Lessons from Yorkshire – Caveat Venditor, or Seller Beware!

by admin on July 21, 2011

An interesting article from thinkbroadband.com commenting on a broadband scheme in Yorkshire called Digital Region.  The article raises some interesting lessons for all broadband schemes hoping to use the BDUK funding and applying the ‘open wholesale network model’:

Digital Region does carry a very salient warning to those parts of the UK currently looking into how to handle the BDUK funding as an open wholesale network is no guarantee of success. The vast majority of the public are unlikely to switch broadband provider until their existing broadband provider contacts them to offer an upgrade. Also the price must compete with what is already available, as many will look at the price tag before considering anything technical about the service even if they do.

It remains very risky to plan take the new government money available, build a network AND market it successfully – particularly with this week’s news of OfCom’s announcement of forcing wholesale price reductions of 12% year-on-year reductions in rural areas starting in August.  This saving comes as welcome news to some when gas and electricity is going the other way – but doesn’t seem make any sense at all when the industry is trying to build the case to invest in Next Generation networks.  OfCom also published the first interactive map of UK broadband last week which is of very limited value to schemes like ours.  The only value seems to the consultants who put it together and a few old-world Whitehall and Brussels officials.  Surely it is time for OfCom to have a big re-think what value it is really adding to the industry?  Or maybe we should give that job to the Guardian or Telegraph?

Add to this strange regulatory backdrop the fact that:

and the picture becomes very complex.

I really wonder whether the method by which the government has handed out the BDUK money is really the best way to spend valuable taxpayers money to get better broadband for the final third?  Most in the know think not.

However, there is some good news.  Europe are apparently going to be giving out billions of euros to broadband schemes – exact details to follow.  Let’s hope the euro itself survives to be a useful currency for us to draw-down!

So for folk like us looking to implement a project like ours it is “Caveat Venditor” indeed! Steering the whitewater raft to upgrade  Goudhurst’s broadband network down this particular river is going to prove quite a challenge!  In the current phase we are essentially surveying the stream and rocks.  Once we put the boat in the river for the first time it will be a different story!  Watch this space!

{ 1 comment… read it below or add one }

PhilT July 21, 2011 at 7:33 am

Years ago I was taught by London Business School that the role of Government is to stand naked in the marketplace and throw money away. BDUK appears to be just another confirmation of this theory.

The key to your success is probably to have no public subsidy or government involvement, then you can just get it right structurally and economically without pandering to absurd requirements.

Open Acess or Wholesale only is a high risk approach, build a retail proposition so you capture all of the retail revenue and can look after your customers. Provide a wholesale capability on paper and you’ll meet any regulatory requirements but nobody will bother you wanting to retail it, as is the case with Rutland Telecom and NextGenUs schemes.

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