband
public internet access point.
What alternatives to broadband exist or are being developed
that might be of particular relevance to rural areas?
A number of different technologies are available to deliver
broadband, and detailed information on these is given at Appendix
one. It should be stressed that advances in technology are constantly
taking place and it is impossible to predict with certainty how
these will affect the market. However, from the rural perspective,
the most interesting technologies currently seem to be:
— ADSL—work being done on mini-DSLAMs to reduce
the cost of enabling exchanges, and technological advances to
increase the distance from an enabled exchange at which broadband
is available.
— Developments in satellite technology to overcome
latency problems and bring down prices.
— Wireless solutions, particularly for community
networks.
Alston CyberMoor
In the rural community of Alston on the eastern edge of Cumbria
(population 2,240), the Northwest Development Agency is contributing
funding from the UK Broadband Fund in excess of £100,000
to the Alston CyberMoor project, which aims to provide broadband
connections to the majority of homes and businesses within the
Parish. This project will test the viability of using licence-exempt
spectrum and builds on an existing Wired-up Communities project.
The project has so far delivered several broadband connections
and recorded many expressions of interest.
Department of Trade and Industry
Department for Environment, Food and Rural Affairs
7 March 2003
APPENDIX 1
INFORMATION ON TECHNOLOGIES
A number of broadband technologies are currently available
within the UK, with a wide range of performance and prices. No
single technology is applicable for the whole of the residential
and business markets—large corporate bandwidth requirements
will need something different to low-usage residential consumers.
The Government has a technology-neutral approach to broadband.
DSL
DSL technologies operate over the existing copper infrastructure
without disrupting the telephony service. A number of DSL technologies
are currently available:
— IDSL—ISDN digital subscriber line.
— HDSL—high bit-rate digital subscriber line.
— SDSL—symmetric digital subscriber line.
— ADSL—asymmetric digital subscriber line.
— VDSL—very high bit-rate digital subscriber
line.
All are digital modem technologies that exploit the physical
transmission capabilities of copper-pair links[1],
to obtain higher data rates than traditionally available over
analogue modems.
The most popular DSL technology for mass deployment in the
UK is ADSL. In order to offer ADSL, the local telephone exchange
has to be upgraded and then integrated with a DSLAM that combines
the data streams from many users into larger data streams suitable
for transmission over the backbone network. An ADSL modem and
splitter (to separate voice) are required at the customer premises.
Data rates are heavily dependent on the length and quality of
the copper local loop, but downstream rates are higher than those
dependent on upstream.
Approximately 5% of people served by any exchange are unable
to get ADSL service due to the distance they live from the exchange.
The boundary of service in the UK is 5.5km from the exchange.
CABLE MODEMS
Cable modems enable two-way Internet access over a cable
TV network, alongside the TV distribution. Cable TV itself is
at different stages of development around the world, and its role
as a delivery mechanism for high-speed IP varies accordingly.
The major cost to operators of rolling out cable modems is
that of upgrading their networks to have two-way capabilities.
This is especially expensive for older and more traditional cable
networks (over 15 years old), designed using a "tree and
branch" principle. Such costs would be prohibitive, but the
arrival of digital TV over satellite, which will offer many more
channels and the potential for interactivity, means that cable
operators will be forced to upgrade their networks to be able
to remain competitive with satellite operators. In this respect,
digital TV acts as a spur for cable modem development. It should
also be noted that the UK cable networks are not as old as many
of their European equivalents and so the cost of network upgrades
will be lower than in many European countries.
Cable modems have limited upstream capabilities and are a
shared medium, which reduces their attractiveness to business
users. However, they are well suited to customers requiring high-speed
access without the need for large file uploads, and for this reason,
are targeted primarily at certain types of residential user.
FIXED WIRELESS
ACCESS
FWA is available in two main frequency bands in the UK:
— 28.5GHz (LMDS) spectrum, which offers high bandwidth
but with a short range (two-five km) and the requirement for line
of sight.
— 3.5GHz spectrum, which offers lower bandwidth
(comparable with ADSL) over a longer range with no requirement
for line of sight.
A further frequency band (3.4GHz) will shortly be made available
by auction.
Licence-exempt band at 2.4GHz may also be used for fixed
wireless access.
LOW-SPEED
LEASED LINES
Leased lines are ubiquitous in the UK. As the supplier with
significant market power BT must provide low-speed leased lines
offer a bandwidth of 2 Mbps or less on request. Leased lines are
specified by the data rate they provide, regardless of the physical
means of providing the line—fibre, copper, microwave link,
etc.
A typical leased line consists of two tail circuits connecting
the two customer sites (one may be another operator's POP) to
their local exchange and a transit section connecting the two
exchanges (over the supplier's network). Depending on the speed
of the leased line, the tail circuits may be provided by HDSL,
microwave point to point, fibre or other technology. Where BT
incurs significant construction costs to provide the tail circuits
they may recover these via ancillary charges.
FIBRE
Fibre to the building offers a high-speed connection to the
customer site, but the operator incurs significant expense in
running the fibre from their closest fibre node to the site. The
further the distance to the fibre node results in a greater expense
to connect the customer. This resulting charge will typically
be passed on to the customer.
The cost of building fibre to the building tends to ensure
that fibre is only available at large sites with a critical need
for high-speed data and a correspondingly high spend, or smaller
sites with high data requirements situated close to an existing
fibre node, ie located in a business park/urban centre, or close
to a large site.
SATELLITE
There are a number of possible methods for implementing two-way
IP access on satellite systems. Corporate customers are using
existing geostationary earth orbit (GEO) VSAT systems for their
private networks, some of these being optimised for IP. Satellite
operators wishing to target the residential and SME market are
using existing Ku-band (12GHz-15GHz) GEO satellites, deployed
for TV distribution, and renting transponders for Internet access.
There are systems already launched in the Ka-band (20GHz-30GHz)
to provide two-way services. Assuming a peak, simultaneous access
rate of 10% of users and 400 kbps per user, it is possible to
support 2,000 users per transponder supporting a channel carrying
80 Mbps.
UMTS
3G mobile offers broadband access in a mobile environment.
As a potential solution for business sites/households requiring
fast Internet access and other bandwidth hungry services, it has
disadvantages:
— bandwidth is limited—3G is unlikely to deliver
data rates of over 384 kbps
— price per Mbyte of data transmitted compares poorly
to fixed networks.
3G is expected to deliver new and interesting services to
individuals as well as providing fast Internet access on the move
and so is expected to gain a large number of subscribers. The
key attraction of these services will be the ability to access
them anywhere, via a high bandwidth device enabling them. 3G is
not, however, a true alternative to fixed-line broadband access
to the home/office. The speed and cost of transmitting data over
3G means it is unlikely to be an ideal technology for services
such as video on demand.
POWER LINE
This technology involves running broadband along next to
utilities, such as via electricity lines. Technical trials at
bandwidths of up to 2 Mbps in Crieff and Cambletown run by Scottish
Hydro-Electric have proven successful and the company is planning
on running market trials at two locations in Scotland and England.
APPENDIX 2
3.4GHz
Broadband wireless technology at 3.4 and 3.6GHz will provide
always on, fast internet access at similar data rates to ADSL
services. It will be most suitable for small and medium sized
businesses, and the top end of the domestic market.
Licences for 3.4GHz will be made available through an initial
auction and then, if licences remain, will be available for at
least a further year. Details of the award process include:
— 15 regional licences across the UK with one licence
per region;
— reserve prices for licences to be set at £300,000
(Greater London, Midlands and Northern Metropolitan regions) and
£100,000 (all other licences);
— staged payments for licences;
— no-roll out obligations to be included in licences;
— no service restrictions on licensees.
The Government is also looking to make additional spectrum
available for broadband in the 3.6 GHz waveband. The proposals
for the use of spectrum at the 3.6GHz waveband for broadband services
will consider how much spectrum to use and how the licences will
be made available, including a proposal for a single national
licence.
The latest information on our licensing plans is available
at http://www.radio.gov.uk/topics/pfwa/pfwaindx.htm and www.radio.gov.uk/topics/pfwa/pfwaindx.htm.
28GHZ
RA carried out an auction for 28GHz broadband wireless local
loop licences in November 2000. We offered 42 licences (three
in each of 14 regions). The licences held are:
— three in Greater London;
— three in Greater Manchester;
— three in West Midlands;
— two in Northern Ireland; and
— four in northern England and Scotland.
The licensees are at various stages in deploying their networks:
in particular, Your Communications is offering broadband to corporate
organisations in the West Midlands, Greater Manchester, Yorkshire
and the North of England, including Cumbria. A second award process
closed on 14 October 2002 without any more licences having been
awarded.
RA published a consultation document on 15 October 2002,
proposing a new award process for unsold licences. After considering
the responses, the Government has concluded that the Agency should:
— modify the "purpose of use" condition
within new and existing licences, to allow the deployment of any
fixed service;
— remove the "use it or lose it" condition
within new and existing licences; and
— consider offering licences in Licence Area Three
on the basis of pre-determined areas (eg county licences), or
by operators nominating the areas they want, or by licensing individual
base stations.
Smaller licence regions will be discussed at the next BFWA
Consultation Group meeting, which will be held at the Agency's
HQ on 4 March 2003.
The Agency will not, however, apply the minimum path length
policy to 28GHz licences. The award process for these licences
is planned for this summer.
OTHER BANDS
The Wireless LAN Advisory Group (WAG), a recently established
advisory body to RA, will address technical, policy and standardisation
issues regarding the use of spectrum to provide mobile/nomadic
WLANs and short-range fixed broadband point-to-multipoint communications.
These services will cover a range of frequencies and technologies.
At present it is considering the bands 2.4GHz (2400 to 2483.5MHz)
and 5GHz (5150 to 5350MHz, 5470 to 5725MHz and 5725 to 5875MHz).
2.4GHZ
The provision of commercial telecommunication services is
now permissible in this licence-exempt band.
5GHZ
Licence-exempt applications such as radio local area networks
(RLANs) are intended to operate in a number of frequency ranges
between 5150MHz and 5875MHz. These ranges are also under consideration
for the provision of FWA services using RLANs.
In September 2002, RA published a consultative document on
the proposed Consolidated Wireless Telegraphy Licence-Exemption
Regulations; the consultation closed in October. The Regulations,
which will come into force on 12 February 2003, exempt low-power
RLANs for both public and private use in the 5GHz band A (5150
to 5350MHz) and band B (5470 to 5725MHz).
As there are already users in band C (5725 to 5875MHz), sharing
studies must be completed before this band can be released.
1
Links beyond the 4kHz band used for POTS (Plain Old Telephone
System).
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