What to do with 100 million Pounds

Thursday, December 1st 2011

Really 100 million Pounds is a huge amount of money. That much amount is going to be shared by ten cities in the UK for the rollout of superfast broadband. At the same time Australian Government is investing A$27.5 billion in its National Broadband Network.

The Chancellor did not mention anything about this 100 million Pounds which was covered in National Infrastructure Plan 2011. This is in addition to the 530 million BDUK funding for Urban broadband. The aim of the funding is to guarantee a 2 Mbps Universal Service Commitment and all local authorities will make sure that 90% of properties and businesses are provided with a superfast broadband connection. It is announced that between 2015 and 2017 a sum of 300 million Pounds would also be made available. The speed target for the cities is 80 Mbps to 100Mbps which is higher than the superfast definition used by BDUK.

Out of the ten cities which are going to share the 10million Pounds, the names of four cities are made known. They are the four national capitals namely London, Belfast, Cardiff and Edinburgh. These four cities jointly have a population of 9 million and currently Virgin Media and Openreach provide widespread superfast services to these cities. With in the next two years majority of cities in the UK would be enjoying the benefits of superfast broadband. The main aim of this Government investment is to make available the benefits of superfast broadband to businesses which situate in those part of the city where superfast broadband service is not available. In these parts of each city firms like Virgin Media and Openreach were reluctant to invest.

Usually in cities the question is not about the availability of service but about the availability of affordable service. For example, for 5000 Pounds in Cardiff, an 80 Mbps guaranteed service across a 1Gbps fibre can be installed. The monthly rental would be 2,400 Pounds. This may seem expensive but at the same time the 80 Mbps is guaranteed and if the businesses utilized this bandwidth 24/7 there won’t be any problem. The cost would be much more affordable if an Ethernet service is shared between 5 or more businesses in the same building. The same thing if provided in a rural area, the installation cost would be 8000 Pounds and the monthly rental would be 3700 Pounds.

It is believed that firms like CityFibre and Geo Networks are competing for this extra investment and they would provide fibre to the properties. The amount allotted to is so meagre that it would be sufficient only for a FTTC solution where a cabinet may serve 50 to 100 premises enabled for VDSL2 for about 20,000 Pounds to 40000 Pounds.

In the opinion of Broadband UK, filling the superfast broadband gaps in the cities would give the country the look of a modern connected country. At the same time it is to be considered when firms like Fujistu say that sum would not go higher had it been planned for a quality solution outside the cities in Scotland. In that case this investment would be only widening the Digital Divide. In fact one of the aims of this investment is to provide broadband facilities to business at their present place of functioning and not to attract them to cities. Overcrowding of firms in the cities of the UK is already troubling the authorities. In order to avoid over crowding and to promote migration to villages the best policy that the Government can take is providing superfast broadband facilities to firms in the rural areas.

The National Infrastructure Plan revealed that it is working to produce a draft which will enable the local areas to have access to the European Regional Development Fund. This will enable them to secure additional fund to invest in broadband to the tune of 100 million Pounds. The Plan anyway did not make any mention of any plan to secure funding from the 8 billion Pounds that EU set apart for enabling countries to meet the 30 Mbps for all by the year 2020.

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