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Business internet ofcom Regs

Business Rates

In the Autumn Statement, Chancellor George Osborne gave small businesses an early Christmas present with some relief on business rates. Welcome news, I am sure, for all of our high streets and favourite independent hostelries.

However, when you start to look into the rates regime in telecommunications, things starts to get a little more confusing. Yes, they are due on our data centres and our offices and whatnot, just as we would expect them to be if we were a bank, a pub or a newsagents. But they are also due on fibre and ductwork. Worse still, one council or unitary authority (specifically one in England & Wales and one in Scotland) is often the beneficiary of the whole liability regardless of its potentially national coverage, which defies logic, but that’s a story for another time.

I have a problem with how fibre and duct can be rateable in the first place. Keeping the receipts and expenditure method of valuation (otherwise known as the “profits basis” out of it for a minute), to my simple mind, a factory has a rates liability – i.e. the bricks and mortar, but the machines inside don’t attract it. After all, tax is levied on their product (value-added tax, for example, or other duties in the case of alcohol) and the company producing them is also levied taxes on their profits (corporation tax, or income tax for a sole trader). It would seem somewhat akin to “two bites of the cherry” to tax the machines…… of course that argument could apply to the building itself as well, though I would suggest that as business rates are meant to pay for local services, a building is a fairer demarcation than counting widget machines for example; one could say fairer than some duct in a field.

Anyway, that can all be debated ad nauseum. What I want to get across here today is that when we talk about incentives to develop telecommunications, say 3G coverage to address those so-called “not spots”, or dealing with the issue of slow speeds in rural broadband, one of the critical factors facing a telco in deciding whether or not to build masts, unbundle exchanges (those taking BT Openreach Access Locate space have to pay a room licence fee, which is code for “their share of the rates bill”) or dig up fields to lay fibre out to a rural community with dial-up speeds on their ADSL is how much that activity will increase their rates liability. Seeing as fibre in rated on a sliding scale per pair per kilometer (contiguous in your network) basis, and given the distances that can be involved, it can soon add up.

We have high profile government initiatives such as BDUK, to deliver rural broadband, but I wonder…… instead of spending to “stimulate commercial investment” for telecos to expand into these areas, how much could be achieved through some simple manipulation of basic levers such as business rates? After all, if it were profitable for a telco to expand into such an area (be it a 3G mast or high speed broadband), an economically rational profit maximising entity would’ve done so already. One can only assume the investment appraisal delivered a negative net present value…. perhaps, just perhaps, it may have swung the other way if the rates regime in telecommunications was different.

As ever, very interested in all of your views.

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broadband Business

Gigaclear Set to Show UK How to Build FTTP Broadband Network at Hambleton, Rutland

Matthew Hare of gigaclear feeds fibre into the UK network infrastructure in HambletonThe sleepy village of Hambleton lies in the heart of the old county of Rutland. In the winter Hambleton, surrounded by Rutland water, can feel quite a remote place. The wind whistles eerily across the choppy white topped waters of the lake and the snow can drift deep on the single road that leads into the peninsula. It it not unknown for the village to be cut off from the outside world and this has indeed happened during the harsh winters of recent times.

Fortunately when this does happen the foolish, unwary and now stranded individuals are able to seek refuge by the warmth of the log fire and bask in the friendly welcome that is characteristic of Hambleton Hall. The Hall, “One of England’s finest country house hotels” has luxury overnight accommodation (a snip at between £245 and £360 a room) and their Michelin starred chef will assuage the needs of the hungriest. To round off the perfect enforced stay the Hall has free wifi for all guests.

Of course how fast an internet access guests will get from this wifi is another thing – Hambleton really is in the middle of internet nowhere.

This is all about to change

Categories
broadband Business

1Gig FTTP Broadband Coming to 24 Rural UK Communities #NextGenUs #DigitalBritain

This morning Community Interest Company (CIC) NextGenUs announced that it has secured £10m funding to provide rural fttp broadband access to up to 10,000 homes across 24 communities in the UK. This is private cash unassociated with the government’s Big Society initiative that uses (or should I say is trying to use) BDUK as a delivery mechanism.

NextGenUs is the organisation that provided 100Meg Fibre To The Premises delivered on a 1Gig bearer to Ashby de la Launde in Lincolnshire. The model is to light up broadband Notspots with the cooperation of the community using a local POP known as a Digital Village Pump. Community participation lowers costs and removes barriers such as the negotiation of wayleaves and planning permissions.

This funding is important because it will allow NextGenUs to demonstrate that it can deliver connectivity on a scale greater than a single community. Even 10,000 homes however is pretty small beer. The real issue is how can community based organisations deliver to the one third of UK homes that currently fall into the category of broadband impoverished.

For rural areas there is a lot riding on the NextGenUs model because the alternative is to leave it to the inefficient combo of government assistance and incumbent self interest. The former provides a future proofed solution with the interest of the community at heart but has uncertain scalability and the latter would eventually deliver a compromise.

We should all be offer our support to NextGenUs. Theirs is truly the Big Society at work.

 

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Business ofcom Regs

Ofcom hits BT Wholesale in the rurals #DEAPPG #FinalThirdFirst

Ofcom yesterday proposed significant reductions in the prices that BT Wholesale can charge internet service providers (ISPs) in parts of the country where it is the sole provider of wholesale broadband services – mainly in rural areas.

The proposed price reductions are between 10.75% and 14.75% below inflation.

As an ISP and BT Wholesale customer I say good oh! I’m not quite sure that it will achieve the effect Ofcom think it will achieve though. Yes we might find retail ISPs lowering their prices marginally for customers in these areas. Consumer ISPs already charge rock bottom prices so a cut of 15% off a low number won’t make much difference.

Also ISPs buy bulk backhaul bandwidth from BTW. This is not specific to particular exchanges or locales. For example Timico’s bandwidth comes into two docklands locations from all our customers all over the country. We would not be able to say “this customer gets more bandwidth because he is one of the lucky ones living in an area with reduced costs.

A big chunk of the cost is in the bandwidth used so whilst a reduction in line rental is good a reduction in bandwidth costs would be better. We may find that competition does drive down the cost to the end user a little in these cost reduced areas but there is also a fair chance that ISPs will just pocket the additional margin thanks very much and maintain homogenous pricing policy across the whole country. More packages means more complexity and ultimately more cost.

This many not necessarily be a company line here but it’s what I think will be the overall outcome. I might be completely wrong.

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broadband Business

Rural Broadband Replacement – Broadband in a Bottle #trefandrory

I hope that someone gets my…I hope that someone gets my…I hope that someone gets my broadband in a bottle.

You heard about the tref and rory pigeons versus rural broadband race. Well not everyone has access to a pigeon. However everyone can get hold of a USB memory stick and put it in a bottle with a cork in it. The idea is you load your content onto the memory, put it in the bottle, cork it and throw it into the stream running along the side of the cowfield.

In due course the bottle will make its way downstream and no doubt be picked up by someone who will open it and take out the memory stick.

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broadband Business

Pigeon Versus Broadband Publicity Statistics #trefandrory

The pigeon versus broadband race last week generated a phenomenal level of interest. It must be said this is an illustration of the power of the BBC – although of course the fun nature of the event itself must have helped.

The race, which involved near constant media exposure throughout the day, was covered on BBC Radio 2,3,4,5, BBC1 News at 6.30 and 10pm, BBC Scotland, Humberside, World Service and Lincolnshire (they are the only ones I know of). The first radio interview was a 6.15 am and the last, Radio 5 Live, was at around 6.50pm

It was the 5th most popular item on the BBC website on Thursday – by 6.18pm it had had 92,357 story views, competing mainly with the Pope’s

Categories
broadband Business

Rory and Tref Pigeon Versus Broadband Race – The Highlights

Short amateur video of the Rory and Tref pigeon versus broadband stunt from last week.

Categories
broadband Business internet

Rural Broadband: The Tim Padfield Interviews

This week saw a series of interviews by Tim Padfield on BBC Radio Lancashire – all focussed on highlighting the problems caused by there being no access to broadband internet connectivity in rural areas in the UK.

I won’t make specific comments but I’m sure there will be plenty of people wanting to do so on this post.

1 Christine Conder
Christine Conder of Wray Community WiFi Network says a third of the country can’t get decent broadband and on this basis this area should be first on the list for the NGA rollout. Talks about Final Third

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Business media

BBC interview regarding rural broadband

Click twice on the word tref below to hear an interview with Rod Whiting on the BBC Radio Lincolnshire breakfast show on the subject of rural broadband and the Digital Divide.  Rod broadcast his breakfast show from different towns around the county last week and was surprised to find out how difficult it was to find internet connectivity to upload material back to base in Lincoln.

tref

PS sorry about the intro bits – adds a bit of colour anyway:-)

Categories
Business media

Rural broadband on the BBC news this morning

The BBC has picked up a rural broadband news item this morning with another community rolling out fibre, this time with a 20Mbps broadband service, presumably with a bigger backhaul than the 2Mbps that serves Wennington and Wray (see posts from 2 weeks ago).

I suspect the media is building up for more coverage when the Digital Britain Report is released in mid June.  There seems to be some disagreement in Cumbria as to the efficacy of the investment already made in the area. Whether individual communities already get coverage or not is somewhat a moot point really.

I think the issue that is quickly going to overtake us is the adequacy of the  “up to 2Mbps” speed being bandied around as a target by Government as a Universal Service Obligation.  Many city dwellers already have access to 40 or 50Mbps and with BT’s Fibre To The Cabinet trials about to start this figure will become very much the standard to aim for, unless you live in a rural community that is.

Whilst BT CEO Ian Livingstone maintains that 2Mbps is good enough for most people’s uses, experience in the Far East, where high speed internet access isn the norm, have shown that people’s online behaviour does change as faster speeds become available. They are more likely, for example, to watch High Definition video online.

This is all going to add pressure to ISPs’ networks but I do believe that the UK is being shortsighted in not considering a ubiquitous Next Generation Access fibre network from the off.