£363 million to ‘take broadband to all’ in England and Scotland

As part of the Government’s £530 million investment in the UK’s broadband network, Culture Secretary Jeremy Hunt today announced how much money has been allocated to each English county (PDF 153Kb) and to Scotland.

English counties are set to receive £294.8 million, and Scotland £68.8 million.

This investment will ensure that the UK has the best superfast broadband network in Europe by 2015, with 90 per cent of homes and businesses having access to superfast broadband and for everyone in the UK to have access to at least 2Mbps.

To access these investment pots, local authorities and the Scottish Government will need to play their parts. In England each county council or local enterprise partnership will lead broadband roll-out in their area, draw up an effective delivery plan, and match the Government’s investment with European, their own or private funds. In Scotland the Scottish Government will need to consider how best to use the funds.

“Vital to economic growth”

Mr Hunt said:

“Fast broadband is absolutely vital to our economic growth, to delivering public services effectively, and to conducting our everyday lives.

“But some areas of the UK are missing out, with many rural and hard-to-reach communities suffering painfully slow internet connections or no coverage at all. We are not prepared to let some parts of our country get left behind in the digital age.

Don’t suffer in silence

Mr Hunt urged those suffering the frustration of slow internet connections to “make it clear to your local elected representatives that you expect them to do what is needed to access this investment and to deliver broadband to your community.”

The private sector on its own will take superfast broadband to around two-thirds of UK households and businesses – this funding will be used to help take broadband to the remaining third by making it viable for business to invest. Funding allocation announcements have already been made for Wales and Northern Ireland.

The allocations made today are based on need – we have looked at the areas where the market will fail to deliver superfast broadband to enough premises on its own, and the cost of that. It is not based on the number of people living or working in a county.

Areas receiving most funds

  • Cumbria: £17m
  • Devon and Somerset: £31.3m
  • East Sussex: £10.6m
  • Kent: £9.87m
  • Lancashire: £10.8m
  • Lincolnshire: £14.3m
  • Norfolk: £15.4m
  • North Yorkshire: £17.8m
  • Suffolk: £11.68m

“Better value rural broadband” says Ofcom

Millions of homes and businesses in rural parts of the UK could get better value broadband services by the end of this year.

This follows Ofcom’s decision to significantly reduce the prices that BT Wholesale can charge internet service providers (ISPs) in parts of the country where it is the sole provider of wholesale broadband.

The price reduction will be 12% below inflation per year and will apply to services provided using BT’s wholesale broadband network.

Ofcom expects these price cuts to generate more competition between retail ISPs and to lead to cheaper retail prices which will benefit consumers.

Better quality services

The changes may also lead to better quality services by enabling ISPs to allocate more bandwidth per customer which could deliver faster broadband services.

This could benefit around 3 million homes and businesses. These are mostly in rural areas including parts of Scotland, Wales and Northern Ireland as well as the South West of England, Norfolk, Yorkshire, Cumbria, Northumberland and other areas.

Ofcom also expects the level of the charge control will incentivise efficient investment by ISPs to deploy their own networks in these areas to compete with BT Wholesale and incentivise BT Wholesale to upgrade services where it is efficient to do so.

Lower prices

Ofcom’s charge controls could narrow the difference between prices that consumers in rural and urban areas are paying for broadband services.

This difference is mainly due to the absence of local loop unbundling (LLU), the more limited set of bundled offers available and the higher costs of delivering broadband to customers in rural areas.

LLU is a process where a phone company other than BT installs its own telecoms equipment into the local BT exchange. It can then offer its own direct phone or broadband service.

Ofcom’s aim is to incentivise BT Wholesale to continue to improve its efficiency. This could make it cheaper for other communications providers to roll out services and should ultimately benefit consumers in those areas through lower prices.

Faster broadband

The charge controls could also improve broadband speeds in rural areas in two ways.

If wholesale broadband costs are reduced, ISPs should be able to buy more capacity for their customers without increasing their costs. This could result in faster broadband for rural areas.

Ofcom will also exempt ADSL 2+ technology from charge controls. This should encourage BT Wholesale to invest in this new technology where it is cost effective to do so.

ADSL 2+ is capable of supporting faster broadband speeds than ADSL, with maximum possible speed of 24 Mbit/s over the copper network.

Ofcom expects the charge controls to come into effect by mid August 2011.

Recently, Ofcom published interactive online maps of fixed broadband which show a picture of broadband speeds, take-up and availability of superfast broadband in each area of the UK. Click here to access the maps.

Lifting wholesale regulation where competition is effective

Today’s decision follows action taken by Ofcom in December to lift wholesale regulation in more areas of the country where it concluded that broadband competition is working well for consumers.

Some 78% of UK households are now served by effective competition in mainly urban or densely populated areas, following the continued success of LLU. This has increased from around 69% of households in May 2008.