Ministry of Fun builds crack team to juice up bumpkin broadband The Department for Culture, Media and Sport has assembled a crack team of Whitehall and BT bods to speed up the deployment of broadband to rural areas. A pilot scheme will be be tested on bumpkins* in Norfolk after the county chose BT as its preferred bidder for a £41m contract to bring faster net connections to the region. …
My home is inside the M25 connected to fttc exchange, but I ain't got it. Nothing much is going to happen till somebody works out how to break up the BT monopoly. This even though one cynic told me they make a pile out of fttc from flogging the surplus copper - anybody know the figures?
I don't think they are a monopoly - there's a company called Virgin who have quite a lot of access network across the country and companies like Colt and C&W who also have a fair amount in big cities.
The slow rollout out is down to finance, and it doesn't matter who is doing the work, those finances remain the same. The amount people are prepared to pay for high speed broadband doesn't justify the expense of installing it in anywhere but the most densely populated areas - and even then far fewer people are taking it up than expected. Apparently there's a recession on or something.
That puts anyone rolling this kit out in a difficult position. Banks won't lend you the money to do it if they don't think you'll be able to pay them back with interest. If BT price to make a return in a reasonable period (say 3 years) no-one would want to pay the £100 a month it would cost. If they price to make a return over 10 years or longer the competition will cry foul as it then becomes very, very hard for them to compete - and you run the risk that your network needs replacement or upgrade before the ten years is up. This all sits against a background of declining prices for broadband, meaning that the financial case to do this is continually weakening.
BT's response then, and the response of any rational company, is to only roll this out where they are fairly sure of a return. Would Tesco open a supermarket where there are no customers? If society deems it worthwhile to roll it out in other places they'll do the work but someone else has to offset the risk or loss. We could achieve the same by putting a Universal Service Obligation (USO) on broadband, but that would double the cost of broadband at least, as city dwellers subsidise the more rural - and if the USO was applied to BT only it would just price them out of the market.
The sad thing is for all that people don't like the monopolistic situation with BDUK few people seem to ask why. Here's my thoughts on it:
If BT is currently doing a bad job.
If BT is currently overcharging.
If BT is currently making too much money off connections.
..then why aren't competitors stepping forward and snatching business away from it? Everyone and their dog could bid for these contracts. As far as anyone knows they were open and free. Only BT has won them. Is that BT's fault? Should we have tried to help out the other players?
My explanation is that it really is as bloody difficult and expensive as BT say it is and only BT have the resources and ability to attempt it for the sums on offer. If more money was on the table perhaps competitors would have stepped up but do we really want to pay extra for this just so we can say we have competition? Surely the whole point of competition is to drive prices down.
One of the preconditions of a 'free' or 'competitive' market is that the barriers to entry are low. Eg, growing potatoes and selling them is something pretty much anyone can do. Putting fibre to the home isn't going to be easy to get into, so 'market' solutions are doomed to fail; all that happens is the incumbent monopolist gets a subsidy.
"so 'market' solutions are doomed to fail; all that happens is the incumbent monopolist gets a subsidy."
Which they'll need anyway, monopoly or not, unless the smock-wearers want to pay either location specific actual costs, or a blended "rural" cost to cover the circa £5-10k per property that is needed.
You need a big field to grow enough potatoes to make any money out of it and they tend to be a bit expensive. Add in some fertiliser, a tractor, some buildings, some way of transporting them to market - and it looks as though the barriers to entry can be substantial in all markets.
The broadband problem isn't really about barriers to entry per se. Lots of companies have expertise in networking or digging up roads or doing stuff in customers' homes. It's easy to imagine one of the former utilities having a go.
The inescapable problem is that the return on investment is poor - and the small return that is available is risky because market price continues to decline and because with a long payback period the chance of regulation adversely impacting that return is high.
Would BMW be willing to open a new Mini factory if prices were declining so fast that they'd be below cost before you've finished paying for your factory, and if there's every chance a regulator might tell you that you also have to use your factory to build Polos that you have to sell to Volkswagen for pretty much the same as they cost you to build?
Stepping back from the specfics, it looks like the market is operating effectively and that Virgin and BT have both realised that returns can only be made in affluent, densely populated areas - meaning that's the only place they'll go. We also tend to forget mobile broadband which increases competition. The only way to achieve full national rollout is to do it on a monopoly basis which removes the investment risk (hence, this is how we built the telephone, electricity, gas, radio and TV broadcast, water and drainage networks) or subsidise private companies to do it for us.
You reckon? Sadly unlikely, since the money hoovered up wouldn't be hypothecated to technical uses, but would be merely used to hold the government's colossal borrowing programme at its current rate (which is currently running at borrowing an additional £330 million pounds each and every day).
..with your use of the pejorative "bumpkin" term, you bunch of 1970's, bullying, burning cross tossing bigots.
Ah, on the other hand, who cares? Those bothered, go outside and breathe in the air. Hurry back in though, the infamous "Max as Jimmy Savile" episode of the Tweenies is about to start!
BDUK roll out in Wales is a joke, the first phase of funding all went to Labour voting areas... funny that... especially as many of them already have 24 meg ADS2. Other areas with next to no ADSL2 were left out despite the alleged prioritizing of area containing Enterprise Zones.
As ever the needs of communities and citizens take a second place to the party political patronage n British Politics - Its so corrupt!
"BDUK roll out in Wales is a joke, the first phase of funding all went to Labour voting areas"
Surprise surprise. But one thing you can say about the crooks and arseholes that comprise the Labour party, they at least try and look after their voters (and prospective voters). So lettting in two million immigrants because they are reckoned more likely top vote Labour. Or the "impossible to revoke" contract for two aircraft carriers that we can't afford, designed that way to secure Labour votes in Glasgow, Barrow, and other related places.
Meanwhile the Tories favour the rich (eg doubling "entrpreneur's relief" and making the change retrospective, so that if you've already made £5m, you can earn another £5m without paying much tax), ignoring the fact that they don't have enough votes to make a difference.
I have to say, in terms of cynical strategising, the Labour party do far, far better than the Conservatives.
Being one of the Norfolk "Bumpkins" (we perfer the term Norfolk Dumplings) I would like to register my disaproval of this term!
I wholeheartedly embrace this speeding up of broadband speeds as it will enable me to pursue my interests by reading "Tractor Fanciers Weekly" and "Bootiful Norfolk Turkey's" (tag line 'They Love to Gobble") at a much more speedy pace and also encurage national treasure and local boy made good Stephen Fry to vist home to indulge his digital lifestyle more often!
Errmmmm... On the other hand!!
The choosen icon, becuase he looks like Good ol' Norfolk Boy!
As a 'norfolk bumpkin' (certainly not a 'dumpling') I would suggest that having anything other than the centre of Norwich getting upgraded to the digital equivalent of a B-road will be surprising ... BT and the council will have minimal outlay delivering to a few, highly populated areas (plus the politician's north norfolk holiday homes) to give favourable coverage statistics without the cost of actually delivering to the 'rural areas'. Pigs *will* fly when my overhead wet-string gives decent broadband ...
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