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8. Conclusions
This study was commissioned to conduct research to examine the broadband 'reach' issue in Scotland.
The key objectives of this research are to:
a) examine the nature and extent of the broadband reach problem
b) investigate potential technological solutions for the reach issue
c) analyse the options for operators or Government to resolve the issue
d) provide a recommendation (and model) for the best approach to the reach issue.
These objectives have been addressed as follows:
8.1 Nature and Extent of the Reach Problem
We have investigated the various sources of data available from the Scottish Executive, K-Map and BT. Under a Non Disclosure Agreement, BT has provided figures for the estimated number of lines in Scotland that are not capable of receiving broadband under current conditions.
These customers will be a mix of clusters and of individuals scattered across the country and fed from any one of the BT exchanges. A total of 47 clusters of various sizes have been identified at this stage but this will evolve over time with new sets of information and as demand changes.
8.2 Potential Technological Solutions
From our research, it is clear that the development path within BT is focused on ADSL2+ through the 21 CN upgrade programme, followed by trials and subsequent implementation of VDSL2 in the future. All of this is designed to increase the coverage of video capable broadband for the next development in services.
Investment by BT in new cabling and solutions, such as remote DSLAMS, involves significant effort, and has to demonstrate a clear return on investment. For small pockets of out of reach subscribers, this is unlikely to be the case, and additional softer issues, such as community inclusion have to be raised.
We believe that the best option for pursuing BT to address 'not-spot' issues will be to encourage the upgrade of the local loop cabling plant, where serious performance issues occur and significant clusters of users are affected.
However, there will be areas where investment in local loop will not address the issues of delivery to the more isolated clusters and, in this case, alternative options must be investigated. From our review of the available options, two solutions stand out as offering potential for delivery. The first of these is WiFi networks, which have been successfully implemented in a number of localities, including towns and villages in Scotland.
Finally, for those instances where broadband requirement is extremely isolated and provision of wireless is not practical, the solution may be a one-off satellite installation.
8.3 Options to Progress
As the private sector is not currently addressing the 'not-spot' position due to the poor business case, there are two main options for the Executive to consider in response to the issue.
Firstly, the Executive could do nothing and leave the situation as it is. The argument being that Scotland is already showing a high level of availability and is one of the leading countries in the UK. There has never been a commitment to provide broadband to every household in Scotland and enough had been done.
However, we believe that the Executive may wish to pursue some form of intervention for a number of reasons, but, primarily, down to the expectations raised. The Executive has clearly stated that criteria and potential solutions on 'reach' will be developed. In addition, out of reach subscribers have been encouraged to contact the Executive to log their issues, which all adds to the view that something is going to be done. As the availability figures get closer to 100%, and even the most remote areas are now obtaining service, expectations will increase. Any such intervention should follow a well-defined staged process and with recognition that, in some cases, locations are so remote that the high technical costs of provision are not acceptable to the Executive or the end-user.
Due to the widely held belief that telecoms and the provision of affordable broadband is economically and socially important, it would, therefore, seem sensible to consider a broadband USO. However, broadband USO is not currently being considered in this way because the market is already delivering broadband to approximately 99% of the population, in the UK at least. The EC does not consider this a priority issue, and is currently content for intervention projects to be created to deal with these problems 'at the fringes'.
Although Ofcom has so far kept out of the whole intervention debate, we believe they may now be just starting to take more serious note. A forthcoming joint Ofcom/ BSG event will be discussing this very issue.
In the meantime, however, we believe that the Executive may consider that some action must be taken to address at least the areas known about at the moment, with an appropriate approach set out for any future issues.
8.3.1 Implementation Model
Our analysis of the options to resolve this issue is based on an Implementation Model for intervention through a number of defined stages.
Assuming a decision is made to use funds to address this issue, the Implementation Model provides a proven, structured and disciplined approach based on sound principles that satisfy State Aid criteria. Importantly, the Model firstly addresses the requirement to work with BT to address as many of the areas as possible in the first instance, either as part of their normal upgrade programme, or through any available funds through SSI underspend. It is important to do as much as possible through this approach, and it will then be for the Executive to assess whether additional funds should be made available to pursue the Model further with provision of service through other means.
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