The Knowledge Base

The Knowledge Base is an online resource that aims to summarise the extensive information around next-generation broadband in the UK, to assist those developing broadband projects.  It builds on INCA's very successful Beyond Broadband guide published in late 2010.

There is a commenting facility at the bottom of each page.  Feel free to provide constructive comment on any aspect of this publication; help us to identify gaps in the content, update information, correct errors and create clarity whereever possible.

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Technology

In this section, we define basic broadband terminology, and describe the different technology options for building next-generation local access networks, along with the strengths and weaknesses of the different aproaches.  We also highlight some of the technical issues around network installation and delivery of services to the end user.

Broadband projects rarely fail because of technology choices; they fail because of poor project management.  Nevertheless, choosing the right technology for a broadband project is vital because it determines the capabilities of the customer's connection, the ease and potential for future network upgrades, and has a huge influence on the project costs.

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Technology Primer

This page will help you distinguish your bits from your bytes.

For more technology definitions, see our Jargon Buster.

What is broadband?

When broadband first appeared in the UK in the late 1990s, it was characterised by two things:  it was always on, allowing customers to surf the internet and make phone calls at the same time, and the speed of data transfer was faster than that of dial-up modems.  Today the term broadband has become synonymous with always-on access to the internet, regardless of the technology used.

One caveat: although the term broadband is becoming increasingly diluted, it usually refers to the affordable internet access offered to consumers and small businesses; not to bespoke, high-capacity internet connections for the enterprise market.

What is superfast broadband?

Superfast broadband originated as a marketing term without a strict definition, but Ofcom is now using it to describe broadband speeds greater than 24 Mbps.  The significance of 24 Mbps is that this is currently the maximum possible speed for broadband over existing copper telephone lines.  However, it's worth noting that BT is marketing all of its fibre-based broadband products as "superfast", with a lower speed limit of just 5Mbps.

What is next-generation access?

The majority of homes and small businesses in the UK currently receive broadband services through the access network that connects them to their local telephone exchange via a twisted-pair copper cable.  The term next-generation access (NGA) describes a significant upgrade to the access network.

In NGA networks, some or all of the copper in the network has been replaced with fibre.  Since fibre is capable of sustaining much higher data transmission speeds over longer distances than copper cable, NGA is the key enabler for faster broadband.

It is generally accepted that NGA includes fibre-rich infrastructure and technologies such as fibre-to-the-cabinet (FTTC), fibre-to-the-home or premises (FTTH/FTTP) and upgraded cable TV networks.

There has been some confusion about the difference between broadband and NGA.  Broadband is a service that allows a connection to the internet; NGA is the physical cables and equipment to deliver the service.

Bandwidth, bits and bytes

The performance of a broadband connection is most often described by its speed, or bandwidth.  This is the amount of digital data that can be transmitted in a given time, measured in bits per second.  A bit is the smallest unit of information, either 0 or 1, in the digital language of computers.

Dial-up modems connected at 56 kilobits per second (kbps).  Today the average download speed of broadband connections in the UK is nearly 100 times faster at 5.2 million bits per second (megabits per second or Mbps), according to a study carried out in May 2010 by Ofcom with technical partner Samknows.

The total quantity of data, like hard disk capacity, is measured in bytes rather than bits, where a byte equals eight bits.  A typical email is just a few thousand bytes (kilobytes or kB), while standard quality BBC iPlayer requires a continuous 800kbps of throughput, so watching a 30 minute programme would consume 180 million bytes (megabytes or MB) of data.

A number of internet service providers (ISPs) in the UK have introduced bandwidth allowances, which place an upper limit on the total amount of data consumed during the month, typically 10 billion bytes (gigabytes or GB) for any entry-level broadband account.  Consumers exceeding their allowance may incur penalties, such as a surcharge on their bill or “throttling”, where the speed of the connection is reduced for a period.

A 10GB data allowance will allow hundreds of hours of basic web browsing, but it is not particularly generous for streaming video.  Future applications are likely to make heavier use of video.  For example, streaming a little over eight minutes of HD-TV at 16Mbps would consume a massive 1 GB.

Broadband speeds explained

Advertised speed is the speed that ISPs use to describe the packages they offer to consumers.  They are usually expressed as “up to” speeds because they are only a guide to the speed the ISP can provide. Few subscribers (if any) can get the “up to” speed of service advertised by internet providers, something that is the source of consumer dissatisfaction and much debate in the industry.

Line speed is usually the maximum speed a customer’s telephone line can support, which depends on factors such as distance to the telephone exchange and line quality.  The line speed will always be slightly higher than the speed the customer actually experiences because 10-15% of transmitted bits are protocol overheads to manage the connection.

Throughput speed is the actual speed a consumer experiences at any particular moment when they are connected to the internet. This figure is dependent on many factors, including the ISP’s traffic management policy, the number of subscribers sharing the connection (contention), congestion across the core of the internet, and the speed of the target website’s connection to the internet.  Poor in-home wiring and old computer equipment can also reduce the throughput speed.

An ISP doesn't have control over all of the factors affecting your broadband speed.  The ISP can tell you exactly what your line speed should be, and also controls the "contention ratio" in the backhaul, which determines the amount of capacity allocated per user in the connection between the telephone exchange (or equivalent) and the internet.

 

This article was originally published in the "Beyond Broadband" booklet.

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Digital Subscriber Line (DSL)

DSL is a family of technologies that provides data transmission over the wires of a local telephone network.

Asymmetric Digital Subscriber Line (ADSL)

ADSL is the technology used to provide the first-generation of broadband connections over existing copper telephone lines, and has been deployed on a mass scale around the world.

Data is transmitted over the telephone line at frequencies that are too high for the human ear to hear.  A DSL filter, known as a “splitter”, fitted to the telephone socket inside the house breaks out the frequencies for voice from those used for data, and sends them to the correct piece of hardware (telephone or computer).  At the other end of the line in the telephone exchange, a so-called a DSL Access Multiplexer (DSLAM) separates the voice and data traffic so that it can be carried over the phone company’s separate voice and data networks.

ADSL, which is available in all but a handful of UK telephone exchanges, offers headline speeds of 8 Mbps, depending on what version of technology is available.  However, the speed a user actually receives depends on a number of factors related to the characteristics of copper phone lines.  ADSL works best the shorter the distance from the telephone exchange to the customer premises.  Other factors like the quality of the copper and connectors, aluminium cables in the network and line-sharing devices (DACS) also affect the service.  Hence it is estimated that around 10% of homes and businesses cannot get a 2 Mbps service from their connection and around 166,000 cannot get any sort of ADSL broadband.

21CN and ADSL2+

BT is in the process of rolling out 21CN (an abbreviation for 21st Century Network), which is long-term project to upgrade the core of the network so that it can carry both voice and data – for the simple reason that it is more efficient to manage one network rather than two.  As part of this programme, BT is replacing DSLAMs in the exchanges with new equipment than can support ADSL2+.

ADSL2+ has a headline speed of 24 Mbps, which can represent a significant bandwidth boost for some.  But, like all copper technologies, the speed of ADSL2+ depends on line quality and distance; beyond 3 km from the exchange there is no real speed advantage over ordinary ADSL.  An estimated 50% of telephone lines are capable of speeds above 8 Mbps, with the majority remaining in the 8–12 Mbps bracket.

Very high speed Digital Subscriber Line (VDSL)

VDSL is usually deployed in combination with fibre-to-the-cabinet (FTTC).

FTTC boosts broadband speeds by shortening the distance from the electronic equipment to the customer. This involves laying fibre-optic cables from telephone exchanges to green street cabinets or their equivalent, and installing faster VDSL2 equipment in the street cabinet to provide broadband over the remaining few hundred meters of telephone line.

The speed offered by VDSL depends on its “profile” which is essentially the set of frequencies used. The most common configuration in the UK today offers up to 40 Mbps download. As with other copper-based technologies, top speeds are only available for users located next to the cabinet. Speed decreases rapidly with distance from the cabinet, and at distances beyond 1 km VDSL2 offers ADSL-like performance. The average distance from the street cabinet to customer is around 300 m, so the majority of end users can expect to see broadband speeds in the region of 25 Mbps with this approach.

This article originally appeared in Beyond Broadband.

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FTTx Technology Overview

Coming soon...

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Cable Broadband: How It Works

By  Malcolm Taylor

Cable networks were originally established as unidirectional networks to deliver television and radio stations into the customers' home. Cable provided a high quality alternative to the aerial radio and television broadcasting that was often subject to interference. The old cable networks were fully coaxial cable based.

In mainland Europe, the earliest deployments started in the 1930s. Until the 1990s, there were thousands of small networks all over Europe but most of these are now consolidated into larger cable operators.

In the UK, cable networks started to emerge from the mid 1980s, following a policy decision by the government to liberalise the telecommunications market and create ‘infrastructure competition’ to BT, which was subsequently privatised. Although some UK cable networks were established during the latter half of the 1980s, it wasn’t until the early 1990s that cable network build really accelerated and in a 6-7 year period, over 50% of UK households were passed by new cable networks.

In mainland Europe, cable operators needed to upgrade their networks from unidirectional to two-way capability and invested extensively in fibre. In UK, because of the later start, extensive fibre was deployed from the outset.

As a result, most current cable networks contain significant levels of optical fibre, often to less than 100 metres from the customers' premises.  The final connection into the customers’ premises is coaxial cable. Consequently, the name 'hybrid fibre-coax' (HFC) network is used to describe the majority of modern cable networks. Based on this network structure, in addition to the traditional broadcast services, cable operators can now offer broadband Internet services in excess of 100Mbps.

How it works

The cable network comprises a number of elements – the headend, the fibre and coaxial cabling to the customers’ premises and the individual customer’s terminal equipment.

The headend is where the broadcast content is received, either from a satellite or a local TV antenna or sometimes via a direct fibre link from a studio.  The headend processes and assembles the content for onward delivery to the customer. It also connects with other  network and service providers.

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In a modern HFC cable plant, fibre optic cables carry the content (radio frequency signals) as light (optical signals) from the headend to optical nodes in the various neighbourhoods served by the cable network. The node converts the optical signals back to RF signals and the local part of the cable network distributes the RF signals to the customer, over the coaxial cable. Typically, local nodes serve between 500 to 1000 customers’ premises.

In addition, the HFC architecture enables the delivery of signals that originate in customers’ premises back to the headend. This two-way capability supports the provision of interactive audio, video and data services.

The local coaxial (or drop) cable is connected to consumer electronics equipment, often referred to as CPE (customer premises equipment), inside the home. This equipment (such as television sets, set-top boxes, cable modems and personal video recorders) processes the cable signals and enables subscribers to view, record, and interact with those services.

Most cable operators provide set-top boxes and cable modems (that connect to the HFC plant to provide always-on, high-speed access to the Internet) as part of a subscription package.

In addition, telephone services are offered on cable networks using a “telephony over IP” protocol  (which is based on EuroPacketCable 1.0/1.5 standards). Now, many cable modems incorporate the telephony function and are increasingly wireless routers.

How much capacity?

Typically, HFC cable networks carry multiple television channels, radio and telephone services, video on demand (VOD) and broadband Internet services using the range of UHF spectrum. In most cases, this extends to 862MHz but cable networks will operate up to 1GHz as more capacity is required to meet growing demands from customers for bandwidth hungry services.

In terms of broadcast services, multiple channels are available, and these are comparable to those delivered by direct to home (DTH) satellite.

Broadband Internet services are provided using a technology known as EuroDOCSIS, the latest version of which (EuroDOCSIS 3.0) allows data speeds of 160 Mbps downstream and 120 Mbps upstream, which is, at least four times faster than the previous EuroDOCSIS version. These speeds are achieved by the ‘bundling’ or combining of a number of channels.

As EuroDOCSIS 3.0 has no limit in how many channels it can bundle, the speed for data communications via cable will progressively increase to multiples of 160Mbps and 120Mbps.

EuroDOCSIS 3.0 also accommodates the increased demand for IP addresses by integrating the new Internet Protocol version 6 (IPv6). The demand for more IP addresses is generated by an array of new Internet enabled devices (laptops, PVRs, mobile phones, etc.).

Strengths and weaknesses

The key strength of a modern HFC cable network, when compared to other mainstream broadband technologies, is the extensive use of fibre optic cabling, deep into the local community, which allows the provision of significantly greater numbers of broadcast services as well as very high speed broadband, based on the latest generation of EuroDOCSIS technology referred to above.

The combination of fibre to local nodes and coaxial cable drops to the customers’ premises, as opposed to the twisted pair cables in older incumbent telephone networks, means that significantly more bandwidth is available. At present, the coaxial drop is adequate but the current HFC structure also provides a very good base for cable operators to extend fibre into the home to further increase capacity.

Another potential benefit of cable networks is that, with local headends, more localised broadcast and other services can be provided.

Next-generation broadband

Any network, large or small, particularly those serving local communities, has to provide a range of services that customers seek – particularly in a competitive broadcast and broadband market. To make a wide range of services available to customers, all networks have to interconnect with other networks and with content and service providers. In this respect, new networks need to deploy technology that will support the transfer of content and services across network interfaces and also look to find areas of mutual interest with other network operators.

As far as the UK is concerned, the existing mainstream cable network operator, Virgin Media, reaches between 50–55% of households, compared to BT’s universal coverage.  New community projects can offer the opportunity for cable to extend its reach, whilst customers within the community can benefit from the service range that cable technology offers.

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Wireless Broadband

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Satellite Broadband

By Mike Locke

Evolution of satellite systems

Networks and businesses have been using satellites for data for as long as there has been an internet. In fact, the first ever internet connection into the UK was carried over the Atlantic by satellite – albeit at only 9kbps.

Several things have changed in the intervening four decades: speeds have increased to tens and hundreds of megabits per second, and costs have come down dramatically.  Today, it’s possible to buy your own two-way satellite connection for less than £300 and subscribe for £25 per month. That means that “proper” broadband is now accessible to everyone in the UK no matter how remote from their telephone exchange or fibre backbone.

The frequencies used by satellite, both for data and for television, have also risen from C-band to Ku-band and some now in Ka-band. (Definitions vary but in a satellite context, C-band is around 3.6-7GHz, Ku in Europe is usually taken as 10.6GHz – 12.75GHz and Ka is above 26.5GHz). The higher frequencies are made available as technology develops and they are needed because services soon fill up frequency bands as they are made available.

The move to digital systems for television saw a whole new set of standards developed under the umbrella of Digital Video Broadcasting (DVB). Digital TV is, obviously, a digital transmission system and DVB technology has been adapted to carry internet data as well as digital TV data. This means a satellite broadband can share much of the same infrastructure as a satellite TV system and also the customer equipment can share many of the same components and software.

The commonality of technologies has enabled a much lower cost base for many satellite internet networks and hence today most satellite broadband systems aimed at consumers will be largely based on DVB.

The equipment

A satellite network has two main components: the satellite itself in orbit and the dishes and systems back on earth – the so-called “space segment” and “ground segment”. For a TV system, the ground segment will consist of the operations systems, which control the satellites in flight, the uplinks that send the TV signals up to the satellites and the various links to receive the TV broadcasts from the broadcasters; plus, of course, the dish and satellite TV receiver at the viewer’s house.

Add the ability for the customer to transmit as well as receive, driven by a suitable satmodem, and link the operations hub to the internet backbone and that, in simple terms, is a satellite broadband network.

Until the advent of DVB-based systems, the customer premise equipment (CPE) was quite expensive and needed a 1 or 2-metre dish, relatively high power transmitter and a specialist satmodem. Usually, it would take a two-person team half a day or more to install and setup.  These expensive installations are still used in certain applications, but most consumer satellite broadband systems nowadays use a low power (no more than 2W) transmitter and a dish no more than 75cm in diameter. The CPE is easy to install by a single person and quick to get going with automatic commissioning and a simple Ethernet connection to the computer or router.

Satellite advantages

The main advantage of satellite broadband is that it is available just about anywhere you can see the southern sky (it has to be the southern sky as geo-stationary satellites orbit the Earth around the Equator). That being the case, satellites have long been used for communications in remote locations such as oil rigs where running cables was simply impractical or prohibitively expensive. Other networks use satellites where they want direct connections or just don’t want to share infrastructure, perhaps for security: National Lottery terminals or car dealerships being common examples.

There is still a trade-off between price and availability as the space segment, and hence the bandwidth carried by it, is relatively expensive. Terrestrial broadband is cheaper to use once the cable or phone line has been laid. However, since laying new cable can cost the operator up to £100 per metre, a satellite installation may have a lower upfront cost, plus it’s quicker to install.

Speeds over satellite are typically 4–10Mbps, but can be up to 100Mbps. At one of the mature satellite positions such as ASTRA 3 at 28.2ªE, there is more than 4GBs of aggregate capacity available, with more to come as compression technology continues to improve.

Because of the economics of satellite, it will never be as cheap as a connection to an existing network a few kilometres away from the exchange. However, recent advances mean that a perfectly reasonable speed of 1–10Mbps can be had for around £20–£25 per month.

The fundamental advantage of satellite broadband is that you can have it installed within a few days and get online with reasonable speeds just a little more expensive than the UK average. If you’re in a location where terrestrial broadband still hasn’t arrived, satellite can connect you straight away.

Broadband is not the only service that can be delivered by satellite; the obvious service that can be received on the same dish, as long as your dish is pointed at the right satellite, is digital TV like BSkyB and Freesat. Some providers can also offer a VOIP service with a UK phone number.

Satellite disadvantages

All internet services have issues with contention and resource restrictions. That’s in the nature of shared access services and can only be avoided by guaranteed – and expensive – committed information rate or leased line services. Satellite broadband usually has tighter restrictions than terrestrial services simply because of the higher cost of providing the bandwidth.

However, users have the choice of different packages to match their requirements as closely and as economically as possible. For example, there are packages with unlimited data but a gradual throttle for overuse; packages with no throttle and a set amount of data each month; packages with a limit during the day but unlimited overnight downloads and so on. The important point is that the user needs to take a little more care to choose and make effective use of the package that’s right for them.

Satellite services are based in different countries and so it is important to check that the service you choose has a UK IP address. That means you will automatically get the UK version of websites such as Google.co.uk and not be excluded from country-specific services such as BBC iPlayer.

And, of course, there is latency.  Latency is the “round-trip” time for a packet of data to go from the user over the connection to the computer being visited and then back to the user again. Since the satellite is in orbit some 36,000km high, the signal takes just over one tenth of a second to reach it and another tenth to come back to earth again. Even at the speed of light this introduces a minimum time of 440 milliseconds into any satellite connection.

Some satellite systems use acceleration techniques which wait for all the webpage to be assembled and sent across as a single transmission rather than requesting one file at a time – so it takes longer to start the download but finishes sooner.

For most applications, latency is not a major issue. But for applications such as real-time gaming where half a second is the difference between being shot and diving into cover, then satellite will suffer because of the latency.  Some virtual private network (VPN) systems can also have problems. The VPN prevents satellite system software from altering the private data, so a VPN cannot benefit from satellite system acceleration.

Other satellite systems

This brief article has restricted itself to services carried on geostationary satellites direct to the consumer. There are other services on low Earth orbit (LEO) systems but these are significantly more expensive both for the equipment and the data.

In the past, due to the cost of the satellite terminal, it used to be economic to install a single terminal in a community to act as a hub and then use local connectivity such as Wi-Fi to share the satellite connection to homes and businesses. However, now that the CPE is so cheap and easy to install, the benefits of the communal approach are outweighed by the complexity. It is much simpler and cheaper to have a dish and satmodem each with no need to share any connection.

In conclusion

Satellite broadband services delivered by geostationary satellites have truly now come of age. They offer a good solution, ubiquitous and reasonably priced. They make no claim for the latest superfast 100MBs speeds at a rock-bottom price: for that you will either have to wait a while for a new technology to deliver or move house. On the other hand, if you like where you live or work and want to get connected today, then satellite will deliver.

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Installing fibre-optic cables underground

By Neil Bradley, Fibre Options

Analysis shows that between 60% and 80% of the capital costs of a fibre project are due to civil work, ducts and cables. In other words, the cost of digging holes and filling them in again.

There are ways of getting round these costs, such as wireless transmission, overhead poles, and so on, but in the main if a future-proof network is to be employed then only fibre will do the right job.

Costs for digging can vary enormously, from £5 per metre to £100 per metre depending on where you are going and what disruption you are incurring. If permissions have to be granted they can depend on the traffic control of diversion of that area, which is costly. If the digging is in soft areas and reinstatement is not a problem then costs are low. If the dig can be achieved by slot cut with a very narrow channel then costs are about £25/metre. Costs then escalate up to £35 to £50 per metre for cutting into the pavement and could be £100 per metre in the main carriageway.

Over the past few years, lower cost alternatives to traditional trenching have emerged.  Here we will introduce some of these methods.

Micro-Trenching

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Micro-trenching is particularly suited to roadways and sidewalks where utilities are already present beneath the road surface.  It requires only a shallow trench, typically about 15 cms deep, which does not penetrate beyond the surface layer of the road.

Advantages: Significantly faster and less expensive to deploy than traditional trenching - approx. 35% less. There is less damaging to existing roadways.  Less depth also means that cables are closer to the surface, easier to get to and fix if there is a problem.

Moleploughing

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This installation method is suitable for burying cable or sub-duct in rural verges or across farmland. Specialist machines ‘plough’ a slot directly into the ground and lay the cable or sub-duct into the slot immediately, in one continuous operation.  The ground then closes over the slot and needs no re-instatement.  

Advantages: Significantly faster and less expensive to deploy than traditional trenching - typically 40% cheaper.
Disadvantages: Moleplough products are generally somewhat tougher than standard designs in order to match the heavy duty installation method.

Directional Drilling

Directional drills are relatively compact, allowing them to get into tight spaces and to be placed at the side of a road without impeding traffic.  A small crew is required: a drill operator and locating equipment operator.  The locator operator electronically tracks the progress of the drill head beneath the surface using a hand-held locator.  He also gathers data from the sonde located in the drill head behind the drill bit.
The sonde gathers data such as location, depth, roll angle, pitch, and temperature to help the driller adjust the direction of the head and control the bore path.

Advantages: Clean, trenchless solution without disturbing the surface above, leading to cost savings in excavations, reinstatement costs.  No more need to apply for road-opening permits for public road works.

Impact Moling

Unlike horizontal directional drilling – which can be guided – impact moling works in straight lines, and requires both a launch pit and a reception/catch pit. In the launch pit, the mole is lined up with the catch pit and then set in motion. Impact moling has many applications including the renewal of lead water pipes, the installation of utility pipework and cable-laying.

Advantages: Suitable for all soil conditions except rock. Minimal or no excavation beyond the necessary connection pits, and minimal disruption to the customer and customer’s property.

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Using overhead distribution lines to carry fibre optic cables

By Jim Rowe, AFL

Every village and small community in the UK is connected to the electricity distribution network, and in most cases this connection is carried on wooden poles stretching out across fields to the nearest electricity substation. Usually these poles carry two or three electricity conductors and would potentially make an unobtrusive and convenient way to install fibre-optic cables to carry broadband connectivity – providing power and Internet over the same poles.

[[wysiwyg_imageupload:17:height=331,width=220]]Electricity is best carried over long distances at high voltages, and then the voltage is reduced in steps as the power is brought closer to houses and businesses. The National Grid operates at 400,000V with conductors carried on massive steel pylons from power stations to primary substations where it is converted to 132,000V for regional distribution. The next set of sub-stations converts the power to 66,000 or 33,000V. Voltages of 66kV and above are usually carried on steel lattice towers and voltages of 33kV and below are normally carried on lines supported by wooden poles. As the voltages come down, the sizes of the support structures get smaller, the number of conductors gets less and the height above ground level decreases.

The next step is to convert the electricity into 11,000V to make the connection to villages and then finally there is a step down to mains voltage for connection to individual properties. Often, all of these final links in the electricity distribution chain are carried on poles above ground with connections to houses at roof-top height. Properties built in the last 25 years will have all of their services connected underground because this has been planning policy since the 1970s, but even so few properties are more than 100m from an overhead electricity distribution line.

Power utility companies are big users of communications to operate and control their networks, and many of the bigger transmission lines already carry fibre-optic communications cables to provide connections between major sub-stations and control centres. Distribution lines radiating outwards from substations towards towns, villages and consumers have, for the most part, not been equipped to carry communications cables because there has been no requirement for the power companies to do so in these parts of their networks.

The same technologies that have been used since the 1980s to add fibre-optic cables to large transmission lines can also be used on medium voltage and low voltage distribution lines, and this has attracted the attention of organisations that are planning to build broadband networks. These lines reach right into the target communities, providing both the means of connecting to the broadband service providers’ infrastructure and also the means of distributing connectivity to individual consumers within the community.

The key advantages of using overhead electricity distribution lines to carry cables providing broadband connectivity can be summarised in three distinct areas: speed, security and cost

  • Speed: It is always much, much quicker to install fibre-optic cable by attaching it to poles than it is to dig trenches to bury it underground. Directional drilling or ploughing are alternative ways of installing underground cable, but these are also slow and expensive compared to installation on overhead lines. Circumstances will vary according to the time of year with factors including weather conditions, whether or not crops or animals are in the fields and what the ground conditions are like underfoot; however it is generally possible to install at least 1km of fibre optic cable a day on overhead power lines and up to 5km per day is possible in favourable circumstances.
  • Security: is a key concern in any fibre-optic cable installation. Cables have been installed on overhead power lines since the very early 1980s and have developed an excellent reputation for security and reliability over that time. Power utilities use these cables to carry critical communications for control of the electricity network. Fibre-optic cables installed above ground are not subject to ‘dig-ups’ which is the biggest cause of cable damage in the UK. Cables that are installed as part of the electricity infrastructure are protected by the proximity of power conductors, which provide protection against theft and vandalism.
  • Cost: The higher unit cost of aerial cables compared to underground cables is more than offset by the much lower cost of installation and therefore aerial cables have the lowest total cost. Aerial cables have much higher installation rates and so networks are built much more quickly, begin to provide services earlier and so have quicker returns on investment. Put another way, with reduced initial costs and earlier in-service dates, aerial cables have shorter pay back times than underground networks.

Several technologies are available to add fibre-optic cables to overhead power lines: ADSS, OPPC and AccessWrap. The choice of which to use will depend upon the type of overhead line.

ADSS (All-Dielectric Self-Supporting) is the simplest concept for aerial fibre-optic cable: it is an underground fibre optic cable made stronger to allow it to be installed by attaching it to a series of poles. The cable needs to be physically strong because it will be supported only at each pole along the route and will have to support its own weight across the half-span on each side of the pole. This is in contrast to an underground cable which is fully supported inside a duct or in a back-filled trench along its whole length.

In addition to its own weight, ADSS cable must support the extra loads imposed by wind pressure and by the build up of ice when this is problem in exposed locations. These extra loads can be significant and require carefully designed clamps to spread the mechanical strain over several metres of cable at each pole to prevent any risk of damage.

ADSS cables have the advantage that they are completely independent of the electricity supply network, even though they are installed on the same poles. Potentially the two networks can be owned, managed and maintained by different organisations, although there are safety issues when people carrying out installation and maintenance activities are working in close proximity to live electricity conductors. This will inevitably mean that communications technicians working on the fibre-optic cables will have to be trained and certified by the electricity industry to work on energised power lines.

The main concerns regarding the use of ADSS are related to the amount of load exerted on the supporting poles and the clearance between the ADSS cable and objects around it, be they trees close to the line, traffic or farm vehicles passing underneath or the electricity conductors on the line itself. Since the local landscape changes from line to line and since there are many different designs of poles in use, in some cases it will simply not be possible to install ADSS into a suitable location to provide a secure and reliable installation.

OPPC (Optical Phase Conductor) is a replacement electrical conductor that has optical fibres built into it as part of the manufacturing process. The fibres are inside the conductor, usually contained within a stainless steel tube. OPPC is installed on an overhead electricity line in place of one of the normal conductors.

OPPC replaces one of the normal conductors and therefore it adds nothing to the appearance of an overhead line and it does not affect the mechanical or electrical rating of the line. From this point of view, OPPC is the least obvious and most secure of all of the cable types. However it is also the technology that is most intimately associated with the electricity supply network as it physically forms part of this network. Any maintenance activity on either the communications or power network involving OPPC will have an impact on the operations of both networks.

OPPC is normally only installed as part of the construction of a new line or during the complete refurbishment of an existing line and so it is unlikely that OPPC will be specified by any organisation other than a power utility company.

AccessWrap is a technique that installs a fibre-optic cable onto an overhead electricity distribution line by wrapping it securely onto one of the power conductors. This is a scaled down version of the SkyWrap process that has been used since 1982 to install fibre-optic cables onto power transmission lines; the smaller, lighter AccessWrap machine is designed to work on power lines supported by wood or concrete poles and with conductors spaced only 0.5m apart.

The optical cable is supported by its host conductor and so it does not need to carry any of its own weight. Therefore it can be very small and this means it has little effect on the mechanical and electrical performance of the overhead line; it also has little impact on the appearance of the line. Installation is carried out using a special device which travels along the host conductor carrying a drum of optical fibre cable. The device rotates as it moves and wraps the cable under carefully controlled tension onto the host conductor at a pitch length of about three quarters of a metre. Clamps are used on each side of each pole to hold the cable in place on the conductor. The machine moves at about walking pace with about 15 minutes required at each pole to lift the machine onto the next span and put the clamps in place.

AccessWrap does not place extra load on the poles supporting the power line nor does it reduce the ground clearance under the line and these are major advantages over ADSS in some circumstances. However, AccessWrap is wrapped onto one of the power conductors and therefore it is much more closely associated with the power network than ADSS. Even so, evaluations carried out in the early part of 2011 by several utilities in UK and Ireland have shown that routine maintenance tasks on overhead distribution lines such as replacing insulators and transformers can be carried out without disturbing AccessWrap.

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These products create an opportunity for power utilities to roll out communications networks on to their electricity distribution infrastructure, potentially connecting all the way through to the users’ premises and linking these to headends at major substations or regional control centres. This type of infrastructure may be required to provide the communications networks to support Smart Grids, and utilities may build these networks for this purpose only. However, once built, such networks would support other applications and could generate revenue opportunities in providing carrier services to third parties such as broadband service providers and mobile operators. The combination of Smart Grids that enable utilities to meet Green Agenda targets and access to additional revenue streams from existing assets may provide sufficient encouragement to utility companies for them to begin building these networks. If and when this happens, broadband connectivity would be extended to many isolated communities right across the country.

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Community Hubs

Coming soon...

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Tackling the Backhaul Question

By Annelise Berendt, Point Topic

Accessible, affordable, high-speed backhaul has been identified as key to bringing next-generation broadband services to the UK’s rural and remote communities. These locations tend to suffer from lack of access to backhaul provision because they are usually some distance from their nearest BT exchange and are situated in areas not served by other commercial providers.

The importance of backhaul was highlighted by the Coalition Government in its broadband action plan published on 6 December 2010. “Our aim is to ensure every community has a point to which fibre is delivered, capable of allowing the end connection to the consumer to be upgraded – either by communities themselves, or since this will make the business case more viable, industry itself might choose to extend the network to the premises.” The plan, entitled “Britain’s Superfast Broadband Future”, proposes a “digital hub” in every community by the end of this Parliament (in 2015) and Broadband Delivery UK (BDUK) is to explore the viability of the approach at a local level. This builds on the idea of the “digital village pump” first coined by community interest company NextGenUs UK in 2010.

The Digital Scotland Report, published on 26 October 2010 by The Royal Society of Edinburgh, explores backhaul provision in greater depth. “Lack of backhaul capacity limits the provision of local access, the delivery of next-generation speeds to homes and businesses, and the rollout of mobile data services.” A number of remote communities have built their own high-speed local access networks but have limited speeds as a result of sharing a slow backhaul connection. In Scotland these include Tiree, Eigg and Knoydart. The report adds that a high-speed backhaul infrastructure would stimulate investment to build new local access networks as well as benefiting those that already exist.

Proponents of better and particularly fibre backhaul cite not only its beneficial effects on next-generation local access network provision but other benefits including greater efficiency in public services and enabling mobile operators to roll out 3G and LTE 4G mobile broadband offerings.

Industry has highlighted a number of ways in which the cost of both backhaul and access network construction could be reduced, namely sharing existing infrastructure, deployment of new overhead infrastructure, microtrenching and sharing streetworks. Other approaches on backhaul are also coming to the fore, the most interesting of which are demand aggregation on alternative infrastructure and the use of public sector networks.

In this short report we identify the options for providing backhaul to communities seeking next-generation broadband speeds, particularly those in remote areas. We look at the cost of providing backhaul and some of the products available today together with what is expected to be available in future. The emphasis is on fibre-optical solutions.

Defining backhaul

Backhaul is the connection over which traffic is carried from a local aggregation node such as a street cabinet or telephone exchange back to an internet gateway. It is sometimes referred to as the “middle mile” as opposed to the “last mile” or the local access network. Backhaul can be provided using different types of technology: fibre optic cable, fixed wireless radio and microwave technologies and satellite.

Essentially there are three flavours of backhaul – local, regional and national:

  • Local backhaul takes traffic from the primary connection point (PCP), back to a local aggregation point or node. Typically the PCP will be one of the green street cabinets operated by BT Openreach, used as a access point for a communications provider involved in sub-loop unbundling, and the aggregation point will be a BT exchange.
  • Regional backhaul collects traffic from the local aggregation node and delivers it to an aggregation point where a national backhaul provider has a point of presence (PoP). Here it connects to the national backhaul network. However, this [regional?] aggregation point need not be a BT exchange. Other providers including Cable & Wireless, Virgin Media and TalkTalk have similar connection points, as do some local authority networks.
  • National backhaul takes traffic from the regional aggregation point to a telehouse for internet breakout and onward delivery to the voice network. As above, the national link can be provided by various other providers besides BT.

The backhaul network needs to have enough capacity to serve aggregated traffic demand from the entire community it serves. End-users do not all use the network simultaneously but the network should still be able to handle peak hour demand.

The most likely approach for getting backhaul to a community deployment is for Openreach to provide a fibre as part of its Ethernet portfolio. Alternatively the fibre may be dug by a fibre-laying company, of which Openreach is one. Existing dark fibre may be another option although this is less likely to be available beyond urban areas and national routes.

Alternatively wireless technology could be used to provide the local backhaul element using 5.8GHz radio. This would involve conducting line of site surveys and sourcing suitable premises for masts or erecting poles, together with gathering the required wayleaves and landlord commitments. Both fibre and wireless approaches have been employed by Rutland Telecom, for instance, which uses Openreach fibre for its Lyddington sub-loop unbundling deployment, and point-to-point radio for backhaul from a number of smaller villages in Rutland.

Costs of backhaul provision

The problem for many rural and remote communities is that the local backhaul element simply does not exist in any readily accessible commercial form. The effect of geography and distance means therefore that backhaul provision comes at a high price. The cost of backhaul varies depending on the individual circumstances of deployments. Anecdotal accounts of specific backhaul costs include those cited in the Digital Scotland Report of £140,000 per year for 34Mbps backhaul supplied by BT to the Connected Communities network on the Western Isles in Scotland. The report goes on to estimate installation and operational costs of £250 million over 15 years for the 2,500 km of fibre it says is needed to bring backhaul to Scottish communities of more than 800 homes.

To explore how significant the cost of backhaul is for rolling out NGA, Point Topic has calculated the implications of Openreach’s prices for backhaul projects to serve communities of different sizes over a range of distances. For local backhaul we assume communities at 1,000, 2,500, 5,000 and 7,500 metres from the serving BT exchange. We also consider how the costs per household or business look if they are allocated across 250, 50 or only 10 premises.

Each community is served by one PCP with fibre-to-the-cabinet (FTTC) deployment using sub-loop unbundling, putting VDSL2 into the cabinet. Thus an optical fibre is required to connect the communications provider’s (CP) cabinet, adjacent to the PCP, to the serving BT exchange. The prices for Openreach’s Ethernet Access Direct (EAD) products are used. EAD is due to replace Openreach’s current Backhaul Extension Service (BES) and Wholesale Extension Service (WES) products in June 2011. Prices include both one-off and annual rental elements, corresponding to the standard telecoms categories of capital and operating expenditure, capex and opex.

The differences in economic impact across this range are considerable. If fibre is already available and costs can be recovered from as many as 250 premises then the one-off capital costs would be quickly paid for and continuing opex would be quite modest per home or business, at only £20.30 per year even at 7.5km range. But recovery from as few as 10 premises gives opex per premises of £273.50 even at a short distance from the exchange, far beyond what is likely to be economic on a commercial basis.

The picture is less encouraging if new fibre has to be provided. Opex stays the same but capex is much higher, ranging from £23.80 for a home in a large and nearby community to £3,195 for one in a small community far from the exchange. And costs go up by another order of magnitude if a new duct has to be dug for the whole distance as well. Here the range of capex is from £163.80 to £29,445.

It is also important to remember that here we are looking simply at the cost of backhaul. The figures quoted are only small part of the total cost of providing a broadband service. They do not include, for example, the cost of the CP’s street cabinet or the cost of the unbundled tie cable from PCP to home among many other things. Legal and planning costs, exchange costs, marketing costs and a profit margin all need to be covered by the full price quoted to the end-user.

These simple calculations raise a number of questions without providing answers. What is a reasonable amount to spend on providing broadband to remote places? If my house is a few £100,000 cheaper because it is remote, would it be worth investing even £30,000 to abolish some of the disadvantages of remoteness? And what should the working assumptions be about the take-up of superfast broadband services in rural communities? Commercial CPs cannot afford to assume 100% take-up of a service or anything close to it, but it makes sense to assume 100% in cost-benefit analysis of a publicly funded project. In the long run the aim will be indeed to achieve 100%. Many homes will be users without appearing to access the internet as far as they are concerned, whether for streaming TV, telecare or smart metering.

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Network Capacity Planning

Internet service providers (ISPs) have historically talked about "contention ratios" when describing broadband. The contention ratio is the number of people sharing a given connection. Early ADSL services offered two levels. 20:1 for business and a cheaper 50:1 for consumers. Sharing a connection with only 20 people is clearly better than the higher number. Note that in this case the contention is at the telephone exchange – not on an individual’s line.

With the introduction of ADSL Max (and later ADSL2+ and FTTx), contention ratio disappeared from the language as BT changed to guaranteeing a certain throughput through the telephone exchange at peak times. Consumers could still pay more to get a higher throughput guarantee, depending on the package purchased.

Nowadays the contention has moved from the equipment in the telephone exchange to the backhaul into an individual ISPs core network as is described in this article. It isn't totally analagous to the contention ratio of old because instead of sharing 2Mbps on a 2Mbps connection you are sharing a connection that has much higher bandwidth than your local pipe. This difference is not visible to the end user, but is something that affects the overall quality of the customer experience.  Perhaps more importantly, bandwidth sharing on the backhaul connection must be taken into consideration by an ISP when planning network capacity.

Once the initial capital investment has been made, the most expensive ongoing element of a broadband service is the backhaul.  This is why a typical ISP provides packages with usage limits. To a rough approximation, the more GigaBytes you use the more it costs the ISP. Connectivity is however measured in bits per second not bytes so how does an ISP decide how much bandwidth it needs in terms of bps?

For an existing ISP planning to expand its market share and take on more customers this will be straightforward.  It divides its existing peak backhaul bandwidth usage by the number of customers (known as tails) and gets an average usage per tail. It then uses this average figure to calculate the total additional bandwidth needed for a given number of new customers.

There are things to look out for here. First, consumers normally use less bandwidth than businesses. This is almost certainly down to the fact that there are likely to be more users sat behind a business broadband connection than a connection into someone’s home.

All ISPs will have different metrics, but a figure of 40kbps for consumers and 70kpbs for business is a reasonable average. It should be noted that these numbers are constantly growing in line with increased online usage. The rule of thumb has traditionally been is that internet usage grows by around 50% per annum. So 70kbps today is likely to be 100kbps in a years time. This is not necessarily an indicator of future growth.  Increasing usage of HD video, for example, could completely change the metric.

The other factor driving usage is the speed of the local delivery technology. Someone with a 2Mbps ADSL connection is going to use less bandwidth than someone with 8Mbps ADSLMax, which in turn uses less than than a 24Mbps ADSL2+ connection, and so forth.  Each jump in technology has resulted in a growth of usage of around 30 to 50%.  These figures are all rough orders of magnitude because they will be different for each user community.

It gets worse - at least from the ISPs perspective. As local access speeds increase the minimum backhaul bandwidth required to service a community becomes far higher. For example a 2Mbps connection will require as a minimum a 2Mpbs backhaul otherwise it can’t possibly be a 2Mbps connection. Similarly a 100Mbps circuit needs a minimum of a 100Mbps backhaul.

However a 100Mbps backhaul is far more expensive to provide than a 2Mbps connection. The barrier to entry has just been raised. A 100Mbps Ethernet pipe will likely cost in the region of £20,000 per year, so the ISP needs to find a critical mass of users willing to sign up for the service to cover this cost.

The calculation of how much backhaul bandwidth you need to provision therefore starts at the maximum speed of a single local access circuit. A single 100Mbps backhaul serving 100Mbps fibre-to-the-home connections will potentially be sufficient for as many as 1,000 connected tails or more as they are not all using the network to its maximum rating at the same time.

It isn’t rocket science to work out that two 100Mbps users trying to use the maximum speed of the connection at the same time should only get 50Mbps each off a 100Mbps backhaul. Whilst this may be true, in practice users are never using the full capability of their connection, and this is always one of the determining factors of ISPs offering “up to” speed packages.

As users are added to the network the ISP will monitor usage, and if it sees maximum capacity being reached regularly with resultant network congestion it will increase the bandwidth available. As the number of connections grows, the required backhaul bandwidth can be based on a usage per tail figure that the individual ISP will have calculated based on its local experience.

Controls can be put in place to mitigate against usage abuse and growth. For example, someone continuously using a bit torrent to download files from the internet could permanently saturate a link and degrade everyone else’s service. Some ISPs will apply a limit to the amount of bandwidth that can be used by protocols such as bit torrent so that a satisfactory overall service is provided for other users.

The inclusion of this type of functionality in a network needs to be designed into the original architecture. It is also something that requires transparency in the commercial terms with customers.

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Careful planning keeps costs under control

Guaranteeing operational quality while reducing expenditure is the ongoing objective of all telecommunications network operators. Edgar Aker of Draka Communications, now part of the Prysmian Group, explains how a combination of design software and innovative products can significantly reduce total cost of ownership.

As a leading cable manufacturer, Draka engineers have seen from hands-on experience how next-generation telecommunications networks are driven by innovation. They have also witnessed the determination of operators to reduce capital expenditure (capex) and operational expenditure (opex) to produce a lower total cost of ownership (TCO).

Getting more for less may seem like a tall order, especially in tough times, but approaching the design of a network from the top down and building it from the bottom up will provide positive results.

Top down design

The modern telecommunications network can be seen as a three-tier pyramid, with the passive infrastructure at the bottom supporting the active network in the middle, with retail services at the top. The passive infrastructure provides the foundation, and the layers above rely on it to ensure optimum quality of service.

With this in mind, a network should be designed from the top down. For example, if a passive optical network (PON) is used then the other two layers should be designed accordingly. However, when it comes to network build it is important to take a bottom-up approach by considering all the components available as well as physical limitations such as duct sharing, rights of way and local registration.

The service side of the network is constantly changing and developing as network technologies progress. If enough attention is paid to specifying the right passive infrastructure, it can last between 20-30 years, enabling the active network to be future proofed for three to four years. Therefore, from a business case perspective, cost calculation should focus on the passive layer using careful design and planning to reduce capex and opex.

It is important to remember that there is no "one size fits all" solution. A network should be designed according to local requirements, and operators need to carefully define what they want and expect from it – whether it is low latency, large bandwidth or reliability. Only then should the technology and topology be chosen. 

Software control

Reducing the capex of a passive infrastructure involves reducing the costs associated with installation, civil works, optical fibre cables, connectivity, network engineering and project management. Successfully limiting the expense associated with these various elements requires a holistic approach to network planning and special design software, such as Draka’s XSNet Network Software Suite, can help operators specify the most appropriate network concept.

Design and planning software creates the most cost-effective network by automating, sequencing and simplifying components and processes as much as possible. By incorporating intelligent mathematical algorithms, users can change parameters and design various network concepts within minutes. The software eliminates the need to "guesstimate" material requirements, which means no more having to redo preliminary drawings or cost calculations when a project gets the go-ahead. 

Getting the design right keeps costs under control, while optimisation tools ensure that the exact quantities of materials are ordered. By employing a smart planning approach, digital information can be used to analyse and visualise various network scenarios quickly and easily, while survey information can also be used to create detailed lists, drawings, working reports and schematics. 

By investing in digital maps users are also able to identify existing infrastructure and avoid on-the-job changes to plans, making sure that material and labour costs do not increase once the project has started. If the design specification does need to change the software calculates and redesigns the network automatically.

Time is money

Labour can form as much as 38% of the total cost of a network build, and on-site labour is notoriously difficult to budget for. However, once the design of the network infrastructure has been finalised, there are a number of methods to reduce the expense associated with it. 

Over recent years we have seen increased demand for prefabricated points of presence (POPs). A prefabricated POP is built in a factory controlled environment, which means that it can be fully checked, tested and signed off prior to being delivered to site. Once delivered, it can be positioned on a concrete foundation and then the cables and/or ducts can be connected quickly and easily.

A prefabricated POP offers the highest flexibility and ultimate network stability to meet the needs of urban installations. It can be pre-planned and inserted into network infrastructures, providing a secure facility housing servers, routers, ATM switches and digital and analogue call aggregators. Pre-fabricated POPs also help network service providers achieve an optimum POP cost/connection ratio for densely populated areas.

Increasing the density of connections and reducing the size of the cables, patching products and associated components, can further reduce the cost of POPs, while the use of bend-insensitive fibre-optic cables can also improve handling while reducing installation time.

Speedier installation of outside plant can make a huge difference to a project’s overall expenditure and this can be achieved in a number of ways, including eliminating on-site splicing and simplifying installation techniques using the latest plug and play technologies. Digging costs can also be minimised with the use of smaller cables and connectivity to reduce civil works.

Innovative solutions are also available to reduce the time and labour costs of indoor installations and eliminate the need for splicing at the customer premises. By pre-fitting a fibre-optic cable with the ferrule of an LC connector, it can then be blown, pushed or pulled through microducts. Once it is located at the termination point, the connector housing is snapped around the ferrule and the cable connected.

Avoiding surprises

By taking a methodical approach to network infrastructure design and build, it is clear that opex and capex can be reduced. This means understanding rather than underestimating the role of the passive infrastructure and the use of smart engineering tools to optimise the capabilities of the network. Taking the time to use design and planning software and using the latest products and installation techniques will reduce the risk of unpleasant surprises, and can significantly lower TCO.

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Policy & Regulation

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Policy Background: Digital Britain

Technology never stands still.  Having completed a range of measures to promote the roll-out of first-generation broadband in the UK, it soon became apparent to the Government that other countries in Europe were investing in broadband infrastructure capable of delivering even higher speeds.  How should the UK respond?  Was the economic competitiveness of the country in jeopardy?

The development of UK broadband policy on NGA can be chronicled through the publication of several key reports.  In 2007, the the Broadband Stakeholder Group (BSG) opened up the debate with the publication of Pipedreams? Prospects for Next Generation Broadband Deployment in the UK, which laid out the issues confronting the UK in rolling out new access network infrastructure.

The BSG then commissioned Analysys Mason to study fibre costs, and calculate the investment needed to deploy NGA across the whole of the UK.  (Note: An equivalent report on the costs of wireless and satellite broadband was also commissioned, much later, in 2010).

The Government also asked Francesco Caio, former chief executive of Cable and Wireless, to carry out a comprehensive and independent review of the future of broadband in the UK, paying particular attention to barriers to investment, which was published in 2008.

Finally, in 2009 this was followed with a series of strategy papers under the banner Digital Britain, which were to inform new policy in this area.  The final Digital Britain report takes a wide-ranging view of communications strategy, covering topics as diverse as digital inclusion, the digital TV switchover, digital radio, public service broadcasting, the role of the BBC, online copyright, monetization of content, and addressing IT skills shortages.

From the point of view of improving broadband infrastructure, the plan had two stages:

  1. A universal service commitment (USC) to provide 2Mbps to all UK households by 2012;
  2. Coverage to 90% of homes with NGA at speeds of 40Mbps or more by 2017, which would be market-led for two-thirds of the population, with subsidies available for the remainder.

Digital Britain introduced an important concept, the so-called “Final Third” – the areas left behind by the current wave of commercial NGA deployment plans.  In March 2010, the Department of Communities and Local Government (DCLG) published an Assessment and Practical Guidance on Next Generation Access Risk in the UK, which identifies areas likely to become part of the Final Third.  These are predominantly rural areas due to the higher cost of installing fibre, but some urban populations may also be at risk as a consequence of social deprivation.

To meet the objectives outlined in Digital Britain, the Government created a delivery body, christened Broadband Delivery UK (BDUK).  This body was initially to concentrate on delivering the USC, using £200 million of funding from the Digital Switchover Help Scheme under-spend (part of the BBC licence fee set aside for helping people convert to digital TV), and the Strategic Investment Fund (a new £750 million fund announced in the March 2009 Budget).  BDUK formally came into existence in March 2010.

This article originally appeared in Beyond Broadband: Giving our Communities the Digital Networks They Need.

Key publications mentioned in this article:

April 2007Pipe Dreams? Prospects for next generation broadband deployment in the UK, report by the BSG executive

September 2008 - The costs of deploying fibre-based next-generation broadband infrastructure: Final report for the BSG by Analysys Mason.

September 2008Review of Barriers to Investment in Next Generation Access: Final Report by Francesco Caio (also called The Caio Review).

June 2009 Digital Britain: The Final Report by Department for Culture, Media and Sport.

March 2010 - An assessment and practical guidance on next generation access (NGA) risk in the UK by Communities and Local Government

October 2010 The Costs and Capabilities of Wireless and Satellite Technologies – 2016 snapshot Report for the BSG by Analysys Mason

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Government Policy on Next Generation Broadband

By Louise Lancaster at Ayres End Consulting

In May 2010, following a general election, a new Government, a coalition of the Conservative and Liberal Democrat Parties, took office.  The Coalition Programme for Government promised:

“We will introduce measures to ensure the rapid roll-out of superfast broadband across the country. We will ensure that BT and other infrastructure providers allow the use of their assets to deliver such broadband, and we will seek to introduce superfast broadband in remote areas at the same time as in more populated areas. If necessary, we will consider using the part of the TV licence fee that is supporting the digital switchover to fund broadband in areas that the market alone will not reach.”

Jeremy Hunt, the new Minister for Culture, Media and Sport, gave his first speech on the media and broadband sector in June 2010.  He referred to the Labour Government’s legacy as a “paltry 2 Mbps universal connection”.  He expressed the view that, “Superfast broadband is not simply about doing the same things faster. It’s about doing totally new things – creating a platform on which a whole generation of new businesses can thrive.” He signalled that plans would shortly be announced to bring superfast broadband to rural and hard to reach areas and concluded with a simple goal:  “Within this parliament we want Britain to have the best superfast broadband network in Europe.”  Much debate ensued about what “best” might mean.  It was subsequently explained that this did not necessarily refer to speed alone, but would refer to a basket of measures.

Mr Hunt’s policy was fleshed out at an Industry Day on 15 July 2010, hosted by Broadband Delivery UK (BDUK).  The 2 Mbps USC deadline was pushed back from 2012 to 2015, but this was not necessarily bad news.   The 2009 Digital Britain report had identified an under-investment in backhaul networks (i.e. the section between the local telephone exchange and the central backbone network) which needed to be addressed.  Now the Government was expressing an intention to remove barriers to investment by encouraging shared use of infrastructure such as public sector networks and BT’s ducts and poles, and by easing obstacles thrown up by street works, wayleaves and State Aid processes.  They made it clear that the minimum 2 Mbps would only apply to an “irreducible core” of 160,000 or so premises.  The rest of the country would be served by superfast broadband and BDUK would oversee a procurement process with local and regional involvement.

In order to understand potential commercial models in detail, BDUK announced a Theoretical Exercise.  Suppliers were invited to propose complete solutions for three real rural locations (in the Highlands of Scotland, Lancaster and South Wales).  From this work, BDUK would develop commercial models, from which they would begin a procurement process to fulfill the universal Service Commitment, using 2 Mbit/s as a minimum but not necessarily a maximum.

BDUK also heralded the superfast broadband “pilot” schemes, which would be procured in the first half of 2011 and delivered from Q3 2011.  Superfast broadband was described as at least 20 Mbps, though both Jeremy Hunt and BDUK expressed the view that we should be aiming for 50 Mbps by 2015 and that speeds of 200 Mbps were expected by 2025. 

In the Comprehensive Spending Review on 20 October 20 2010, the Government announced that the first four pilot projects to be run by BDUK would be in the Highlands and Islands, North Yorkshire, Cumbria and Herefordshire.  The funding for this was being redirected away from the BBC.  £230m was the underspend from the Digital Switchover scheme, and the BBC would be required to contribute a further £150m in 2013-14 and 2014-15, bringing the total to £530m.  This could be increased to £830m if the BBC is required to contribute the same amount in 2015-16 and 2016-17 (which is when this current settlement with the BBC expires).

On 6 December 2010, BDUK published the conclusions and lessons learned from the theoretical exercise, alongside a policy document Britain's Superfast Broadband Future, which sets out the government's vision for superfast broadband networks in the UK and describing the measures it will take to achieve this.

In May 2011 Jeremy Hunt reiterated that vision by announcing that 90% of homes and businesses should have superfast broadband (which he clarified to mean at least 25 Mbps downstream) by 2015.  Mr Hunt has also emphasised the need to consider wireless, as well as fixed, networks.  He believes that superfast broadband to be "super-flexible" to keep up with the increasing use of broadband-on-the-move.

Meanwhile BDUK have now published their Programme Delivery Model which provides detail on how BDUK will help deliver the government's broadband policy goals. 

 

Louise Lancaster is an independent consultant providing practical advice on telecoms regulation, interconnect, public policy and commercial contracts.

After qualifying as a solicitor at a City firm in 1994, Louise worked as an in-house lawyer, regulatory and government affairs adviser for a number of telecoms companies, before becoming a consultant in 2003.  She has experience in Continental Europe and the USA and her clients include traditional network operators, specialist service providers and trade associations. 

She has been a member of the Council of ITSPA, the Internet Telephony Service Providers’ Association, since 2006.  She provides advice to INCA on regulatory and public policy matters.

www.ayres-end.com

 

 

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An Introduction to Telecoms Regulation

By Louise Lancaster at Ayres End Consulting.

The provision of electronic communications networks and services in the UK is overseen by the industry regulator, Ofcom.    Ofcom, combines regulatory oversight of broadcasting (TV and radio), spectrum (the airwaves over which wireless devices operate) and electronic communications networks and services (fixed and mobile telecoms services).  Ofcom also has concurrent power with the Office of Fair Trading under the Enterprise Act 2002 and the Competition Act 1998.  Competition law prohibits anti-competitive practices and abuses of dominant market positions.

Much of the UK regulation is transposed from European Law.  The EU Framework consists of five Directives: the Framework Directive (2002/21/EC), Authorisation Directive (2002/20/EC), Access Directive (2002/19/EC), Universal Service Directive (2002/22/EC), Privacy and Electronic Communications (2002/58/EC).  These have now been amended by the Better Regulation Directive (2009/140/EC) and Citizens’ Rights Directive (2009/136/EC).The latest revision of the EU regulatory framework comes into force in May 2011. 

The Communications Act 2003

The functions and powers of Ofcom are laid out in The Communications Act, 2003.  Ofcom’s duty is to further the interests of consumers by ensuring, amongst other things the availability of a wide range of electronic communications services and the optimal use of spectrum.

Ofcom is funded by administrative charges paid by those in the industry.  The administrative charge is a percentage of the operator or provider’s annual revenue.

A new Communications Bill is due to be introduced in 2013.  The Government aims to publish a Green Paper in the second half of 2011, for which they announced they were seeking input by 30th June 2011.

General Authorisation Regime

Since 2003, rather than issue individual operating licences, electronic communications networks and services are provided under the General Authorisation regime.   Before providing a network or service, all providers must notify Ofcom of their intention to do so.  Under the General Authorisation regime, all providers must abide by Ofcom’s General Conditions of Entitlement .  The General Conditions distinguish between different types of network or service provider.  The type of network or service you provide will determine which conditions apply to you.   It is the responsibility of all providers of electronic communications networks and services to decide which of the General Conditions apply to them and to ensure that they comply.  Guidance on the application of the General Conditions can be found here.

The General Conditions concern the protection and effective functioning of the UK communications network, the interconnection of networks, use of telephone numbers and measures aimed at consumer protection.  Ofcom has recently consulted on the changes to the General Conditions that need to be made in order to implement the revised EU electronic communications framework.

There are also some specific conditions which apply on to certain individuals, such as those that have been deemed to have Significant Market Power in a particular market, and those who have been designated Universal Service Providers, namely BT and KCom. SMP Conditions vary according to each market in which they are imposed and can include obligations to meet reasonable request to supply services to other providers and not unduly to discriminate.  Price controls may also be imposed.

The Universal Service Conditions ensure basic fixed line telecoms services are available at an affordable price to all consumers in the UK. Amongst other things the conditions cover meeting reasonable requests for connection at a fixed location, a social (low cost) tariff, reasonable access to payphones and access for end-users with a disability.

The Secretary of must make a Universal Service Order setting out the general requirements which must be provided as Universal Services in the UK. The last Order was laid in 2003.

BT's Undertakings

Between 2003 and 2005 Ofcom conducted a Strategic Review of the telecoms market in the UK.  It concluded that competition between alternative infrastructure providers was the only way to ensure a healthy and competitive market.  Ofcom had grounds to suspect that competition was being restricted in markets for the supply of wholesale access and backhaul services in the UK and in directly related downstream retail markets. 

Ofcom felt that it had grounds to make a reference to the Competition Commission under the Enterprise Act, 2002 but, instead, it accepted "Undertakings" from BT in 2005 that it would "functionally" separate the different parts of its business.  It was the biggest change to the regulation of BT since privatisation in the 1980s.  The part of BT that sold local access services became Openreach.  (Although functionally separate, it is not a separate legal entity - BT plc is still one organisation which includes the Openreach division.  Some feel that full "structural" separation of BT is required in order truly to create a level playing field.)

The Undertakings introduced the concept of "Equality of Access", which comprised both functional separation and Equivalence of Inputs ("EOI").  Certain EOI products were defined which had to be offered to other operators in the same timescales, on the same terms and conditions, and using the same systems and processes as they were offered to BT's own downstream businesses.  Sadly, Equivalence of Inputs applies to a fairly limited set of products, and most products relating to NGA (such as sub-loop unbunding and Passive Infrastructure Access) are not covered by the EOI obligation.

 

www.ayres-end.com

 

 

 

Primary author: 

Next Generation Access – regulation of key input products

By Paul Brisby, Partner at Towerhouse Consulting

This section deals with Ofcom’s regulation of BT in the NGA space.  It looks specifically at wholesale markets:  what products must BT sell to other players?  On what terms?  What are the pricing rules?  It is largely concerned with Openreach (although we also touch on BT Wholesale) and covers the following wholesale product areas:

(i)              Local Loop Unbundling (LLU)

(ii)            Sub-Loop Unbundling (SLU)

(iii)           Physical Infrastructure Access (access to BT’s ducts and poles)

(iv)          VULA / GEA – this is the NGA-based BT product delivered at (or very near) the local exchange.  VULA stands for Virtual Unbundled Local Access and is Ofcom’s term.  GEA stands for Generic Ethernet Access and is BT’s term.  (The question of whether GEA is the same as VULA is complicated – see below).

(v)            Backhaul

(vi)          Wholesale Broadband (the only product in this note which is not provided by Openreach) – we deal with this only briefly.

Our aim here is to present a simple account of some of the key rules.  But you need to be aware that regulation[1] in this area is ultimately extremely complicated.  The Ofcom document dealing with items (i) – (iv) above is the Wholesale Local Access statement of 7 October 2010:  it’s 250 pages long; even then, to make proper sense of it you also need to read the consultations which preceded it – the one in March 2010 ran in total to 600 pages.  Then, to understand what the rules mean in practice, you need to plough through various previous Ofcom investigations, appeal cases at the Competition Appeal Tribunal and Competition Commission; separate detailed pricing rules running to hundreds of pages; and quite probably something from the European Commission as well[2].

So, if you want to make sense of the Ofcom rules without reading all that, this section is for you. 

Bear in mind, though, that it is only a summary.  If you need to use these rules in anger – if they really affect your business – you may end up getting to know some of the documents themselves in an unfortunate level of detail!  

1.    Introduction

Ofcom’s rules on most of these areas were set out in its statement on Wholesale Local Access of 7 October 2010 (WLA Statement) and the accompanying SMP Conditions.  Those conditions are the legal rules which generate binding obligations on BT[3].   

As well as making more-or-less final decisions in these areas, Ofcom also set out the steps which it believes are necessary to establish a clear regulatory framework which will allow competition in high speed broadband services to flourish. Ofcom notes that there had been significant investments in so-called super-fast broadband over the previous two years and that around 50% of UK households could now access these services.

Competition in these markets however remains in its infancy.  Ofcom's intention was therefore to establish a regulatory framework which would promote competition but would also support continued investment and innovation.  It will remain to be seen how this works in practice. 

2.    The WLA rules

Alongside the expected rules on LLU and SLU, the WLA statement provided that, for the first time, BT will be obliged to offer duct and pole access to its competitors and to provide access to its own NGA services.  The rules have three central elements:-

(i)              Virtual Unbundled Local Access (VULA).

Ofcom set out new rules governing BT’s NGA services.    In summary:

a.              Where BT deploys NGA, rival CPs will be able to use VULA to deliver high speed services using the BT network. This is intended to give them similar levels of control to that available using LLU. 

b.              As with LLU, in order to use VULA, CPs will need a network presence at or near the BT local exchange. 

c.              BT is now obliged to provide VULA on fair and reasonable terms and on the basis of Equivalence of Inputs or “EOI”[4]

d.              There is a raft of other obligations such as a rule requiring BT to comply with directions given by Ofcom and a procedure for the delivery of new products. 

e.              Note that there are no direct pricing obligations (though there are rules designed to prevent margin squeeze).

f.               Ofcom has said that VULA has to comply with 5 key characteristics:

i.       Localness:  interconnection for VULA should occur locally;

ii.      Service agnostic: VULA should be able to support a multitude of services (including voice)

iii.     Un-contended: dedicated capacity should be available to the end user;

iv.     Control of access: sufficient control of the access connection should be made available; and

v.      Control of Customer Premises Equipment (“CPE”): sufficient control of CPE should be available.

BT has chosen to comply with its VULA obligations through its GEA product-set.  It is beyond the scope of this paper to dissect the BT product set.  However, a key debate is about whether the GEA product set complies with the VULA criteria.  This is inevitable and is likely to continue through the life of the product for a simple reason:  whenever a new product development is requested, the first question asked will be whether it fits within the criteria specified by Ofcom.

Controversy may surround Ofcom’s decision not to make VULA subject to cost orientation but this was widely expected in the industry.  Ofcom believes that NGA development is at such an early stage that they believe it would have been difficult to determine the correct level of any cost orientation obligation.  More interesting is the new guidance on an ex ante approach to margin squeeze. Ofcom has identified the potential for BT to engage in anti competitive behaviour including the potential to engage in margin squeeze by setting “inappropriate price differentials” between VULA and BT’s retail offerings such as BT Infinity. It is also interesting to note that Ofcom has formally recognised that ex post competition law may not provide an adequate remedy to ensure that competition takes hold. Their solution is to set out guidance on the approach Ofcom would take when investigating any suggestion that BT’s pricing was creating a margin squeeze.  It remains to be seen how this will work in practice and the extent to which alternative providers have the will to pursue it.

VULA is envisaged to last for at least the next five years or until fully unbundled fibre services are available. VULA is intended to give altnets greater control over BT's FTTC-based broadband services, enabling them to differentiate their products both from one another and from the standard BT services. As we have seen in the past with products such as LLU, whether this is what happens depends on mundane but fundamentally important matters such as the terms and conditions offered by BT and the design of the systems introduced to deliver the service.  

(ii)       Physical Infrastructure Access (PIA)

The new PIA product will allow others to deploy their own NGA infrastructure between the customer and the local exchange, using BT's ducts and poles. This is expected to be particularly significant in areas outside BT’s own NGA roll-out.

PIA must be provided on fair and reasonable terms; on a non-discriminatory basis; and on cost oriented prices.  There is a raft of other obligations such as a rule requiring BT to comply with directions given by Ofcom and a procedure for the delivery of new products.  BT must publish a reference offer.

Ofcom set out a timeline for the development of the PIA product set (which is a new thing).

i.                BT’s initial reference offer (i.e. the contractual and commercial terms) was to be published within three months of the statement – i.e. by mid-January 2011;

ii.              A window of another three months was to be allowed for the negotiation of the offer with industry (which would notionally have run until mid-April but in fact is ongoing at the time of writing);

iii.             BT should then produce a revised reference offer within two months;

iv.            Ofcom have said that they would consider intervening if agreement could not be reached.

In theory, PIA should enable alternative operators to deploy superfast broadband services in areas where BT elects not to deploy NGA but much will depend on both the price and the terms and conditions. These in turn will depend on whether industry is able to collectively negotiate a fair and reasonable contract, and effective operational procedures, with Openreach.

This has already proven controversial – a public spat has arisen over pricing[5] - and the process of developing workable products is ongoing. 

Note also that PIA is not subject to EOI – but the undertakings contain some interesting rules that go some way towards that (also on SLU).

(iii)           Local Loop Unbundling (LLU) and sub-loop unbundling. 

Unlike VULA/GEA these product sets (in full and share form) exist already; the main difference is that LLU exists in a full, productised and more-or-less scalable form, backed up by a full OSS.  (The same is not necessarily true of SLU).  The key rules on LLU and SLU are these:

a.              It must be provided on fair and reasonable and non-discriminatory terms.

b.              BT is subject to a price control in relation to LLU services.  This means that Ofcom specifies detailed price rules for LLU.  Understanding this fully means reading not one, but several lengthy documents – Ofcom’s original price control statement, the Competition Commission ruling in the appeal made by TalkTalk against the decision, and Ofcom’s subsequent amendments.  Ofcom has also launched a review of that price control (which is currently ongoing). 

c.              Both LLU and SLU are subject to cost-orientation obligations.

d.              There is a raft of other obligations including a requirement that BT comply with Ofcom directions and a procedure for the delivery of new products.

3.    Other relevant rules

We have dealt with the key direct inputs for NGA and broadband services.  Other relevant areas include backhaul and wholesale broadband.  The key points to note are these:

·         BT must provide ethernet backhaul services up to and including 1Gb/s on fair, reasonable, non-discriminatory terms and on the basis of cost-oriented pricing.  It is also subject to a price control.  Ofcom is currently kicking off work to look again at the regulation of backhaul through its confusingly-named Business Connectivity Market Review – it issued a “call for inputs” on 21 April 2011[6].  Anyone at all interested in these areas is strongly advised to offer input. 

·         BT’s wholesale broadband services are also regulated in some areas (these go under names such as IPStream, IPStream Connect, and Wholesale Broadband Connect).  These are the only products considered in this note which are provided by BTWholesale rather than Openreach; they are relevant, though, because they affect the competitive environment.   The key thing to note here is that while BT is unregulated in the vast majority of the country (Ofcom considers that services based on LLU provide a significant competition constraint to BT), much of the “final third” is subject to regulation.  This means that for areas representing population coverage of some 20% of the population BT’s prices will be subject to regulation – though probably only for BT’s 8Mb/s IPStream Connect service.

·         Finally in this section, ancillary services are also regulated.  This might be anything from cable pull-through to renting space in a BT exchange.

4.    Commentary and practical issues

This section offers a little more insight into how the rules might work in practice; into what they actually mean; and into how they can be enforced.

The first point to note is that the whole regulatory structure puts an enormous level of responsibility on BT.   Most of these areas are complex and Ofcom almost always leaves the detail – and sometimes much more than just detail - to BT in the first instance.  The Ofcom rules on the whole don’t tell you much about the actual products – for those you have to look to BT.

The second point is that if you rely on these products to run your business, you can’t necessarily rely on BT or Ofcom to produce products that will work for you.  Ofcom is generally regarded as a very good regulator but they do not typically intervene at a really detailed level.  There are actually some pretty sound reasons for this:  first, a simple resourcing question – Ofcom doesn’t have the resources to control BT at the level of minutiae.  Secondly, a question of efficiency:  the (comparatively generic) rules set by Ofcom could have a near-infinite number of consequences at a level of detail.  Ofcom, then, needs to be guided in what and how to enforce and the people best-placed to do that are those already operating in (or seeking to enter) the market.

The third point flows obviously from the first two:  if you have requirements of these regulated products, you need to be very clear with BT and (possibly) also with Ofcom about what they are. 

It’s worth looking a bit more at how this plays out in practice.  We’re going to focus here on pricing. 

There are two quite distinct kinds of direct pricing rule: 

i.                A (generic) cost-orientation rule:  this rule simply says that BT has an obligation to ensure that its prices (say, SLU rental) are reasonably derived from its costs

ii.              A price control:  this sets more detailed rules for BT’s prices. 

Obviously, the first of those gives BT potentially quite a lot of freedom.  Its exact meaning has in fact been very controversial (at the time of writing, BT is seeking leave to appeal to the Court of Appeal on the matter) but Ofcom’s view is that there is an initial test requiring the price to be between a ceiling (distributed stand alone cost or "DSAC") and a floor (distributed long run incremental cost or "DLRIC").   In terms of what those mean in practice, for some services the difference between the two can be hundreds of percent. 

The price control, you might think, would be much more precise – and you’d be correct.  A price control proceeding is long and complicated and in the case appealed by TalkTalk (on LLU pricing) the final decision ran to something around 270 pages. Even then, though, a lot of freedom is left to BT.  An Ofcom price control will typically take a service – say, MPF rental and, rather than specifying a particular price, will simply say “the price of this service must decrease [or may increase] by a minimum [maximum] of X% per year – with an allowance for inflation”.  Often several services are lumped together in a basket and, provided the price of the basket complies with the rule, the individual prices within it may change.

Some of this is currently being tested.  Visible signs include the public spat about PIA prices (see above).  Sharp-eyed observers will also have noted a dispute submitted to Ofcom on SLU prices by Digital Region (the publicly-funding NGA provider in parts of South Yorkshire); Ofcom is also looking at another dispute on ethernet pricing.

This brings us to enforcement.  It is pretty unusual for Ofcom to take direct enforcement action against BT for breach of SMP conditions.  This means that most serious players will want, at some stage, to test BT’s compliance for themselves.  There are a number of ways of doing this – the best-known (thought definitely not the only ones) being disputes and complaints.  The good news is that, used properly, these routes can be pretty effective[7]

Another interesting point is that regulation is very different for different products.  LLU (MPF and SMPF) is heavily regulated, with a full set of standard regulatory obligations, a cost orientation obligation and a pretty detailed (and closely-targeted) price control; ethernet similarly.   VULA, though, is much less regulated with no direct price regulation at all; SLU and PIA sit somewhere in the middle. 

All of this is complicated by the possibility of appeals and, these days, most of the really big decisions are appealed.  If you want to know more about this, you can read our paper on it here:  http://www.towerhouseconsulting.com/telecoms_news.htm

5.    Conclusions and tips

In all of this complexity, how can we make sense of this in practical terms?

First, it’s a good idea to know the basics about the products you plan to use.  Double check and remember the key obligations.  Likely candidates are fair and reasonable terms, non-discrimination, cost orientation – possibly also EOI and price control.   Take time to think about what they mean for you.

Secondly, unfortunately, no-one else is going to look after your interests.  This means that you need to be very clear about what you want / expect from BT.  Ask clearly and ask in writing.  (A written request is required to trigger some regulatory obligations.)  Get involved in the Ofcom proceedings that set the rules (market reviews or price controls) – either directly or through one of the industry associations.

Thirdly, don’t forget the contractual angle.  Hopefully it’s clear from the rest of this note that most of the regulatory rules are pretty generic.  The contract with BT is your opportunity to put flesh on those bones and almost all contracts have a periodic review.  (On the flip side, a bad contract can do you real damage.)

Finally, you may ultimately have no choice but to ask Ofcom for help in a formal way.  This is not something to take lightly but, equally, is genuinely not something to be frightened of if you really have to do it.   At the time of writing Ofcom is consulting on new dispute resolution guidelines which are designed to make that process more streamlined.

www.Towerhouseconsulting.com




[1] We deal with SMP conditions in this section; BT’s undertakings are dealt with elsewhere.  Note however that there is often overlap and in particular that Equivalence of Input (EOI) obligations often exist under the Undertakings, rather than under the rules discussed in this section.

[2]There’s another 600 pages in the Ofcom statement which covers backhaul

[3]It’s common practice (and rightly) to read the SMP conditions in the light of the Ofcom statement which accompanies them.  In strict terms, though, it is only the Conditions themselves that are binding – a point emphasized by the Competition Appeal Tribunal recently in a ruling on PPC trunk charges.

[4]EOI means that BT has to supply the same product to everyone downstream, including its own downstream businesses.  We have deliberately not quoted precise rule-numbers in this note – it would substantially increase the length of the note and actually looking at individual rules in isolation is quite a bad idea – but the relevant rule here is FAA11.3.  In case you’re interested.

[7]We don’t deal with the role of the OTA in this note but they deserve an honourable mention for their tireless work helping to make regulation work in practice

Primary author: 

Radio Spectrum – the UK’s “4G” auction

By Domhnall Dods, Senior Associate at Towerhouse Consulting

The UK recently announced plans to auction spectrum for so-called “4G” services (suitable for LTE and WiMAX, but actually allocating the spectrum on a technology neutral basis). It’s a reasonably complex area, with abstruse economic questions about untested auction theory over-lapping with a controversial legal framework. This note outlines the plans without seeking to be judgmental.

The Plans in Outline

Spectrum allocations are complicated at the best of times and never more so than recently in the UK. The blandishments of massive auction revenues will challenge the instincts of even the most ardent of free-marketeers. It’s a complex area of regulatory principle which goes to the heart of the market structure – spectrum being an absolute barrier to entry – and which in the UK has been complicated by the merger of two of the formerly five mobile network operators in 2010.

Faced with litigation in a crucial area of industrial policy, the last government went so far as to appoint a neutral mediator to try to get agreement between the various stakeholders. 

The current Minister, Ed Vaizey MP, issued a direction to Ofcom in December 2010 which covered a variety of spectrum issues (“the Vaizey Direction”) – including on 4G allocation. Vaizey set the course directionally; Ofcom’s consultation of 22 March deals with the detail [1]. In summary, this is what the consultation covers:

  • An assessment of future competition in mobile markets (including the potential for new entry).  It was a requirement of the Vaizey Direction that Ofcom undertake such an assessment.  Sound in principle but may be risky in practice (see below).
  • Detailed proposals for the design of the 4G auction – covering a total of 250MHz of spectrum 800MHz and 2.6GHz
  • A number of ancillary questions:  should there be coverage / roll-out obligations, low power local licences and so on
  • Variation of existing 2G and 3G licences to permit the use of LTE  and WiMAX; and
  • How licence fees will be set for existing allocations at 900 MHz and 1800 MHz after the auction.

The rest of this part of the note contains a little more detail on Ofcom’s plans.

The objective

Ofcom believes this new spectrum allocation is desperately needed to meet the UK's rapidly growing appetite for mobile data services, and much of the consultation seeks to determine how best to promote competition. It is hoped that the new spectrum will allow the launch and rollout of 4G mobile technology which will provide mobile broadband speeds close to those that are offered by ADSL fixed line services today [2]. Such technologies should not only offer greater speeds, but much better coverage than has been achieved by 3G services. It is thought that the coverage offered will be comparable to today's 2G, or voice, coverage by 2017.

Ofcom is particularly keen to ensure that the benefits of these new mobile broadband services are also enjoyed in more rural parts of the country and in this respect the 800 MHz band is seen as being particularly important given that lower frequency signals travel farther, and are therefore ideal for serving rural areas.

The higher frequency 2.6 GHz band is seen as being useful for delivering higher speed broadband services simultaneously to many users. Ofcom says it’s therefore likely to be used in urban centres, since systems using higher frequencies require a greater number of cell sites due to their propagation characteristics.

Promoting Competition

Ofcom has decided that a completely open auction would threaten future competition. Spectrum holdings might become inefficiently fragmented across multiple players – some of whom may end up with insufficient spectrum to support a national service. Ofcom has therefore proposed a system of auction floors (to ensure that at least four bidders get enough spectrum to operate a credible UK wide wholesale service). At the same time, they want to ensure that spectrum holdings are not concentrated in the hands of a few players (to ensure no one bidder can secure enough spectrum to allow them to distort competition in the future). In doing this Ofcom creates a new regulatory concept – the “credible national wholesaler”. 

Ofcom clearly hopes that the auction may allow new entrants to come to the market; and appears to have gone to some trouble to ensure that companies are permitted to bid for sufficient spectrum to enable them to become credible national wholesalers in the future. 

While the consultation makes it clear that Ofcom is keen to encourage investment, they are also mindful of the need to ensure that the benefits do not just flow to urban centres and therefore they propose to insert coverage obligations in one of the 800 Mhz licences which will oblige the licensee to deploy a mobile network capable of providing a sustained downlink speed or not less than 2Mb/s, with a 90% probability of indoor reception to an area within which at least 95% of the UK’s population lives.

Sub-national competition

Interestingly Ofcom also considers that sub-national operators may wish to enter the market. For example, some companies may wish to deliver mobile services indoors or in particular localised environments such as university campuses. It may be possible for such operators to share one block of 2.6 GHz spectrum and use lower power equipment in order to facilitate such sharing. Directionally this looks a bit like Ofcom’s GSM guardband auction (in which we acted for one of the winning bidders.)

Licence Conditions

At this stage only non technical licence conditions are being consulted on. And these are very much in line with previous Ofcom practice in that licences will be:

  • UK wide
  • technology and service neutral
  • spectrum trading will be permitted
  • of indefinite duration (subject to very limited revocation powers for Ofcom during an initial period of 20 years)

Auction Design

The proposed auction is a combinatorial clock auction, similar to those which were used for the two spectrum auctions in 2008. This will utilise generic spectrum blocks which bidders will then be able to aggregate. The design itself – while in principle simple for auction theorists – will look quite complicated to many participants.  For example, the price paid by winning bidders will not be their own bid, but the next highest. This all sounds odd and is very different from – say – the UK 3G auction, in which we were intimately involved. And it can lead to some odd-looking results (in a previous UK auction on the same methodology, a winning bidder ended up paying only around 40% of their actual bid price). 

Revised fees for 900 Mhz and 1800 Mhz

Ofcom has also been directed by the government to revise the annual license fees for existing 900 and 1800 MHz spectrum to reflect full market value in light of bids received in this auction.

Next Steps

The consultation runs until the 31st May 2011, after which Ofcom will reach a decision sometime in the autumn. The auction is currently anticipated to take place in the first half of 2012.

It’s worth noting that there is the possibility of litigation about this auction.  There are some genuinely controversial aspects – none more so than the availability of the critical sub-1GHz spectrum, with its superior propagation characteristics.  So it may not all be plain sailing.

www.towerhouseconsulting.com




[1] With responses due at the end of May

[2] In field trials of 4G services in the USA (using LTE rather than WiMAX) Verizon achieved up to 60 Mb/s download speeds:  http://www.zdnet.com/blog/btl/verizon-wireless-4g-lte-trials-showing-50-to-60-mbps-download-rates/13058

Primary author: 

Commercial Operational and Technical Standards Group

By Alex Jennings    

In July 2009 the Broadband Stakeholder group initiated the ‘Commercial, Operational, and Technical Standards group’ - COTS. This initiative was to develop an efficient standardised approach to enable service providers to offer retail services over local or community-led open networks to end users, with a focus on Next Generation Access. As a result of this initiative consumers and small businesses should be able to access a wide choice of service providers, regardless of how the underlying infrastructure is either provisioned or owned. It should be in the interests of all local or community-led projects to be compliant with this approach.

In order to mitigate the risk of the emergence of disjointed networks which did not support interoperability a degree of standardisation and harmonisation is required at both the technical and process levels. However, any standardisation and harmonisation should not inhibit the scope for grass roots innovation at the local level.

The initial meeting of COTS was well represented a second kick-off was held in Hull, with the work of the group being taken forward by a steering group, with representatives from the following organisations participating:

  • BIS 
  • BSG
  • BT
  • Cable and Wireless Worldwide
  • CBN/INCA later JON and now ONE Exchange
  • Fibrestream
  • Geo Networks
  • H2O Networks
  • IFNL
  • Industria/Quintain
  • KCOM
  • Scottish and Southern Energy/FCS
  • Sky
  • TalkTalk Group 
  • Thales
  • Latterly JON and now ONExchange

From this a sub-group was set up which discussed both the issues of the local networks and a list of generic ISP requirements from a COTS solution, tabled by Sky and TalkTalk. As the group was already working from the common view point that an aggregation provider or clearing house was required the group then heard presentation from CSMG discussing B2B interfaces and the work Ofcom had carried out in this area. The steering group looked at how to take forward the issues concerning multiple B2B interfaces and touched on customer migrations.

COTS is now engaging with BD-UK as a result of this work to co-ordinate an approach towards a statement of requirements, which the group has developed, outlining the key areas which need to be considered to support standardisation, harmonisation and ease of access to the disparate networks as communities and local initiatives develop. Many of the requirements are based on the existing information required to provision customers across networks. However, the issue of migration is from existing networks to fibre and between VLANS with the emergence of more dynamic services has yet to be thought about, with many service providers still expecting to be able to provide ‘more of the same’ in the case of Wholesale Line Rental and Carrier Pre-selection.

The key area that all involved in the process agreed on to support the plethora of products and services both old and new was the need of a single aggregation point.

For notes from most of the meeting http://www.broadbanduk.org/content/view/379/43/1/0/

Primary author: 

Network Interfaces and Standardisation

By Huw Saunders, Catalyst Communications Consulting

Ofcom’s General Condition 2 requires providers of communications networks and services to comply with certain technical standards, specifically with regard to interconnection between networks. GC 2 encourages all network providers to follow relevant European standards (as required by the underlying EU Telecom Framework) or those of the global ITU or equivalent bodies. It also allows Ofcom to specify standards that must be followed by one or more providers.

In practice, European or global standards, whether from ETSI, ITU or the IETF, tend not to be particularly specific – often there are a wide range of configuration or methodology options even within a single standard. Consequently, in the 1990s, it became clear to industry and the regulator that a more UK-specific standards body was necessary to agree national approaches to service delivery so that interoperability across networks was more easily enabled. This body was known as the Networks Interoperability Consultative Committee (NICC).

Originally NICC was formally constituted as a committee reporting to Ofcom (and previously Oftel). In June 2008, NICC reformed as an independent industry body that is now owned and managed by organisations involved in interoperability standards development (mainly larger communications providers and equipment manufacturers), and is parented on the Institution of Engineering and Technology. In its initial phases of operation, NICC concentrated on developing a full suite of interconnection and interoperability standards for traditional telco networks and services but, over the last few years, has been turning more and more to “Next Generation” network issues.

Of particular interest to NGA superfast broadband providers is the work they are doing on Active Line Access (ALA). This concept was first developed by Ofcom as a result of work they undertook in 2007 and 2008, looking at how the deployment of NGA would affect services delivered to customers and how competition would develop. Essentially, they concluded that NGA networks were close to being “natural monopolies”, in that only one or, at most, two competing infrastructures were likely to be economically viable. Consequently, the current broadband landscape of both large scale and niche competitive providers being able to differentiate their services through easy access to basic infrastructure such as BT’s copper network through Local Loop Unbundling (LLU) was likely to be subject to radical change.

Ofcom believe that the current health of the UK broadband market, with its wide range of providers competing vigorously for market share at comparatively low prices, is based on a high level of competitive intensity – in other words a large number of potential providers of services being forced to innovate in price, product or service in order to win customers. If NGAs are natural monopolies, LLU enabled competition will fall away and, in the face of diminished competitive pressure, consumers may lose out through the lack of innovation incentives.

Ofcom have sought to address this on BT’s network by introducing the concept of “virtual unbundling” that will, in principle, allow this competitive intensity to be maintained by requiring BT to provide an “enhanced bitstream” service that, unlike current generation IPStream and WBC, allows retail service providers a real opportunity to innovate and offer differentiated services.

But what about the smaller networks being established elsewhere through community initiatives or those that will result from the BDUK “Final Third” funding? This is where the ALA work comes in. NICC will develop standards to underpin the deployment of Next Generation Access technologies that are used to provide high speed broadband services. The Active Line Access (ALA) standards will allow retail Communication Providers (such as TalkTalk or Sky) to offer services to end users in a consistent way regardless of the access network provider that the end user is connected to. These standards can be used to support virtual unbundling of the access network where necessary; they can also provide a single transport solution for smaller community broadband networks that will enable them to connect their individual end users to any CP. The ALA standards will also support advanced capabilities such as Quality of Service and IP multicast that are key enablers for mass market broadband services.

In addition, the Broadband Stakeholder Group (BSG) has been running a programme called Commercial, Operational and Technical Standards (COTS) that is looking at how ALA might work in practice and what other initiatives may be needed in order to deliver the multi-provider competitive landscape that Ofcom see as being necessary. This has concentrated, in particular, on the possible need for intermediaries to sit between smaller NGA players and the big retail service providers, acting as a gateway to minimise underlying technical and operational differences for the service providers without forcing the access providers to make disproportionate investment to meet their requirements.

Whether Ofcom will actually make the use of ALA and a COTS intermediary mandatory for every NGA access network is another matter. At the moment, they are actively encouraging schemes to adopt this approach on a voluntary basis and it may be that BDUK funding is tied to some degree of commitment to them. The next iteration of the WLA Review in 2013 will, however,allow them to designate any NGA networks then operational as having Significant Market Power (SMP) which would allow them to impose a so-called “regulatory remedy” such as ALA compliance.

Useful links:

Primary author: 

Wayleaves: The Right to Install, Maintain and Repair a Network on Another Person's Land

By Rob Bratby, Partner at Olswang LLP

Note: This information is provided by way of background information and is not legal advice.

A wayleave is a contractual licence granting the operator of an electronic communications network the right to install, maintain and/or repair their equipment (or "Apparatus") on a landowner's and/or occupier's land.

How do I obtain a wayleave?

Most wayleaves are agreed commercially with the landowner.

If a wayleave cannot be agreed commercially, then provided the installing operator has been designated by Ofcom as an operator with Code Powers, then the Electronic Communications Code ("Code") as updated by the Communications Act 2003 provides a statutory backdrop for negotiations. That backdrop has led to market norms that apply even where the installing operator does not have Code Powers.  

The following checklist coupled with the sample agreement attached provides general background for negotiations, but does not comprise legal advice:

·         Who should the wayleave be with, and what consents are required? Ideally the wayleave should be granted by the owner of the land. Whilst occupiers may be able to enter into wayleaves, they will often need the consent of their landlord, and land owners may need the consent of their mortgagee or tenant.

·         What is the scope of the wayleave? Is the wayleave linked to the provision of certain services to certain customers, or unlimited in scope?

·         How much consideration is paid for the wayleave?This will depend on the circumstances. Whilst it is not unusual for some wayleaves to be granted for no fee, the fee can include the landowner's legal and other costs, a one-off payment and/or an annual payment.

·         Does the wayleave bind future purchasers?This is the ideal position. However, landowners are often unwilling to agree to this. The right should include access on reasonable notice with or without vehicles for apparatus installation and maintenance (including repairs, removals, alterations, upgrades and renewals).

·         Network operators should obtain sufficient insurance (at least to the level of the offered indemnity) in place to cover any liability under the agreement including for fraud, damage to property and personal injury.

·         The wayleave should require land owners and/or occupiers to not knowingly or recklessly permit any interference with the apparatus or the ability to exercise the right granted by the wayleave. The agreement should set out notice requirements for any planned renovations to the land or development that may interfere with the apparatus. Under the Code, landowners must usually bear the cost of relocating the apparatus during the renovation or development; however, this is subject to negotiation.

·         If the landowner terminates the agreement and requires the removal of the apparatus, adequate notice must be given. The network operator may also request a right to terminate. If the operator has Code Powers the landlord is not able to contract out of the provisions of the Code that restrict the landowner's right to require the removal of the apparatus. However, the wayleave can address the contractual consequences of the service of a Code Power Notice in a way that incentivises the Code Power operator to not serve a counter-notice.

·         Any sub-contracts for the installation and maintenance of the apparatus should mirror the terms and obligations of the main wayleave agreement and include adequate insurance provisions.

·         The length of the agreement will depend on the negotiations. The licence may expire at the end of the tenancy or it may be renewable subject to an additional one-off fee. The example below is a licence terminable on notice in certain prescribed circumstances.

The Country Landowners and Business Association, the National Farmers Union and the Government are working towards more standardised Wayleave terms and conditions to facilitate the roll-out of next generation broadband networks.

Last updated May 2011.

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State Aid and Next Generation Broadband

By Rob Bratby, Partner at Olswang LLP

Note:  This information is provided by way of background information and is not legal advice.

What constitutes State Aid?

Any support granted to networks rolling out broadband by the state (including subsidies and tax rebates) can constitute state aid. If that state aid distorts competition or trade between member states it will be prohibited on the basis that it is not compatible with the EU internal market.[1]

Other non-economic measures won't constitute state aid provided they are available to all utility operators or do not involve any expenditure of state funds.[2] This includes measures to improve network infrastructure such as public-built ducts, new building regulations requiring fibre connections and OFCOM requirements for infrastructure sharing between network providers.

How do the State Aid rules apply to Next Generation Broadband Networks?

State aid is permitted in certain circumstances: the most relevant for these purposes being when the state aid is provided in relation to a service of general economic interest ("SGEI").[3] To fall within this category next generation broadband projects must meet certain criteria. Those criteria are:

·         The project must have a clearly defined public service mission, i.e. to rollout next generation broadband in non-profitable areas.

·         The aid itself must be objectively and transparently allocated through a non-discriminatory public tender and should only cover costs incurred plus a reasonable profit. If allocation is made outside of a public tender, compensation for costs will only cover those a typical, well-run organisation would have incurred.[4]

·         The network must provide universal connectivity to all local users and be technologically neutral to allow for all possible forms of network access and for effective competition at the retail level.

As a general rule, even if a scheme does not satisfy these strict criteria in their entirety, it may be approved on the basis that the positive effects of the aid outweigh the negative effects of competition distortion. Moreover, aid must be the most proportionate and least distortive policy instrument to achieve rapid rollout of superfast broadband. This will not be the case in areas where broadband investment is likely to occur within the same timeframe without aid.

The local existing level of infrastructure will be a good indication of compatibility. 'White' areas where there is no pre-existing or planned basic broadband infrastructure will qualify for aid. 'Grey' areas which have one NGA network already in place (or being deployed in the next three years) will only qualify for aid where the current service is insufficient for local businesses and consumers. 'Black' areas with more than one NGA network already in place will not qualify for state aid. Where there are many basic broadband networks in place operators should have the incentive to upgrade to NGA without aid.

If aid is granted, network providers must also follow OFCOM's access conditions. The networks should satisfy all different types of network access sought by third party operators and support effective and full unbundling.[5] Third parties must also have wholesale access (including rights to use ducts, cabinets and other passive and active infrastructure) for at least seven years following state support.

What is the procedure for notification of State Aid?

Unless a scheme falls outside the state aid regime entirely because it satisfies the strict Altmark criteria set out above, the EU Commission must authorise all plans to grant new aid before they are put into effect.[6] A standard notification of state aid might take 6-9 months to be approved. Notifications that present new issues, are contentious, or which do not fall under existing rules may take longer. Below are some examples of decisions where State Aid for broadband networks has been deemed compatible.

The Government has made proposals for a national framework notification procedure. If adopted, future uses of state funds to stimulate next generation broadband will be pre-approved under an umbrella scheme. In decentralising the funding process local bodies and network providers will have much more flexibility. Pending approval of this umbrella scheme, a state aid template notification is being developed to simplify and ease the procedural requirements of notification.[7]

 

North Yorkshire

http://ec.europa.eu/eu_law/state_aids/comp-2009/n559-09.pdf

Cornwall and the Isles of Scilly

http://ec.europa.eu/eu_law/state_aids/comp-2009/n461-09.pdf

Northern Ireland

http://ec.europa.eu/eu_law/state_aids/comp-2009/n418-09.pdf

Cumbria

http://ec.europa.eu/eu_law/state_aids/comp-2003/n282-03.pdf

 

This information was last updated in May 2011.




[7]BIS 'Britain's Superfast Broadband Future December 2010'

Primary author: 

Business Rates on Fibre-Optic Networks

Fibre-optical cables are a business asset and as such will attract non-domestic property rates.  In August 2010, the Valuations Office Agency (VOA) published the current list of rateable values for fibre-optic telecommunications networks.  For the first time it also published guidelines for assessing NGA networks, which include FTTC and FTTP connections.

Fibre-optic cables are assessed according to values laid out in a table called the “tone of lists”, which relates to the distance, amount of fibre in the scheme and the number of fibres lit.  The rateable values start at £1,500 for a single lit fibre of 1 km length outside London and go up from there.  The bill must be paid by the company that lights the fibre.

At the opposite end of the scale, BT’s extensive fibre network is deemed too complicated to assess on this basis, so the rates liability is calculated according to the Receipts and Expenditures method.   The overall assessment is adjusted by an unpublicised formula relating to BT’s market share.  As a result, BT’s rates bill has fallen in recent years even though its fibre network has grown substantially.

Alternative operators, who do not have the scale of BT, must pay rates according to the “tone of lists” and the rates bill can quickly add up to a hefty sum, particularly in rural areas where longer runs of fibre will be needed to reach the population centres.  This creates a disincentive for alternative operators to invest in fibre; the smaller the network, the larger the rates bill will be relative to the operator’s budget.

For the NGA piece the VOA has two means of calculating rateable values:

  • For domestic users there is flat rate of £20 per home connected.
  • For businesses, the fibre is valued according to the “tone of lists”.

This raises potential anomalies, which the Broadband Stakeholder Group has been working to clarify.  The decision to rate networks according to subscribers connected rather than homes passed (at a lower rate) penalizes Greenfield operators, who would expect a high take-up of services where fibre is the only infrastructure.  Clarity is also needed on how to assess connections to small business customers; how are they  to be rated when shared fibre is employed?

The Government understands that the business rates charged on fibre represent a disincentive for small operators to invest in fibre networks.  In November 2009, a Commons Select Committee report on broadband concluded that:

The current arrangements hinder the delivery of investment in NGA, which is being championed by Government. We recommend that the Government review the application of business rates to fibre optic networks as a matter of urgency, and develop a uniform system for all providers.

Nevertheless, there are no plans to change the ratings regime. 

There is a glimmer of hope for communities: create social enterprises in the form of cooperatives or community interest companies to invest in local fibre projects and seek partial or full exemption from business rates.  Whether local authorities have the resources to grant exemptions in the current financial climate is another matter.

Useful links

VOA Rating Manual: Section 871: Telecommunications Fibre Optic Networks

VOA Rating Manual: Section 873 : Next Generation Access Telecommunications Network (NGA)

VOA: Agenda and speaking notes for Roundtable 11 January 2011

Vtesse Networks: Briefing paper on Business Rates on optical fibre for Francesco Caio

Primary author: 

Streetworks and Code Powers

By Huw Saunders of Catalyst Communications Consulting

Constructing an NGA network on private land seems relatively straightforward – reach agreement with the landowner and JFDI! Caution should be exercised to ensure that the rights to put equipment into the property are maintained in the event of a change of ownership (by entering into an appropriate “wayleave agreement” or “easement” [insert link to wayleaves page]) but a number of legal precedents are available and bodies such as the Country Landowners Association encourage their members to adopt a similar approach to these types of contracts. In addition, there needs to be a clear consideration of how the installation can affect the landowners’ normal activities, and vice versa, and the normal considerations of “health and safety” and liability insurance etc, but these should be standard issues for any experienced contractor.

How do you go about doing the same thing in public land, such as a highway (which includes pavements and verges by the way)? In simple terms, you could proceed in exactly the same manner – reach “commercial” agreement with the relevant “property owner” and then undertake the work, bearing in mind the need to meet the requirements of all of the relevant legislation, such as the New Roads and Street Works Act (NRSWA), ensuring that you don’t interfere with utility assets and other infrastructure already in place, and that you comply with the specified standards of work and restitution. This “Section 6 permit” approach to minor schemes is perfectly feasible, but does require the co-operation of the relevant body (either a local authority, or the Highways Agency) and, again, an experienced civil engineering contractor.

However, if you don’t want to be reliant on “goodwill”, you can apply to be granted use of the Electronic Communications Code. This piece of legislation dates back from before telecoms liberalisation, although it has been modified from time to time, most obviously in the Communications Act 2003. Essentially, the Code enables communications providers to construct infrastructure on public land (streets), and to take rights over private land, either with the agreement of the landowner or by applying to the County Court or the Sheriff in Scotland. It also conveys certain immunities from the Town and Country Planning legislation in the form of “Permitted Development”. In addition to providers of electronic communications networks the Code is also available to those who wish to construct conduits to be made available to network providers.

The Code is granted to network providers by Ofcom, by a direction made following a public consultation and consideration of the responses to that consultation. All that is basically required is that you show Ofcom that you have a legitimate need for the Code and that you have the wherewithal to use it. The Code is not the most user friendly pieces of legislation, but the Ofcom site explains some of its uses and also provides templates for the “notices” that are required to be served on the relevant highways authority etc. Again, the advice and experience of an established contractor can save a lot of problems.

One sometimes overlooked aspect of the Code is the requirement that Code operators ensure that sufficient funds are available to meet any specified liabilities, and that they provide Ofcom with a certificate on 1st April each year that needs to state, amongst other things, that sufficient funds have been put in place,  and needs to be accompanied by copies of any insurance policy, bond, guarantee or other instrument which will provide for the funds if the Code operator ceases to exist. This requirement came about because of the legacy of failed companies in the “dot com” bubble of the early “Noughties”, who left decaying and potentially dangerous apparatus in place, that the local authorities did not have the wherewithal to remove.

 

Huw Saunders has been in the Telecommunications industry for over 30 years working for equipment vendors, telco/service providers and a leading specialist consultancy. He has in depth and widespread experience of all aspects of telecoms services with an emphasis on policy, strategy, business development and service deployment. He has particular expertise in regulatory issues, with extensive involvement with the development of the UK and European regulatory framework and its application from the “Duopoly Review” of the early 90s, through the various EU Reviews of their Regulatory Framework and Ofcom’s Telecoms Strategic Review. Due to the unique nature of the businesses he has worked for, this experience extends from consumers to the largest business customers, from both an incumbent and new entrant perspective, including services provided to and via other carriers and service providers. His consultancy clients have been in the UK, other European states and Asia, and have included incumbent telcos, new entrants and regulatory authorities. In the UK he has been on the Board of NICC, NGNUK and ATVOD, and has recently been the industry co-chair of BT’s Consult 21 Steering Board, and much of his recent work has focussed on “Next Generation Network” and consumer issues.

 

He has had long term involvement in the public sector led South Yorkshire Digital Region “next generation broadband” project. This involved liaison with the lead public sector agencies over a 5 year period, coordinating the public procurement tender response work as part of a bidding consortium and negotiating with key project partners. This project represents the largest ever commercial contract won by his them employer with total revenues of over £100 million over the project’s life.

 

Primary author: 

Local Broadband Plans

There has been a welcome shift in the debate about how to deliver better broadband away from an overarching national approach, towards a more local focus. This is reflected both in government policy as expressed in Britain's Superfast Broadband Future, in the statements of ministers and MPs, and by many of the industry players. The truth is that people in local communities, particularly those on the edge of the network in the so-called “Final Third”, have long had to campaign to ensure they got (a) at least some broadband and (b) broadband services that are adequate for their needs.

Success Strategies for Local Broadband Schemes

In the absence of national roll out plans to meet the basic 2Mbps broadband target, or far more ambitious targets for next generation broadband, funded either by the private or the public sectors, local action has moved centre stage in the thinking of policy makers. This is reflected by Broadband Delivery UK funding the four pilot projects in North Yorkshire, Cumbria, Highlands and Islands, and Herefordshire. It is also reflected in activities on the ground with a diverse range of local projects developing from the city-centre fibre project in Manchester, to the Fibrespeed project in North Wales, local fibre trials by Virgin Media, community-owned projects like Alston Cybermoor, Rutland Telecom’s village projects, NextGenus and a growing range of non-incumbent players. In guidance issued to local authorities bidding into the central government pot, BDUK explicitly recognises the role of community activity and local schemes, requiring bidders to prepare ‘Local Broadband Plans’ as both the bid document and business case for funding.

Developing credible county-level or district broadband plans is not easy. The overarching approach – and the challenge - was summarised at a conference on 9 May 2011 by city investment firm Jendens:

The UK Government’s rural broadband initiative, investing more than £500m of public funds, places a significant burden of responsibility on Councils and the new LEPs:

These assessment criteria represent significant challenges for Councils to match.

Arguably the only way to meet these challenges is to engage with local communities, seeking to maximise their involvement in the process.

The emphasis on local engagement is both welcome and striking, and is reflected at the political level in the speeches and comments of MPs and ministers. On 23rd March 2011, Rory Stewart MP initiated a Westminster debate on the topic of rural broadband. In laying out the challenges faced by many of his constituents and communities around the country he paid tribute to the work of local campaigners and leaders of community broadband schemes. The minister Ed Vaizey, MP responded by saying "I am extremely anxious to see community broadband solutions. It is easier for a county council, perhaps with its own money and additional money from Europe, to seek match funding from the Government, but its tender need not be a big company or big government solution and can include community broadband solutions." [Hansard]

This section of the Knowledge Base is designed to build on these ambitions for ‘localism’ in the development of broadband services with an emphasis on what can help a local scheme to be effective and succeed.

Primary author: 

Community Broadband

The first thing that we have to acknowledge is that not all communities will have the same appetite for getting involved in broadband issues.

Adrian Wooster summed this up very well in a blog posting ‘A framework for localism – from pump to home’ [http://wooster.org.uk/2011/03/pump-to-home/]. As Wooster puts it, many counties are aiming to leverage their public service networks to deliver ‘digital village pumps’ – essentially local access points providing backhaul connectivity – but that this requires the procurement exercise to include a community strategy to deliver the access network.

Some communities will be content to let others take on the responsibility and wait for services to be delivered. Others will want to take on a more active role, building local demand in schemes like BT’s ‘Race to Infinity’ or go further and raise money to develop their own local projects.

In other sectors of the economy it has been proven that many communities, particularly rural communities, will raise investment in order to keep or develop valued local services like pubs, shops and renewable energy schemes. One of the reasons that INCA partnered with the Plunkett Foundation, alongside ACRE, to develop the Big Society Broadband Project is that Plunkett has a wealth of experience in supporting rural community enterprises including 250 community-owned shops and many pubs.

In the broadband field projects like Alston Cybermoor, [link to case study] Great Asby Broadband, Next Genus [link to case study] and Rutland Telecom [link to case study] demonstrate that local investment can be generated to support broadband projects.

From a large supplier’s point of view whether it be BT, Fujitsu Telecom or an alternative player, the appetite of the local community to get more involved has important ramifications on the potential costs of a scheme and the nature of the investment. A community that raises investment is likely to be a patient investor, and indeed most community investment schemes through co-ops or community interest companies will encourage this. The community is likely to be more interested in getting a high quality, competitively priced service, than in a rapid return on the investment. For the public sector, communities that are prepared to make additional efforts will help make the business case for public investment stronger and get a bigger bang for the taxpayers’ buck.

However it is not all plain sailing. Support for community initiatives is currently patchy. The Big Society Broadband Project aims to build a partnership that can change this by trialling different approaches, raising funding and organising local support, but this will take time. Organisations like the Rural Broadband Partnership [http://www.ruralbroadband.com/] are aiming to provide further sources of support.

Another challenge for community broadband is to create the right structures that can allow national players to engage, whether they be third party ISPs delivering services, network builders and operators, or potential investors. Whilst the sector remains looking fragmented and sub-scale it is difficult for these players to get involved.

If these challenges can be overcome the prize is great: community ownership over the problem and investment in the solution can become a significant part of the funding pot, bringing forward the horizons for widespread, future-proofed, next generation broadband deployment.

Primary author: 

Community Broadband Models

A paper outlining community-ownership structures most suitable for community broadband scenarios

Introduction

The realisation that the need to bring Next Generation Access to all communities in the UK will not be met solely by private sector investment has unlocked a range of responses. For some this has been to create the expectation that the Public Sector will fund the Private Sector to fill in the gaps. For others, it opens up the possibility that community engagement will create solutions that neither the Public or the Private Sector could create by themselves.

This paper has been written to help stimulate debate on what form this community action might take. It does not claim to be the definitive answer, but it is the first contribution whose starting point is the need to engage communities in the solution. In other words, it is seeing community-owned broadband as being primarily a community challenge rather than a technological one.

We are grateful to Cliff Mills and Kevin Jaquiss from Cobbetts who have provided specialist legal advice (their firm is experienced in legal structures for community and co-operative initiatives and partners Plunkett on community-owned shop model rules).

We would also recognise that it draws on the experience of a wonderful range of people who have chosen to solve the challenges that they face through community-ownership. We have drawn on this learning from shops, pubs, churches, energy, food, transport and many other vital services where ordinary people, with limited technical knowledge, have chosen to deliver those services by coming together as a community.

The paper covers three broad and connected areas.

  1. Engaging communities
  2. Working with partners
  3. Finding the right legal models

Engaging Communities

Communities don’t want broadband, they want to solve the problems that broadband can solve for them. For many rural communities, having these problems solved for them is a long way off. The passive customer approach will leave them without a range of services that are increasingly shaping the modern world.

We suggest that there are four main relationships that communities can adopt. These are:

  1. DIY: Some communities have, literally, done it themselves. They have laid fibre by digging trenches, then have created the infrastructure themselves. Such an approach doesn’t just get the job done, it also lowers the cost of doing so.
  2. Commissioning: Under this relationship, the community decides that it wants the service, but doesn’t want to physically do it themselves. So it pays others to act on its behalf whilst retaining full control themselves. It should be noted that DIY and Commissioning are not mutually exclusive, both in terms of the approach (which could vary on different parts of the project) and in member relations (some may dig ditches whilst others just buy the service.)
  3. Partner: The third relationship recognises that a project is only viable with additional resources from the Private or Public Sectors and that this will be in a form which alters the ownership of the enterprise. This is considered in more detail.
  4. Customer: The sit back and wait approach will leave many communities without service. Communities can however work together to demonstrate demand to make it economically viable for others to take on or even operate services across a privately owned network.

Partners

The scale of the task, for many communities, will be such that they need to bring others onboard to create their network. We suggest that there are three dimensions to this:

  1. Private/Public Both the Public and the Private Sector are potential partners.
  2. Investments/Assets Both could bring with them either money invested into the network directly or through the provision of assets to the enterprise. There are a number of different scenarios here. Private investment could be from technology companies or investment vehicles. Public sector engagement could be financial or the use of existing infrastructure for community benefit. The exact nature of these is less important in this paper than being clear what each partner expects for the use of their assets by the enterprise.
  3. Investment/Oversight Broadly speaking, these assets could be supplied with a range of expectations:
    1. Passive – for instance a grant given without any expectation of return
    2. Influence – there is an expectation that the provider of the resource will be able to monitor the delivery of the network
    3. Return – the provider will be compensated for the use of the asset at a fixed rate determined at the time of investment
    4. At Risk – the level and timing of the compensation will be decided in the future based on the profitability of the network
    5. Control – the provider of the asset will be part of deciding the long term future of the network

From these flow three relationships that an asset provider might have:

  • Commissioned – the provider is recompensed for their asset but has no say in the operation of the network
  • Oversight – the provider has access to the workings of the network (e.g. seat on the Board), but the network is owned by the community
  • Ownership – the provider owns the network alongside others

Legal Models

Not all community broadband schemes are the same. We suggest that there are four main types.

  1. Individual-driven Social Enterprise: Where an individual or small group wants to demonstrate a strong social purpose to their work, but doesn't want community engagement or investment.
  2. Community-owned BroadbandWhere the engagement and investment of the local community is a vital part of the business plan.
  3. Profit distributing community owned enterprises
  4. Partnerships

Individual driven social enterprises are most likely to benefit from the Community Interest Company (CIC) model as this doesn’t require widespread community democratic control, but does enshrine social purpose. The main drawback it has as a model is that it was created after the current financial promotions legislation was drawn up, so doesn’t enjoy the exemptions that co-operatives and bencoms have regarding community investments. CICs limited by guarantee cannot issue shares, but can promote the sale of bonds and offer membership as a separate consideration. They cannot issue withdrawable shares.

Community-owned broadband

Where the engagement of the community is a vital part of a business plan, then the Society for the Benefit of Community (Bencom) model is the most suitable.

This allows a broad range of investors on a one member-one vote basis. It can use withdrawable shares as a community share model. It locks in a clear community benefit for the enterprise which will assist in establishing its relationship with public sector bodies. An asset lock can be applied to its assets.

Bona Fide Co-operatives

The main advantage of bona fide co-operatives is that they allow individual profit distribution. This comes at the cost of:

  • Enshrining community benefit as the main purpose of the enterprise
  • The ability to asset lock

Bona fide co-operatives are best for communities who have chosen to sacrifice protecting mission so as to enable personal profit. Our experience is that rural communities are wary of such approaches, but it should be presented as an option. Bona Fide Co-operative is a legal term and does not imply that Bencoms are not also a co-operative model.

Special Purpose Vehicle (SPV)

There has been much discussion on bringing external funding into community structures. The advice from Cobbetts is clear. Create a structure that meets the community needs and then connect it to an SPV to meet external investor needs. Do not dilute the community interest in the primary structure. This is the advice that we would give to Adrian’s recent note about the Bill Murphy meeting.

Community Ownership

As the remit for this project was to consider community owned broadband, we consider the best model for community-owned broadband to be a Society for the Benefit of the Community (Bencom) under the Industrial and Provident Societies Act. This co-operative model has a number of distinct advantages:

  1. It is based on the concept that broadband is a community asset and the interests of that community should be at the core of its provision.
  2. There is one member-one vote, so all members will have an equal say in the direction of the enterprise.
  3. It can provide a strong asset lock to ensure the long term protection of the network.
  4. It provides a range of finance options including being the easiest vehicle for community share investment, investment by other IPS societies, loan finance and bond finance.
  5. It also recognises the issue of people moving in and out of the community over time.

It is not profit distributing, although it can recompense people for investment. If a community wants profit distribution then a Bona Fide Co-operative is a more suitable model, although this would remove the option of having an asset lock. Community Interest Companies (CICs) are better suited to shareholder relationship based models, so would be better for the individual (or small group) social enterprise approach.

Within the Bencom model, there are a number of decisions to be made in relationship to broadband delivery which will need to be decided by each network.

If community shares are used - is the person investing in the scheme overall or in bringing broadband to their home? This will, in part be determined by the nature of the area served.

Do all users have to be members or will members receive a discounted service? Under the second, investors are, in essence, paying upfront for a discounted future service.

Given the long time scale, it is highly likely that people will move in and out of the network area and the model will need to decide how this is handled.

A highly sensitive area is that of service cost. Let us imagine a scenario where a town has a large number of dwellings that it will cost £300 per home to connect. It then reaches out to the neighbouring countryside including a remote house that will cost £3,000 to connect. What should that house be charged? Should there be one price for everyone, in which case the town dwellers are subsidising the rural, or should the network charge the extra cost to the remote house. Such a decision is for the democratic structure to the enterprise to decide.

Working with Partners

Earlier sections have flagged the range of partnerships which might be formed. Broadly, we would recommend the following:

Where the partners expect to share the profits from the Network then we would recommend the forming of a Special Purpose Vehicle (SPV) to handle this relationship. The Bencom would be one of the members, thus keeping the community interest intact, alongside the other partners. A number of models could be used including Company by Rule or Limited Liability Partnership. An SPV is useful to balance interests, but should not be seen as the default model for community-owned broadband as it weakens the community role.

 

Conclusion

This paper has aimed to stimulate thought and discussion. It will need to be updated as more communities add their own needs and experiences to it as new enterprises emerge.

What, however, will not change is the need for networks to avoid being enamoured by the technology or the possibility of external investment, vital though both may be. Instead they need to remain focused on how unlocking community engagement in tackling broadband access is a vital part of creating Next Generation Access.

Primary author: 
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The Seven Pillars of Wisdom – Lessons from Nuenen

In terms of consumer take up the most successful broadband project in the world is the OnsNet (OurNet) community broadband project that started in the small town of Nuenen in the Netherlands. There more than 80% of the community are signed up to the local FTTH network. This is an astonishing level of commitment, way in excess of demand profiles used by most telcos. Any community that can deliver anything approaching these levels of take up can pretty much guarantee a cast iron investment proposition. In project studies undertaken by the Community Broadband Network, take up levels of around 35% were gauged to be needed for long term viability.

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Onsnet is featured as a case study in this knowledge base. Here it is worth exploring the key features distilled from the project by its founder Kees Rovers (pictured left).

A traditional telecommunications provider faces a number of drawbacks in a niche market where the constraints of their core market predicates a “one size fits all” solution in which a lowest common denominator service is delivered to the widest possible audience. The existence of the ‘final third’ demonstrates that rural areas pose significant challenges to this approach due to population density, geography and topology. In urban areas whilst ADSL2.0 and FTTC offerings may suit many in the population, some areas are seeking to develop high speed, symmetric FTTH projects to provide a competitive telecommunications environment for digital and creative businesses. One size is struggling to fit all.

A community-led service may offer certain benefits over a traditional model; for example, there is a lower expectation for a return on capital, often restricted to technology renewal, and a longer term, utility-style finacing can be readily adopted. Internet operators increasingly adopt shorter term “technology” investment cycles, with expectations of a significant return on their investment in as little as 18-months. This is very different to the investment requirements of next generation broadband.

Kees Rovers sums up the core attributes of a successful community-owned broadband project in ‘seven pillars’

  1. A viable business model
  2. An 'us' feeling
  3. A set of basic services
  4. Additional local services
  5. Community communication
  6. Customer care
  7. A quality network

Only the last of these really focuses on the technology, and over half of the pillars are something which can only be delivered with local knowledge and involvement.

One characteristic of successful community led projects such as this is that internet access typically becomes less relevant as time progresses. While it can often provide the impetus to begin a project, once the project reaches maturity many people will cite local services or one of the other pillars as the key reason they continue to support the project; a pillar which can't be replicated by the “one size fits all” model. In this case, the seed demand comes from education and healthcare services, and not from generic internet services, further reinforcing this argument.

A Viable Business Model

Community broadband projects are businesses first and foremost. They have to generate income and profits to survive and prosper. The business model will vary - some projects will focus more on developing commercially attractive services, others on attracting funding for projects of public benefit. The critical factor is that the business model is robust and can generate profits for reinvestment and to reimburse the providers of capital.

Cooperation – the “us feeling”

The second tenet of community broadband is to develop an “us feeling”; one way to ensure this is through a co-operative structure, giving “customers”, or more accurately community members, a say in how the business is run, its future strategy, and the shape of the service set.

Many people in rural areas are familiar with this structure and should feel comfortable with it – self sufficiency, community effort and community enterprise have long been woven into the local fabric. Where a co-operative model is used, it is governed by a core set of agreed principles promoted internationally by the global International Co operative Alliance:

  • Voluntary and open membership;
  • Democratic member control;
  • Members’ economic participation – guaranteeing real commitment and returning a share of the profits;
  • Autonomy and independence;
  • Education, training and information;
  • Co-operation with other co-operative enterprises; and
  • Care for the community.

Thus a local community broadband project is likely to aim to reinvest surpluses in new services, make a return on investment, and support new ventures and projects in the community. This keeps the enterprise focused on the needs of its members in the short and longer term.

A Set of Basic Services

Unless the project has a set of basic services to offer it won’t last. In most cases projects will aim to operate on an ‘open access’ basis. However in the UK major service providers are reluctant to get involved in providing services to smaller scale networks. This problem is being addressed by INCA, the Broadband Stakeholder Group and others. However at this point in time in some projects there will be a role for a ‘Community ISP’ to guarantee a core set of services on the network from Day 1.

Additional Local Services

Successful community broadband projects have often focused on developing additional services beyond basic Internet / triple play for their members. Alston Cybermoor for instance has made significant progress piloting tele-health and care services on the network.

With the rise of social networking and a set of internet tools that can create local blogs, directories and newsfeeds, the opportunities to serve the community from within the community with new services such as car-sharing schemes, markets for voluntary time, touchdown points for homeworkers, upgraded community security platforms and a whole set of internet-based community services that were unthinkable ten years are now possible.  However, the key component is that the community develops and owns the solutions and does not depend on being told what the solution should be from National politicians, media barons or telecoms companies.

Community Communication

This is perhaps the single most significant factor in the success of OnsNet. Getting the community behind the project drove astonishing levels of demand and delivered significant profits to the investors and community from the second year onwards. It was achieved through a process of communication that focused on the needs and aspirations of the community and how these could be met with an FTTH project, not on the technology itself. The key factor was getting the right stakeholder groups on-board, engaging with members of different groups in the community and finding clever ways of encouraging demand.

Customer Care

Everybody hates call centres, but the national telcos find it impossible to abandon them. In contrast, OnsNet and every other community broadband project has someone locally you can turn to when there is a problem. Often community broadband projects will major on volunteer effort to help get people online and to help solve problems. Neighbours help other neighbours. Clearly, a robust, high quality network needs high quality maintenance and support, but from a customer’s perspective, nothing beats the human touch of local support.

A Quality Network

This is the one factor that the major telco should always be able to deliver. In the context of next generation broadband it means getting the balance right between what the community does for itself, and what it contracts others to do for it. With OnsNet, the whole FTTH network was engineered by a civil engineering firm that went on to form Reggefiber, the major Dutch fibre operator, which is now 40% owned by KPN (the Dutch incumbent). In Manchester the FTTH project is being delivered by Geo, a well respected fibre deployment company, capable of ensuring that the network is built to high quality and resilience.

DIY has its place, not least in encouraging farmers to dig trenches to reduce costs in very rural areas, but the overall project needs to be managed with the future in mind. A fibre network will last for upwards of 25 years and deliver vital services in the community. It has to be a high quality network.

In conclusion, the so-called “Seven Pillars” of Fibre Networks give us a very good framework on which to base the key components of a local broadband scheme, as well as stimulating the local community to become creative about solving their own particular needs at the local level with minimal support from national financing, politicians or telecoms companies.  All those with ambitions to create local schemes should think carefully about how to cover each of the seven points in order to ensure the success and sustainability of the local communities in the rapidly evolving Internet age.

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A Man, A Plan

Perhaps the question to remind ourselves of first is “Why create a broadband project in the first place?” The answer is that the market has struggled to deliver an adequate, universally available first-generation broadband service and will struggle even more with superfast broadband. Around 10% of homes and businesses cannot get a basic 2 Mbps service and, in terms of next-generation broadband coverage, our current best estimate is that around two-thirds of the population will be covered through commercial investment. That leaves a lot of people in the broadband slow lane. Hence there is a need to take action at local level – and probably the reason you are reading this booklet.

But where to start? There is more than one approach to deliver superfast broadband, and the requirements and resources of every community or region will be different. Nevertheless, it is possible to identify key stages in the lifetime of a broadband project – from the first decision to “do something” to a completed project with a sustainable business providing broadband in the target area.

In general the project stages will follow each other sequentially over time, although it is likely that some decisions may need to be revisited as new information comes to light. There are a number of different threads – such as community engagement, business models, technology options and funding requirements – that will run through all phases of the project, and which should be kept constantly under review.

Stage Description Example Actions
Stages in the lifetime of a broadband project
ONE Individual Mrs Jones

Check existing provision

Contact local authorities

Form community groups

TWO Group North Dorset

Identify area of problem – mapping

Collect evidence of demand

Partnerships

Technology options

Legal structures

THREE Company Angus Glens

Create a business plan

Consult potential suppliers

Service templates

Funding / investment

FOUR

Funded project

Cybermoor

Tender for the project build

Appoint suppliers

Take-up marketing

Stage 1: Form a group

As an individual frustrated with broadband provision, the obvious first step is to check whether your home can be expected to receive an upgrade to superfast broadband under the announced plans of the major service providers, or as part of the regional, county-led deployment. There may also be community projects underway in the local area that you could support. Demand aggregation is such an important element in next-generation broadband projects that you will usually have a greater chance of success by joining an existing scheme than by creating a new project group and dividing the support base.

However, should your search prove fruitless, then you will have to start from scratch, but don’t be deterred! A small but enthusiastic team of committed volunteers can make a huge difference. Therefore you will need to join forces with like-minded people, who recognise the importance of broadband and understand the potential benefits. Talk to local contacts and to people with influence locally such as major landowners, schools and local businesses (especially those in the IT industry), the parish or town council and others, to discover those like-minded people.

Parish or town councils can play a particularly useful role in broadband projects. As the first tier of local government, they have legal status in the administration of the community and certain powers to help them carry out their work. They generally have established communications channels with the relevant local authorities, and access to support and information through counties and national associations. Although parish councillors are elected, they are also community volunteers and often possess the experience, knowledge and skills to carry out local projects. Even if not directly involved with a project, endorsement from the parish council is likely to have a positive impact on discussions with other stakeholders.

In fact, local authorities and economic development organisations often do assume the project lead because they have a vested interest in the economic prosperity of the local area, and because they have the resources – both human and financial – to direct projects of this nature. But this is not the only way forward – community action groups often lead successful projects.

The campaigns that have the greatest chance of success are those with a champion, someone who is absolutely passionate about the project and will see it through to the end. The rest of the team will need a variety of skills: accountant, lawyer, technical, market research, communication, sales and marketing. If you don’t have those skills within the team, seek outside help as and when required.

Stage 2: Identify demand

Establishing the level of demand in a community will help to stimulate supplier interest and will provide evidence to support any fund-raising activities. There are a couple of ways to do this: do some mapping of existing provision, and carry out a survey.

Mapping exercises use empirial data about existing levels of broadband provision and the local geography to provide valuable insight into the level of potential demand and the challenges you may face in trying to improve the situation (see The importance of maps and Maps to support the business case).

A survey will create a more detailed, more subjective profile of your community and its communications needs. You can easily find examples of such surveys with an internet search. Questions usually start with the basics, such as the number and ages of people in the household. Who provides the existing broadband service (if any), and is the performance satisfactory? Surveys often include questions about how much time people spend using the internet and what they spend time doing. Do they run a business at home, for example? The survey should be clear and concise, and explain its purpose in non-technical terms that the average person can understand.

You can also ask questions about the interest in and willingness to pay for superfast broadband. Be careful how you ask such questions, however. If you make it too easy for people to say yes, then when it’s time to part with hard-earned cash, they are no longer interested and the business model falls apart. Also bear in mind that people may be reluctant to answer questions about their willingness to pay in case it gives suppliers a good excuse to charge high prices!

Don’t assume that an online survey will meet all your requirements. People lead busy lives. A knock on the door from a campaign representative, enquiring as to whether the survey has been completed, will often increase the response rate to the survey. And of course, an online-only survey will exclude those with the greatest need because they cannot get working broadband in the first place.

While demand is being assessed, the team should research other community projects to see what could be learned. Find out about and stay up to date on technologies, applications and legislation. The team will need to develop sufficient knowledge to be able to explain their vision to others, to evaluate business proposals and negotiate effectively with solutions providers. Suppliers are usually more than happy to engage with projects to discuss technical information.

Based on this research, the team should refine the vision and scope of the project. What are the goals in terms of the end-user experience? How do these goals align with the available funding? Identify likely synergies that will help to move the plan forward as well as possible obstacles.

This is also a good time to start to build partnerships. Identify which organisations in your community might take an active role in the project. It is vital that the stakeholders understand the benefits of broadband in the context of their own interests. The opportunities created by high-speed internet could be the incentive for a school or hospital to get involved, which creates income for the network and a stronger social argument for obtaining funding. Local businesses such as hotels, housing authorities or mobile phone networks may also be interested in becoming collaborators.

Stage 3: Business models

Not all communities will have the same appetite for getting involved in broadband issues. Some communities will be content to sit back and wait for services to be delivered. Others will want to take a more active role building local demand or go further and raise money to develop their own local project.

Aggregating demand may be all that is necessary to bring broadband to a community. BT’s “Race to Infinity” campaign, which took place in December 2010, is a high-profile example of a demand aggregation campaign in which individuals voted for their exchange to be added to its superfast broadband roll out. In the end 10 winning exchanges were named. There are also a number of alternative service providers who will, at their own expense, install broadband networks in a community when a sufficient number of pre-service contracts have been signed.

Local authorities are working hard to extend the coverage of superfast broadband to at least 90% of households with the help of government funds. For communities outside these plans, BDUK and DEFRA have identified five broad business models. These fall into two main groups depending on whether they are delivered by the local authority’s chosen broadband supplier or by the community organising itself such that is capable of engaging directly with a supplier.

GROUP 1: Facilitate local authority project

  • Demand registration: The community signs pre-service contracts to lower the risk for the local authorities chosen broadband supplier.
  • Build and benefit: The community formally offers to lower costs for the broadband supplier by, for example, digging trenches, arrranging wayleaves or paying higher installation charges.

GROUP 2: Community enterprise

  • Partnership: The community raises some of the finance, but engages a partner to bring in the rest of the investment, and to design, build and operate the network on its behalf. Gap funding is the most common approach.
  • Concession: The community is prepared to raise all of the finance, but brings in a partner to design, build and operate the network. The community retains ownership of the network but grants an exclusive right to the partner to run the network.
  • DIY design, build and operate: The community is prepared to raise the finance, design, build and operate the network themselves.

Whichever model is selected, you will need a business plan – a document that contains all the information to justify the project, along with the supporting information about how you will make it happen, including market analysis, current bandwidth needs and projections, and complete financial information.

The level of technical detail in the plan will depend on the chosen business model. The plan could be mainly a procurement exercise, inviting suppliers to design a cost-effective technical solution to deliver a specific outcome. This approach makes a lot of sense. OnsNet in the Netherlands, a municipal network with a strong community focus (OnsNet means “Our Network”), has the mantra “community owned, professionally run.”

At the opposite end of the spectrum, a community can design, build and operate its own network. The plan should then include complete technical information, and consider network reliability and customer support, as well as future expansion and upgrades. Don’t forget to include the marketing and operating costs in the equation as well as the capital costs of digging and equipment. The financial information should contain realistic revenue and cost projections that lead to sustainability – in other words the project should be able to support itself financially over the longer term.

The “DIY” option is potentially the most risky as it is highly dependent on the skill of the team members. This option also carries additional risk because small networks often have trouble attracting service providers. Lack of retail competiton can leave the project exposed to the possibility that the government could fund a competitive deployment in the same area. Creating a new ISP creates further business challenges, not least in terms of technical support.

However, solutions to these problems are emerging: in 2011 Hampshire County Council worked with Fluidata, NetAdmin and Magdalene to trial a wholesale aggregation platform that brings 40 service providers to the table. INCA is also developing the “Quality Marque”, which will specify a set of standards against which community networks can be developed.

Stage 4: Appoint a supplier

The final stage of the planning process is to approach suppliers and discuss your requirements. Keep everyone informed, especially your key stakeholders and collaborators. Report back to the community regularly, and keep your website updated.

Funding can come from a variety of sources, including government grant or investment, angel investors and banks, various charitable award schemes such as the National Lottery, and of course the community itself, through a community shares program (see box). In-kind payments are also worth considering. Instead of paying the landowner to cross his field, offer free installation of a high-speed internet connection.

If government funding is involved, then issues of state aid can arise, which can delay a project or, in the worst case scenario, require repayment of funding plus interest. Expert advice may be needed to choose the right financial structure and appropriate procurement process. In practice, however, there have been a number of precedents for public funding of broadband networks in the UK, both large and small.

Keep up the momentum! It takes time for a project to reach a successful conclusion. Prepare for setbacks and persevere. You may have to revise the plan several times before finding a solution that is acceptable to all parties and within your financial means. Remember: the long-term benefits will make it worthwhile.

This article originally appeared in Beyond Broadband.

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The importance of maps

Being in possession of all the facts before committing to any major business investment is critical and investing in broadband is no different as this cautionary tale shows.

A recent study of broadband services in a rural area of England, involving both a mapping study and a survey of businesses, threw up a fascinating insight into the problem of developing a clear understanding of demand and availability.  The name of the area will remain anonymous but it could have been of any number of communities.

The received wisdom in this area was that a number of small towns were poorly served by broadband and the survey of local businesses largely supported this view.  However it was strongly contradicted by the mapping exercise which suggested quite the opposite.  In an attempt to reconcile the difference it was much easier to check the cold, hard data than to suggest to businesses that they might be mistaken, so the logic of the data was re-evaluated.

For example, a specific town in the area that had raised the greatest concerns was a tight, nuclear market town and had its own telephone exchange located at its centre.  This seemed to further support the mapping exercise over the survey results as it was reasonable to assume that the existing copper lines to the business community were generally quite short

As further checks, line tests were carried out on each of the businesses lines, and a software speed checker was used to test the existing business broadband services.  Both of these checks further corroborated the data.  There remained little scope to support the business community’s belief that they were poorly served by broadband.

So what was going on? A theory was developed along these lines: Defined market towns tend to build up their own support structures which can lead to the community becoming reliant on a narrow and possibly isolated pool of expert advice; the more esoteric and scarce the skill, the greater the scope for that advice to be of less than the highest quality.  In this environment a respected opinion can become the received wisdom and a local mythology can easily develop.  This mythology can then be readily propagated and perpetuated in a tight-knit, well-structured community.

Contrast this with more sparsely populated areas where people tend to travel further to plug into support networks and different people may seek support in different directions. This is likely to create a richer, more diverse advice network where myths are more readily challenged.  More sparsely populated communities are perhaps also more accepting of poorer infrastructure, and may have less effective communication channels.  As a result, sparsely populated rural areas – relative to small towns – may under report their broadband problems.

As the shape of the digital divide hardens, with the most densely populated urban areas seeing some form of superfast broadband investment while other areas remain largely as they are, the debate is increasingly becoming emotive.  And this can make it harder to understand the business case for investing in broadband.

The lesson to take away from this case study is that, while the narrative of communities is important in developing a business case for broadband, it should mainly be used to add colour and to personalise cold, empirical data. The description of the problem should be based on facts, while the narrative gives voice to the kinds of services the community may demand.

By Adrian Wooster.

This article originally appeared in Beyond Broadband: Giving our Communities the Digital Networks They Need.

Maps to support the business case

The first mapping exercise has to be to understand what the broadband landscape looks like today.  It is critical to base this on data from primary resources – the incumbent operator, the cable companies, and so forth – and to seek or generate further data sets to validate the carrier’s data.  This is equally true for an organisation based within the community as it is for an external organisation considering an investment in an area they know little about.

In order to test the level of competition for a new broadband network it is necessary to plot existing broadband services and the number and type of operators.  In the UK that typically means mapping the ADSL performance for BT services; the extent of Virgin Media’s cable network; and the number of operators unbundling the local loop.

The provenance of the data is important. There have been many attempts to model broadband speeds based on ADSL performance curves from manufacturers and GIS (graphical information system) tools that calculate the radial, as-the-crow-flies distance from the telephone exchange.  Some of these have tried to build in factors for guessing the true cable length, quality and so on but at the end of the day they are just increasingly smart guesses – and this becomes very clear during a mapping exercise.  Estimating broadband speeds based on radial distance will create nice, uniform shapes on a map from which simply doesn’t match with reality.

Mapping quality empirical data provides a more organic image of broadband performance which starts to mould itself to the geography and topography of the area.  From this it’s possible to build a narrative to link the cold data with the tales of broadband woe.  (Samknows is the main source of such information in the UK).

A variety of mapping techniques can be useful in order to gain the fullest understanding.  As well as maps that blanket fill a postcode polygon with traffic light colours to represent poor, mean and good broadband speeds, it’s worth considering other techniques such as contoured heat maps – while it’s harder to say precisely what the speed is at a given location, it does provide a much richer picture from which the broadband landscape can be described.

It immediately becomes clear that the underlying data is not based on a simple model because it does not produce the neat conical contours of a radial guesstimate.  A closer inspection begins to show how the broadband landscape is affected by the contours of hills and valleys, and by man-made features like railways.  These can provide indicators of the problems past infrastructure builders have had to grapple with, and the potential opportunities an alternative approach might bring.

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Map A (above) was generated from broadband data in Oxfordshire. There had been long established rumours that broadband in parts of central Oxford were slow, and the reasons given seemed perfectly plausible but unproven. The story was that some phone lines had had to take a long, circuitous route skirting around the old Morris car plant, which made them too long to support a good broadband service, even though some of the homes and businesses affected were just a few hundred metres from the present-day telephone exchange.

A glance at the new map clearly shows a “ghost valley” of poorer broadband to the north east of Oxford.  While the now BMW car plant is much more compact, the data appears to support tales of the city’s industrial past, still haunting one of the world’s most important knowledge centres.

Slightly to the north of the city is Oxford Airport. Following the northern perimeter fence, the map predicts the existence of an “ox-bow lake” of poor broadband coverage which is perfectly reasonable – it’s unlikely that cables will take the short path across the runway.

Other supporting data sets

Technical broadband data is but one aspect, but other data sets can provide important contributions to the business case.  Another approach to consider is the impact that property density has on the cost of deployment.  Data from the Office of National Statistics can prove very useful here.

Map B (below) was generated from a combination of land use and population dataset from the ONS for the North West of England, and attempts to assess the “mean distance between neighbours” as a proxy for the cost of the civil works required for a fibre-optic network build.

In this case, blue indicates areas where premises are typically farther apart and will therefore cost more to deploy using fibre alone, while green areas indicate areas where homes are closer together and the cost of deploying fibre will typically be lower.

Maps could also provide clues about the kinds of services that might appeal to the community, and therefore drive take-up.  Only when combining such data with the previous technical mapping is it possible to properly understand the business case for investing in a new broadband infrastructure.

It is quite possible, for example, to find a community which is currently under-served by first-generation broadband, and which is sufficiently densely populated to suggest a lower cost of deploying fibre, but which has little interest in adopting new services.

There are a number of possible datasets available that can provide clues, such as the ONS output area classification system and perhaps more usefully the eSociety classification system from the Centre for Spatial Literacy.

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By Adrian Wooster

This article originally appeared in Beyond Broadband: Giving our Communities the Digital Networks They Need.

Investment & Business

In this section, we examine the issues to consider in looking for funding to develop local/regional NGA projects.  Other sections of this site can help you define aspects of your project that will need to be in pretty fair shape before you can answer the likely questions of potential funders – the project scope, type, what kind of ownership structure and importantly, the business plan.

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Community-driven Funding Models

A number of examples demonstrate how community-driven models can be used to help deliver NGA projects.  There are a number of different approaches that can be employed.

Community Shares – a ‘live’ example from Cybermoor

Cybermoor (www.cybermoor.org) has been a pioneer in community-led broadband action since 2001, operating a wireless broadband network.  Cybermoor is working on a NGA project as part of one of the BDUK pilots.

Cybermoor’s plan is to upgrade its network to use more fibre and has received an offer of funding from the Northwest Development Agency (NWDA) under the RDPE (Rural Development Projects for England) scheme.

This grant is part funding of a £600,000 project: with remaining funding to be provided by Cybermoor, and industry partners. Monies will be drawn from Cybermoor’s own resources and through the issue of Community Shares.  A fund-raising document is currently being prepared and once available, we will post a link to it here.

You can find out more about Community Shares at (www.communityshares.org.uk) where there are many resources and links to guidance on community shares and bond issues, legal issues, forms of corporate structure and governance.

An Open Network Community Solution

Based on international best demonstrated practice for business and operating models for open networks, some time ago CBN (www.broadband.coop) devised an outline solution for community networks, based on the open network concept.  The elements considered in this model are:

  • Mutually owned, open network and network operator: a non-profit-seeking body owns and operates the network on behalf of service providers and the business and residential community, primarily offering access to the active network (“lit” fibre) to service providers, but with an option for other operators to buy access to the passive network. 
  • Multiple competing service providers: different providers offer a range of services to end users primarily in services and content including Internet access, telephone services and other content.
  • Community service provider: one of the competing service providers is a community-owned enterprise effectively guaranteeing the availability of core end-user services to local businesses and residents.

The following assumptions are made:

  • That there are may be public funds available for capital investment, particularly in ‘hard-to-reach’ areas
  • That there should be a mechanism to enable and encourage private investment (possibly through the Enterprise Investment Scheme)
  • That the principle of an open network should be maintained to maximise choice and to avoid any issues of state aid
  • That active user engagement in the management of services is desired as a way to encourage take up and as an aid to sustainability
  • That certain technical elements of the operation and maintenance of the network are of little concern to individuals and the community, provided they are performed competently, and so are more appropriately managed at arm’s length by major stakeholders, and outsourced if necessary.

The following entities could be involved:

  • The public sector in some form, perhaps a special purpose vehicle, or more directly
  • One or more external investors
  • A multi-stakeholder cooperative consortium created to own the network
  • A consumer cooperative (or possibly multi-stakeholder) created to provide services on the network
  • A number of companies providing technical services under contract
  • A number of private service providers using the network to provide services to customers
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Sources of Funds

To investigate the funding issues, let’s imagine a typical project.  The situation we have in mind that you’ve established a local or regional project team and you’re clear on the scope of the project.  You have thoughts on what type of corporate structure you might use and you’re developing the business plan.  You’re mapping potential demand and working out where the customers are, talking to potential partners for the build and you are close to knowing what you’re going to build, where it’s going to go, what it’s going to cost and how services can be offered.  Now you need to raise the money.

The purpose of this article is to help you think through the options, and, hopefully, reduce the amount of time you might waste by approaching the wrong targets for the wrong amount of investments.  There’s an obvious disclaimer that we need to make in that INCA cannot offer investment or financial advice nor does anything on this site constitute such advice.  However, we hope that you can benefit form the experience and knowledge of our contributors.

Our working assumption (supported by evidence from some of our near neighbours in Europe and recent UK experience) is that local/regional NGA projects will require different approaches to funding than more ‘traditional’ telecommunications projects.  For example, many of the community inspired projects in the Netherlands and Sweden were regarded as ‘sub-scale’ and ‘un-economic’ by traditional investors and telecommunications companies; yet these projects delivered high levels of customer take-up and are delivering sustainable returns.

In looking to fund your project, you need to understand the territory and which types of funding might be available; so we define the following seven types of potential investors:

  • Private investors – individuals.  Sometimes known as “Angel investors” they invest in smaller projects at an earlier stage than venture funds and generally work very closely with those they invest in.  Often they are what’s called "high net worth individuals" – people who’ve made money elsewhere and now want to invest it in other areas.  The use of Self Investment Pension Plans and the Enterprise Investment Scheme may be attractive to them.
  • Alternative or community-based forms of investment.  These include cooperative structures such as Industrial and Provident Societies, Community Investment Companies; new forms such as ‘Social Impact Bonds’ and ‘Community Bonds’ are emerging.
  • Private investors – venture funds, venture capitalists.  Generally invest in the equity of established businesses.
  • Corporate investors; companies generally in the telecommunications field that put their own investments into projects.
  • Public investors and government organisations at regional/national level.  We include BDUK in this category, and formerly, the Regional Development Agencies were active in some areas.  Often, their investments are conditional on investments by others – this is called "matched funding".  The picture as far as BDUK is concerned is still developing.  Other initiatives such as Local Enterprise Partnerships, Regional Growth Funds and the Enterprise Zones (announced in the Budget in March 2011) will also have a bearing on your funding strategy.  The picture is changing rapidly.
  • Infrastructure investors (sometimes called “Specialist Investment Funds”) invest in long term ‘utility’ investments such as roads, railways, energy.  In this category, we include the European Investment Bank (“EIB”).
  • Investment institutions (conventional); investors and pension fund managers and banks (both UK and overseas).


We’ve ranked the above broadly in terms of the size of projects that they might be interested in funding – ie as you look down the list the projects of interest tend to get bigger.  That’s not an exact relationship however.

As you can see, from a conventional investment point of view, the main problem facing local and regional projects looking for funding (assuming a sustainable business case can be defined) is that of scale.

It also should be noted that the formation of NGA projects would be regarded by many investors as “early stage” developments or “start-ups”; and these are regarded as high risk by venture or development capital investors.

At the time of writing, it appears unlikely that conventional large-scale investors (the final two categories in the list above) would be prepared to invest in local or regional NGA projects.  There may be some possibility that "framework" agreements, which can aggregate a number of projects into a total size of interest to larger investors, might be possible; INCA is actively working on this idea.

It’s certainly the case that the UK will need to find innovative approaches and structures to addressing the need for investment.

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Procurement

Government intervention to help areas with poor broadband services and to support the development of next generation broadband, has put the onus on local authorities to develop local broadband plans, apply for funding and procure services.

These processes are not fixed in stone, consequently this section of the knowledge base (like other sections) is liable to change. However, we hope that it goes some way towards addressing the challenges of developing local broadband plans and procurement processes.

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Nature and Scale of the Problem

County Councils, local enterprise partnerships (LEPs) and consortia of local authorities are being encouraged to develop local broadband plans and bid into BDUK’s pot of £530m in this parliament (and £300m expected in the following two years) to provide next-generation access coverage in areas outside of those that are attractive to commercial players.

The two key problems with rolling out future-proofed next-generation broadband infrastructure are well understood: it’s an expensive process (though arguably far less expensive than other major infrastructure projects), and large scale providers like BT are only likely to deliver to around 60% of the population with no public subsidy. The divide between the ‘commercially viable’ and the unviable ‘Final Third’ has largely been determined by the investment policies of BT and to some extent Virgin Media.

Many of the key economic issues were discussed in the Analysys Mason report on ‘The Costs of Deploying Fibre-Based Next Generation Broadband Infrastructure' (BSG / Analysys-Mason, 2008). Based on a set of core assumptions relating to deployment costs, demand and other issues, it put the costs of FTTC to 90% at £5.5bn (later revised to £6bn), FTTH at £25-28bn (though a later revision that included significant cost reductions, particularly in civil engineering, suggested this could be reduced to approx £15bn). This approximates to £240 per premise for FTTC, and somewhere between £600 at the lower end and £1450 per premise for FTTH.

As with all research projects of this nature there are necessarily some big assumptions in the Analysys Mason report, particularly on issues of consumer and business demand, access to existing physical infrastructure and the costs of new civil infrastructure. As a rule of thumb it is assumed that around 70-80% of the costs of telecoms infrastructure lie in civil engineering.

Changing these assumptions – e.g. the demand profile, or costs associated with digging, will have a big impact on the viability of rural broadband schemes.

Local broadband plans have to take account of existing local provision and to map areas that are not likely to be covered by BT’s current plans. Further information on mapping services and demand is given in the Mapping section of the Knowledge Base (see 'The importance of good maps')..

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Identifying Market Failure

Notspots, Slowspots & Community Initiatives

Local broadband plans need to include notspots and ‘slowspots’ – areas that currently receive services delivering less than 2Mbps downstream. These amount to around 10% of homes and businesses in the UK as a whole. In 2010 BIS commissioned a theoretical exercise to address these areas which can be downloaded here. This provides a very useful summary of the different technical approaches that can be taken to tackle notspot problems. Clearly it is desirable to bring these areas up to the same level of service enjoyed by better served areas and, whilst it is difficult, there are some innovative and pioneering organisations working to achieve this.

One of the main contenders is fixed wireless access. Ever since the problems experienced with first generation roll out local wireless broadband services have proved cost-effective at reaching more isolated areas. These are often run by small, private or community-owned enterprises. Having worked hard, over many years, for little reward, they will not thank local authorities that set up procurement processes that simply steam-roller over their efforts. Other providers are working on fixed line solutions including FTTP for remote, rural areas. This is clearly the most desirable option and should be encouraged.

The fall-back position for the most isolated premises is satellite broadband. In recent times the costs of satellite provision have reduced, making it more attractive; but issues such as signal latency remain.

The Technology section of this Knowledge Base covers the pros and cons of different technological approaches.

The national policy objective during ‘first generation’ broadband roll out was for Britain to have "the most extensive and competitive broadband market in the G7 by 2005." In the early stages of roll out BT stated that it was commercially viable to reach only about 60% of the population (familiar number?). This led to a range of different initiatives involving the public sector, local communities and smaller private operators setting up services or funding ADSL exchange enablement. Late in 2004 BT changed tack and announced the enablement of all but a handful of local exchanges, which gave rise to the ‘job done’ declaration by government, RDAs and BT.

At the time many people knew (and now it is widely acknowledged) that simply because 99% of the population are connected to an ADSL-enabled exchange, it does not mean 99% of the population being able to receive a good broadband service.

Many local schemes ceased when exchanges were enabled or funding dried up. Surviving projects and new entrants are moving on to include next-generation broadband in their plans and often offer local expertise, innovative solutions, invaluable industry knowledge and ways of bringing in other sources of funding. There is no central information resource about local schemes, although organisations like the Community Broadband Network and the Rural Broadband Partnership have much valuable knowledge.

Some projects and businesses are listed below and elsewhere in this knowledge base.

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Next Generation Broadband Players

There are now three large scale players that have announced significant investment in next-generation broadband – BT, Virgin Media and Fujitsu.

BT

In the private sector BT announced £2.5bn in their roll-out plans mainly for FTTC with some FTTH and other technologies in not-spots (e.g. BET  and satellite). They have also announced that if they win all £830m they will match it with further investment, though some commentators argue that this is what BT are likely to anyway.

Virgin Media

Virgin Media isengaged in an extensive programme to upgrade their network to the DOCSIS 3.0 standard, capable of delivering up to 100mbps downstream. Currently there no plans for significant extensions to the existing cable footprint covering around 50% of the population, mainly in urban areas.

Fujitsu

In April 2011 Fujitsu Telecom (Ftel) announced an investment of £1.5-£2bn in next-generation broadband focused on the rural 'Final Third'. This took many commentators by surprise. Fujitsu is not a company well known to the general public, but it is a big player in the telecoms industry as a supplier of broadband and mobile infrastructure. The partners in Ftel’s plans include Cisco, TalkTalk and Virgin Media. The plan is to create an ‘open access platform’ and starts with two substantial players in Internet services. The inclusion of Virgin potentially offers the prospect of Virgin extending its cable footprint beyond the existing franchise areas.

Local schemes

A variety of smaller, more local schemes using various mixes of public, private and community finance are in existence or under development. They include:

  • Rutland Telecom, [link to case study]
  • Independent Fibre Networks Ltd,
  • The flagship Alston Cybermoor co-op in Cumbria, [link to case study]
  • Other initiatives in Cumbria like Great Asby Broadband, Wennington and Wray in Lancashire,
  • Next Genus CIC delivering village-level FTTH in different areas, [link to case study]
  • Vtesse
  • The Welsh Assembly Government- supported Fibrestream Project in North Wales, delivered by Geo, [link to case study]
  • County Broadband in Essex, 
  • South West Internet and others.

Broadband procurement offers an opportunity to support local initiatives and projects and can thus be seen as part of the broader localism agenda

Procurement Processes

Previous Public Sector Broadband Projects

During the roll out of first-generation broadband, local authorities were asked to get involved in broadband procurement by central Government. Many public sector schemes were set up, often encouraged by central Government.

A number of specific projects were set up to meet different objectives, e.g. Project Atlas in Scotland, NYNet in North Yorkshire. More generally two of the principle mechanisms for public sector organisations to procure broadband services were the creation of Regional Broadband Consortia, operating on behalf of education services and more broadly-based Regional Aggregation Boards, known as Adits. The experience of the nine Regional Aggregation Boards was patchy at best. Set up in 2004 under a DTI initiative, just two remain: Adit North, based in Newcastle, and Adit South in London.

The Regional Broadband Consortia have proved more durable. Ten are in operation around the country (plus the devolved administrations) connected via the SuperJANET backbone. They offer a number of useful lessons for local authorities aiming to procure next-generation broadband services for their communities.

Framework Agreements

In 2010 JANET set up a telecommunications framework agreement involving 19 suppliers of services, from the very large – BT – to smaller, more specialist providers like Vtesse. The framework can be used by JANET(UK), JANET connected organisations, Regional Network Operators, members of the Purchasing Consortia, and the Regional Broadband Consortia.

The advantage of the framework is that it conforms to EU criteria and thus makes the procurement exercise simpler and easier to undertake. The disadvantage is that whilst frameworks are good for the procurement of standard commodity items, they may be too rigid when innovative products and services are needed. It can also be the case that with smaller projects economies of scale don’t come into play with the concomitant financial benefits.Frameworks are also fixed in terms of the supplier group for the lifetime of the framework agreement, though new entrants can be encouraged to engage as sub-contactors of existing framework members.

State Aid Compliance

State aid is a bugbear for many public sector projects. RBCs have experience in structuring projects so that they conform to state aid rules. This experience can be made available to local authorities developing next-generation broadband projects. More detailed guidance on state aid issues is given in the Policy & Regulation section of the Knowledge Base (see State Aid and Next Generation Broadband).

Encouraging Bidding Consortia

From a local authority perspective, putting together a procurement exercise that seeks one major supplier looks superficially attractive. It limits the number of bidders to a manageable group, simplifies the bidding process and simplifies the contractual arrangements. However the corollary is that smaller, innovative players may be excluded by the bidding criteria and thus opportunities to get better, more local solutions can be lost. It is also likely that the role of local communities will be more limited, perhaps just to demand stimulation and aggregation exercises. The appetite for local community investment is unlikely to be tested, except perhaps for an investment of labour to help reduce trenching and other costs. The real point is that one size does not fit all circumstances.

Two approaches that can be taken are to divide up the whole area into lots – smaller areas where particular local needs can be addressed, or to encourage consortia involving a number of suppliers to bid into the process. These two approaches are not mutually exclusive.

There is a legal and management overhead for local authorities running such processes which also needs funding as many LAs will struggle to find the resources internally. RBCs could be tasked to do this but again there is likely to be some funding requirement from government.

Special Purpose Vehicles

Projects like NYNet (see Creating a Broadband Backbone for North Yorkshire) are essentially special purpose vehicles (SPV), usually wholly or partly owned by the public sector, designed to exploit those assets for wider social and economic benefit. NYNet and similar projects are successfully making this provision available and in the process getting a bigger bang for the public expenditure buck. Other public sector networks are developing similar approaches. In Gateshead significant progress has been made in connecting up businesses to a high-speed network created by Gateshead Council and technology supplier Alcatel-Lucent organised through the SPV G-Ti (see Gateshead's Baltic Business Quarter Goes for Economic Growth).

Supporting Local Schemes

Some local authorities are thinking ahead and taking a more innovative approach than others. Both industry and government recognise that the combined investment on the table from the (currently stated intentions of) private sector players and government combined is not enough to fully future-proof the UK in terms of next-generation access. However, this need not be the case if local authorities are able to set the procurement criteria to encourage investment from other parts of the public sector, the private sector and local communities themselves.

One such approach might adopt a LEP-like process, with communities or parishes that naturally associate with each other joining forces as combined elements in a county-wide framework.

  • Some of these areas will have money to invest;
  • Some may be happy to sign pre-orders as collateral;
  • Some will dig the trenches;
  • While others will organise local demand registration schemes e.g. BT’s Race to Infinity.

Arguably such a framework will attract a wider range of bidders, greater scope for investment, and a more creative solution able to optimise every inch of every county.

Kent County Council has taken an imaginative approach to solving some of its local broadband problems. Rather than adopting a one-size-fits-all approach, it has supported projects designed to meet local needs and continues to offer grants to local projects. More on Kent's approach can be found on their Community Broadband page. 

Sewing Together the Patchwork

The growth of local schemes implies a “patchwork quilt” approach to next-generation broadband development. This is already the case with the many different projects and players around the country. An often expressed danger is that these will not enable competition at the service provider level – i.e. customers connected to a regional or local next-generation network won’t be able to choose the service provider they want. This is a problem of the commoditisation of broadband where scale matters. For major ISPs, the costs involved in interconnecting to dozens, or hundreds of local schemes, are prohibitive.

However, frameworks are either in existence or being developed to overcome this problem. One of INCA’s key projects is the development of a Quality Standard for local schemes to enable service providers to deliver services over them with confidence. This is linked to a framework involving over thirty ISPs. The first stage of the work is scheduled for completion by the end of July 2011. More information can be found at www.inca.coop or by contacting info@inca.coop.

Case Studies

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Manchester develops next generation access (NGA) Broadband

A key priority of Manchester’s statutory city region pilot is to expand and diversify the City Region’s economic base by creating the best conditions for innovation accelerated by next generation digital infrastructure.

Cities with good communications infrastructure are attractive to investors and have higher property values. They are better equipped to grow strong knowledge and creative economies. Today a good communications infrastructure means high speed, high quality digital networks that can keep up with accelerating demand and with the investment in competitor cities.

Dave Carter, head of Manchester Digital Development Agency (MDDA) at Manchester City Council says: “Demand for bandwidth is increasing exponentially. For fixed line infrastructure, only optical fibre can accommodate this increasing demand. This means using fibre for the whole connection fibre to the premises (FTTP) complemented by next generation wireless networks.”

“Other technologies and planned enhancements will only help for a very short while, enabling regions to compete more effectively with other parts of the UK but not with the other parts of the world, which they will need to do if the UK is to fully realise its opportunities to be a leading global player.”

The Oxford Road Corridor network is a pilot project to test next generation access networks, with the ambition to grow the project to Greater Manchester under the remit of the Manchester Digital Development Agency (MDDA), an arm of Manchester City Council.

Manchester is one of two statutory city regions in the UK where a new model of development is being tested – Leeds is the other. There are ten local authorities within the Manchester region, all of which want to develop next generation access – often referred to as FTTP, which includes business as well as domestic fibre to the home (FTTH). The implies a completely different type of connection compared to conventional copper cabling to premises, with much higher bandwidth or transmission speed, and the ability to expand bandwidth by changing active equipment.

“It is easy to set up a 100 megabit FTTP service, but not much more difficult to make it 1 gigabit,” argues Shaun Fensom of Manchester Digital, a non-profit trade association that is independent of the public sector (not to be confused with MDDA). “Fibre also scores on other factors such as latency, jitter, quality of service (QoS) and symmetry. Latency is critical in cloud computing and jitter is critical in high definition video conferencing for example. A raft of new applications will become available as a result of low latency, and of symmetry, that is same speed upload as that of download.

“The commonplace DSL services currently available mostly have asymmetric (slower) upload, as do some fibre networks to be fair, but there is an opportunity to have a much more symmetrical service than people are used to with ADSL.”

Because DSL is so dependent on distance, broadband customers routinely experience a halving of the nominal bandwidth quoted by ADSL service vendors. Rivalling FTTP as a technology for next generation networks is fibre to the cabinet, or very high bitrate digital subscriber line (VDSL) – the final cabling from the street cabinet to the premise is still copper, with a download speed claimed to be up to 60 megabit and 10 megabit upload.

Fensom argues that this still does not solve the high contention issues also experienced by customers, and there is still a distance dependency from the premise to the cabinet. The Corridor covers an area of South Manchester and includes some large hospitals, universities, a science park, a techno park, and mixed demographic housing.

“The two-year Corridor pilot will connect 1,000 homes and 500 businesses to determine what kind of business models would work, what mix of services are in demand and what prices are to be charged for these services. It will look at innovative fibre installation techniques like slot-cutting by saw on a road instead of digging a trench in order to drop fibre cable in, or like running fibre through sewers.

“It will be an open network where the city council will be the initial network operator, working with a private sector partner called Geo, which designs and builds bespoke fibre networks. It will not offer connection services directly to the customer, but through service providers. This provides an open platform for competition between service providers, which could include telephone suppliers, internet service providers (ISPs), digital TV vendors, voice over IP vendors, and so on.

“In the UK, it is not unusual for one vendor to offer a mix of services as a bundle, but where fibre networks are built in other parts of Europe, customers buy individual services from several competing companies operating on the same open network.”

Fensom explains that a small ISP may buy from the network a connection to resell through to the customer which is ‘fully lit’, while a larger ISP may want to ‘light’ the connection itself, or in other words, to provide the active equipment at each end of a connection provided by the network as ‘dark’ fibre .

This opens up whole value chains of different types of access, with vendors occupying different parts of the value chain. Those buying dark fibre make higher margins because they have to commit to a larger investment in active equipment. The first connections will be made in mid-2010.

Fensom concludes: “The ultimate ambition to connect businesses across Greater Manchester would need to go alongside developments in next generation connections to homes. Amsterdam has done a great deal of this already, by connecting 40,000 homes and businesses to fibre networks, and Manchester has drawn much inspiration and indeed, assistance from Amsterdam City Council. If you were to name the three most exciting places in Europe for the development of digital industries, covering everything from new media and web design through to cloud computing development, they would be London, Amsterdam and Manchester."

One of the reasons The Corridor was chosen as a starting point, was that it has an internet exchange in the middle, with a lot of internet peering activity where the connections between the private networks take place – they can exchange traffic locally without charging each other.

“There are only two places where significant peering activity goes on in the UK: London and Manchester. As a consequence of peering, transit prices are very low. There is no other place in the UK where you can do that outside of the London Docklands”, added Fensom.

 

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Gateshead's Baltic Business Quarter Goes for Economic Growth

In order to create economic growth locally, a high speed broadband infrastructure was needed for Gateshead’s Baltic Business Quarter. But with private investors nervous of committing the funds, Gateshead Council took the bold decision to create its own state of the art network. But how could it justify the expense?

All regions can benefit from the efficiencies that broadband brings to a local economy, but often an instant return on investment is not possible, as the timeline for effects of the fiscal stimulus cannot be quantified.

In these cases, the private sector is reluctant to invest as impatient shareholders want payback within a few years.  

In the northeast Gateshead Council took the initiative and collaborated with technology provider Alcatel-Lucent to build its own broadband infrastructure. The resulting Open Access Broadband Network (OABN) could provide the communications technology for local industry that could catalyse economic regeneration of the area, the council argued.

“We wanted to attract sophisticated users of IT who could create high quality jobs for local people,” says Councilor Mick Henry, leader of Gateshead Council. “The firms that use the latest technology will offer good quality sustainable employment. They will want access to high-speed broadband infrastructure,” he says. But first, in order to gain the funds, it needed help from its partner to make the business case.

To get funding for big infrastructure projects, councils must prove the investment is in the best interests of their communities they serve. Building a watertight business case for the deployment, with projected returns of economics stimulation and social inclusion, is complex. Alcatel-Lucent’s Bell Labs business modeling team helped assess all the variables involved, such as capital investment (CAPEX) needed, the cost of all civil works required for fibre installation, the expected take up of services over time (based on analysis of the market and the local communities) and the cost of operating the network year on year.

Now built, the OABN is a fibre optic network offering 10 Gigabytes of bandwidth with a capacity that could scale up to 40 gigabytes as and when needed.

This is the sort of capacity needed by high tech companies who deal in services like video conferencing, media streaming and disaster recovery. Attracting these sorts of companies will attract employers who provide skilled jobs and a sustainable high value economy.

The openness of the new OABN infrastructure enables local service providers to join and deliver next-generation services over the network with minimal investment. If it was funded by a private investor, they would need to charge as much as £40,000 for a connection, in order to get back the money they spent on construction. The publicly funded network will promote competition between service providers locally, potentially pushing down communications costs for businesses working at Baltic Business Quarter and helping them compete more effectively in national and global markets.

The new infrastructure means the council can offer better services for local people. As the network extends into a nearby residential area it will support rich multimedia services, distance learning and a range of electronic healthcare services for local people.

The Baltic Business Quarter could only attract the new business if it offered something no-one else in the local area could offer. Not just broadband but a state-of-the-art, fibre-optic broadband infrastructure. In addition to connecting the businesses in Baltic Business Quarter, this new network would enable any service provider to deliver broadband to local businesses with minimal investment.

The G-TI network has delivered future-proof fibre optic infrastructure to Baltic Place, argues says Stuart Hopley development manager at Robertson Spaceworks. “As the fibre is already installed it makes it easy for service providers to target new customers and easy for occupiers to access the latest applications and technologies,” says Hopley. “This is great for ISPs, great for occupiers who have maximum choice and maximum flexibility and great for us, because it makes Baltic Place attractive to world class businesses who need world class communications," says Hopley.

Now the site for the new £39 million Gateshead College, and the regional HQ of the Open University, Baltic Business Quarter could boost sustainable economic growth locally by creating skilled jobs in digital industries with a solid long term future.

Broadband widens the number of skills available to local employers and makes the local workforce more scope too. It helps connect employees seamlessly in distant locations and, vice versa, helps local employees to work for remote employers. This helps boost local employment and gives local businesses better access to specialist skills.

Technology can streamline a range of business processes. It makes sourcing products easier; fine tunes the supply chain management and improves customer service. It opens up new channels for online buying and ordering and gives companies the insurance of a disaster recovery service.

As a result, Gateshead businesses will be able to compete effectively on the international business stage and the local economy will attract more inward investment.

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Creating a Broadband Backbone for North Yorkshire

For a long time, the citizens and businesses of North Yorkshire struggled to get the full benefits of connectivity. There was a distinct communications blockage primarily, many suspected, because the region lacked a decent broadband infrastructure. 

Many in the region suspected that the area was getting a raw deal and that lack of connectivity was harming the region. Skills could not be brought online, economies could not be achieved in manufacturing and production processes and trade could suffer. The public sector also suffered from the same lack of access to high speed broadband, to service its networks and citizens.  Therefore North Yorkshire County Council, in consultation with Yorkshire Forward, created NYnet Ltd to build a high speed fibre network across the county.  The objectives of the new network would be to bring faster, cheaper and better broadband services to the public sector,  to help local businesses get access to business broadband through partnerships with Service Providers, and to work with Communities to help bring them access to next generation broadband in areas where there was no broadband service at all.

The County Council awarded its entire Wide Area Network (WAN), a £42.4m 10 year broadband contract, to NYnet in 2008. The contract was scheduled to be completed over two years providing broadband access for 550 sites beginning with the council’s Disaster Recovery and Storage Area Network facilities in Scarborough. NYnet has now connected all council sites, completing the roll out according to schedule.

As a result of the connection, County Council sites can now receive core broadband speeds up to 60 times faster than previously available, with 35 per cent more bandwidth, at no additional cost. The new connection has established a resilient and scalable broadband network able to meet the County Council’s future IT requirements.

The NYnet connection, has enabled the County Council to deliver massively improved services to the public across North Yorkshire, says David Sadler, Assistant Director in charge of ICT Services at North Yorkshire County Council. “NYnet is a unique technology enterprise which has made a real difference to the economic and social fortunes of the county providing the latest broadband technology at no extra cost,” says Sadler. “The increased efficiencies made possible through NYnet’s technology such as shared council services, and back office functions, has provided excellent value for money and delivered huge cost savings.”

NYnet now provides high-speed broadband connections to nearly 80 per cent of public sector services in the county including offices, schools, libraries and 15 fire service sites across North Yorkshire.

As a result of the high-speed broadband connection around 350 schools such as St Aidan's in Harrogate, Arkengarthdale near Richmond and Lady Lumley’s in Pickering will have greater opportunities for online learning and teaching support.

Lady Lumley’s in particular suffered from a very slow and unreliable broadband connection, which made teachers reluctant to use online resources.

The new fast and reliable internet access has improved learning and teaching and has enabled the school to establish a virtual learning environment with 24 hour access, facilitating shared resources, remote group collaboration and student communication with teachers.

“The NYnet network has moved us into the 21st Century,” says Derek Simpson, Network Manager at Lady Lumley’s School. “I don’t know how we would operate without it now.”

The benefits of the system became immediately apparent during the recent ash cloud crisis which saw six teachers stranded abroad but able to keep in touch with pupils and colleagues via the virtual learning environment.

North Yorkshire’s libraries are also benefiting from the connection which has seen 44 sites connected to the high-speed network enabling libraries to offer customers free or low cost computer access.

The fast, stable and reliable connection has increased the range of online facilities available to library users such as access to online reference material and an online requests and renewal service.

NYnet Chief Executive David Cullen promises that the next generation network will provide the council with the flexibility and capacity needed to meet the IT requirements of the future. “I am of course delighted that NYnet has connected the entire network on schedule,” he says. He now looks forward to offering exciting new services such as high-quality video conferencing.

In terms of poor broadband services in rural communities, David Cullen, Chief Executive says NYnet suspected North Yorkshire was one of the most poorly served regions in the UK in terms of broadband provision. Yorkshire Forward commissioned a broadband speed survey for the region to track actual speeds on lines.  The North Yorkshire coverage results of this survey were shared with NYnet, which revealed the true scale of the problem. It demonstrated that North Yorks was one of the worst regions in the UK, with many rural communities with no service at all or at best well below the 2Mbps set out as the Universal Service Commitment.

This information was enough to persuade North Yorkshire County Council to find the funds to bankroll a community broadband pilot project.

The first trial project was in the remote North Yorkshire village of Newton-on-Rawcliffe, where 140 residents were chosen to benefit from high-speed, next generation broadband network that matches anything available in a major city. The project was managed by NYnet and delivered by the Community Internet Service Provider, NextGenUs UK CIC. The village and neighbouring hamlet, Stape, suffered from poor broadband service.  NYnet upgraded the fibre service to Lady Lumley’s High School in Pickering. NextGenUs were then able to connect from the school and beam a wireless connection into the village hall in Newton.  The residents can now enjoy reliable high speed broadband and this has transformed village life.

“We were surprised by how quickly people took to the new network,” says Billy Garrett, “we thought it would take a while to get people used to the idea, but adoption was almost immediate.”

A second pilot project is being implemented in the Farndale and Rosedale communities in the North Yorkshire Moors.  This second scheme has the potential to reach around 400 households with next generation broadband access. The success of these two pilot schemes is being used to help NYnet attract further funding to enable communities in 50+ ‘not spot’ areas identified by the Yorkshire Forward report.

“What matters most to all of us in the company is the overwhelmingly positive response from customers and the benefits we are bringing to communities across North Yorkshire,” ” says Cullen, “this is testament to the effectiveness of NYnet.”

NYnet, formed by Yorkshire Forward and North Yorkshire County Council with funding from the European Union, provides a super-fast internet network to ensure North Yorkshire is not ‘left behind’ by the rest of the world in the next phase of the internet revolution.

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South Yorkshire Ubiquitous Next Generation Broadband

The investment made by Digital Region to create a ubiquitous next generation broadband infrastructure could reinvigorate local industry and make South Yorkshire one of Europe’s most attractive and dynamic business environments. Senior business development manager Richard Jepson says he is looking forward to meeting this challenge. After all, they’ve solved this problem before and now they can apply that experience and do an even better job.

The first step of the project is to identify the scale of the task, as on the face of it areas like South Yorkshire have a mountain to climb before they can catch up with the rest of the field in Britain’s competitive digital landscape. Typical of regions hit by the decline of traditional manufacturing industries in the UK, there’s high unemployment, a potential workforce with the wrong skills and a populace that finds itself on a lower than average income. Though local universities create thousands of high value science and technology graduates, few choose to settle in the region. The roads that brought commerce into the region now serve as an efficient brain drain.  Businesses that operate in the local market find themselves competing for customers with a less than average amount of disposable income. It is a tough region in which to compete. Creating one of the best large scale communications networks in Europe will reverse this decline and Digital Region is taking responsibility for making this improvement.

In the digital age a state-of-the-art communications upgrade can rejuvenate a region just as the road and rail network brought prosperity to the region in the industrial age. It could encourage more graduates to stay and set up businesses in the area. But as with the motorway building programmes of the 19th and 20th century, the construction of an internet superhighway involves considerable challenges.

Digital Region is the modern road builder. The ‘tarmac’ it is laying is a 1200 kilometre ring of fibre ultimately connecting all 54 local communications exchanges and more than 1,500 street cabinets in South Yorkshire.

The project is funded by Yorkshire Forward, the European Regional Development Fund (ERDF) and the four local authorities of South Yorkshire. Thales, a partner of Digital Region, has also invested in the project, which is a £91m build of which £27m came from the ERDF. The building programme is scheduled to take three years, with Phase 1 aimed at covering 80 per cent of South Yorkshire by May 2012. Any revenue raised will be re-invested into running the network and Digital Region says it aims to use any surplus to grow the network coverage up to 100 per cent. Thales is responsible for the design, build and operation of the Digital Region network and leads a consortium including Alcatel-Lucent and K-Com.

The new VDSL-based network that Digital Region is building represents a flexible product-set on which multiple service providers can each provide their own single physical connection, using their own layer 2 VPN, based on VPLS technology. These private lanes on the superhighway give the service providers the ability to provide high tech services to consumers that were previously unfeasible.

So Digital Region builds the infrastructure and local internet service providers are akin to freight managers who create the services that will be enjoyed by local business. A key commercial driver is based around ISP’s not having to invest unbundling equipment in all 54 exchanges in South Yorkshire. This is complemented by the technical attraction for service providers in that they can take advantage of private clouds based on VPLS (layer 2) technology, which they can then retail or sell on through their white-label services.

Consumers and businesses will be largely oblivious to the technicalities of private ‘IP-cloud’ functionality facilitated by VPLS. The concepts that will stimulate them into greater economic activity will be the applications such as video-conferencing, for example, with its many offshoots like telemedicine. The bottom line is that the delivery of quality sound and images at high speed could provide productivity boosts in business and the public sector. Consumers, for example, are more likely to buy entertainment from service providers. Meanwhile improved connectivity is more likely to provide local traders with access to new markets as the speed of access to their web sites improves, and the flow of information with customers and suppliers increases. Faster, more powerful networks mean that online customers are more likely to stumble across suppliers in South Yorkshire as they search the web for goods and services.

The efficiencies in business processes and fine tuning of the supply chain will make this region a better place for trading, making local companies more competitive. It also aims to make South Yorkshire a more attractive place where other industries could settle, bringing much needed investment into the region.

Meanwhile in the public sector the project has equally big ambitions. The ability to handle images and video more effectively will make telemedicine viable for delivering some medical consultations and other services. If patients can receive more care at home, it means a saving on journey times for both patients and medical staff and saves health service resources. Schools, on the other hand, can benefit from the deployment of next generation broadband, making virtual 1-2-1 lessons more effective and widening the scope of expertise, with the potential for instance of enabling experts from other regions to deliver lessons remotely. Councils will be able to address their stakeholders more effectively and deliver information more comprehensively. Digital Region even suggests that the work of Job Centres could be enhanced giving job seekers better advice and access to electronic job boards.

The fast network will also offer a layer of intelligence onto other infrastructure builders, such as the Highways Agency, Network Rail and the National Grid. The metering and control of the roads, rail, water and electricity networks will also bring about greater efficiencies, lower running costs and a boost in the provision of services.

The days when these dividends begin to become apparent are some way off however, and the economic benefits will not materialise overnight. It would be unrealistic to assume that the minute construction of the network is completed in 2012, the economy will immediately be the strongest in Britain.

But just as rail and road links brought prosperity to the region in the industrial revolution, the Digital Region dividend could eventually catalyse a new explosion in trade and commerce. The reaction may be a slow burn but Digital Region is confident that it will create handsome returns.


 

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ADSL Asymmetric Digital Subscriber Line
ADSL Max BT's term for their commercial rate-adaptive DSL products
ADSL2 ADSL up to 12Mb
ADSL2+ ADSL up to 24Mb
Aggregation Node A Point of Presence (POP) aggregating supply of local Next Generation Access (NGA) subscribers, or service provision from multiple suppliers, or both.
AIP Access Infrastructure Provider
ALA Active Line Access
ANCP Access Node Control Protocol
ATA Analogue Telephony Adapter
B2B Business to Business
BIS Department for Business, Innovations & Skills (Govt. dept.)
BRAS Broadband Remote Access Server
Brownfield Abandoned or underused industrial and commercial facilities available for re-use
BSG Broadband Stakeholder Group
CBN Community Broadband Network
CGA Current Generation Access
CHP Central Handover Point
CO Central Office
ConDoc Consultation Document
COTS Commercial, Operational and Technical Standards Project for Independent Local Access Networks (The COTS Project)
CP Communication Provider (same as Service Provider)
CPE Customer Premise Equipment
CVLAN Customer Virtual Local Area Network
DEA Dedicated Ethernet Access
DLE Digital Local Exchange
DSLAM Digital Subscriber Line Access Multiplexer
EAD Flex Ethernet Access Direct - Flex
E-ALA Ethernet Active Line Access
EMP Equivalence Management Platform
FDP Fibre Distribution Point
FIRS Fibre Integrated Reception System
FTTC Fibre To The Cabinet
FTTH Fibre To The Home
FTTP Fibre To The Premises
FTTx Fibre To The x
GEA Generic Ethernet Access
GPON Gigabit Passive Optical Network
Greenfield Piece of undeveloped land (the 'opposite' of Brownfield land)
Head End A central control device required by some networks
ILAN Independent Local Access Networks
INCA Independent Networks Cooperative Association
IRS Integrated Reception System
LLU Local Loop Unbundling
LTE Long Term Evolution
MALR Max Achievable Line Rate
MDU Multi-Dwelling Unit
MPF Metallic Path Facility
NGA Next Generation Access
NICC UK Standards body, looking at Ethernet-ALA standards for NGA
NTE Network Terminating Equipment
NTE5 The NTE5 is the type of master socket that is commonly installed. It allows easy testing of the BT network by removal of the front lower faceplate to reveal the test socket. IDC terminals on the rear connect to the incoming BT line, IDC terminals on the front faceplate allow the end user to easily connect internal telephone extension wiring. 
OLT Optical Line Termination
ONT Optical Network Terminal
Open Access Term given to describe a network or access that allows multiple providers/CPs to offer service
OSCP On Site Connection Point
P2P Point To Point
PATS Publicly Available Telephone Service
PCP Primary Connection Point - BT term to describe the cabinets at the side of the road
PIA Physical Infrastructure Access
PON Passive Optical Network
Portal A gateway or site that functions as a point of access - in this case, for ordering
POTS Plain Old Telephone Service
PPP Point to Point Protocol
QoS Quality Of Service
R1300 BT - part of EMP
RDA Regional Development Agency
SLU Sub-Loop Unbundling
SMP Significant Market Power
SMPF Shared Metallic Path Facility
SP Service Provider
Splitter Allows a single fibre optic cable to serve multiple premises - used in PON networks - no power is required
SSFP Service Specific Face Plate
Superfast broadband Term given to broadband speeds of over 24Mb (ADSL2+ speeds) 
SVLAN Service Virtual Local Area Network
TSB Technology Strategy Board
TWG Triallist Working Group
USO Universal Service Obligation
VDSL Very High Bitrate DSL (also known as VHDSL)
VDSL2 Second-generation VDSL2 systems (ITU-T G.993.2 Approved in February 2006) utilize bandwidth of up to 30 MHz to provide data rates exceeding 100 Mbit/s simultaneously in both the upstream and downstream directions. The maximum available bit rate is achieved at a range of about 300 meters; performance degrades as the loop attenuation increases.
VLAN Virtual Local Area Network
VoNGA Voice Over NGA
VULA Virtual Unbundled Local Access
WBC Wholesale Broadband Connect
WBMC Wholesale Broadband Managed Connect
WiMax Worldwide Interoperability for Microwave Access
WLR Wholesale Line Rental
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