Scotland spends £25m for universal broadband

Scotland has done more than any other part of the United Kingdom to bring broadband to its whole territory. Following a long-term strategy, the Scottish Government, has committed almost £25 million to achieve what amounts to a “Universal Service Commitment” on broadband.

A set of overlapping initiatives has made 0.5Mbps broadband access available to every home and business in Scotland. Unlike the 2Mbps USC proposed by Lord Carter, Scotland’s 0.5Mbps is in place now and provides virtually 100% coverage. In principle, anybody has been able to get at least 0.5Mbps at an affordable price if they want it.

The origins of the strategy go back to August 2001, when it became clear that the market was leaving Scotland well behind, with broadband coverage just 43% as against 63% for the UK as a whole. The newly-created Scottish Executive (now known as the Scottish Government) set the objective of ‘pervasive and affordable broadband in Scotland’.

“Reaching such wide coverage in a country which includes some of the least populated areas in Western Europe has been a major feat,” points out Tim Johnson, Chief Analyst at Point Topic. “It may not be how everyone would choose to spend the money, but I think it has a huge symbolic importance for Scotland. Bringing broadband and modernity to even the most remote corners demonstrates the unity and cohesion of the national territory.”

Scotland’s high level of broadband coverage has been achieved through a series of programmes designed to stretch and supplement what can be achieved by market forces.

Figure 1: Exchanges with government broadband intervention in Scotland

ADSL MAX SSI – ADSL Max broadband platform provided by Scottish Government Supply-Side Intervention

CC – Broadband fixed wireless networks covering the Western Isles (Connected Communities) and Tiree

BT – Exchanges where full broadband is provided by BT without government intervention

EA SSI – Exchange Activate broadband platform provided by Scottish Government Supply-Side Intervention

Four main programmes have been responsible for bringing broadband to the whole of Scotland.

Broadband for Scotland Intervention: an investment of £16.5 million to upgrade 378 of Scotland’s smallest telephone exchanges for broadband

Exchange Activate Product: development and provision of a limited broadband platform, used originally in 148 of the very smallest exchanges, all within the budget and remit of the Broadband for Scotland intervention

Connected Communities Network: a broadband fixed-wireless network covering the more thinly-populated parts of the Outer Hebrides at a cost of £5.15 million

Broadband Reach Project: a programme intended to ensure that any home or business premises can receive at least 512kbps if desired, costing up to £3.3 million.

In addition, the Scottish Government is spending another £102 million on the Pathfinder Project, to provide broadband connectivity to over 1250 public buildings in the more remote parts of the country.

The Scottish Government has shown that universal broadband service can be achieved, at least up to the level of 0.5Mbps, and the cost need not be huge. Its investment of £25 million corresponds to a little over £10 for every home and business premises in the country and it should show a significant return through direct revenues and general economic stimulus..

On the other hand, the numbers of people being reached by these initiatives is quite small. Point Topic estimates that Broadband for Scotland covers about 150,000 people with a take-up of some 36,000 residential and business lines as of mid-2008. Thus it has required an investment of about £450 per line so far. Connected Communities shows a cost of about £3,400 per line and Broadband Reach is budgeted for an average of £870 per line.

“One could argue that the money might more usefully be spent on bringing internet access to the hundreds of thousands of no-net homes in the deprived areas of cities such as Glasgow and Dundee. But politics and society is not just about strictly financial calculations. The benefit of these schemes to a shared vision of Scottish identity and development is tangible. Bridging the social digital divide will be a longer and more difficult task,” concludes Johnson.

***END***

For map image see:

http://point-topic.com/content/ukplus/shortreports/images/bbv171fig1.gif

or please contact:

Point Topic: Oliver Johnson

Email: oliver {at} point-topic(.)com

Tel. +44 (0) 20 3301 3303

About Point Topic

http://www.point-topic.com

Point Topic is an analyst company focusing entirely on broadband. Point Topic’s international services have a global reputation for providing the most up-to-date and authoritative user statistics, supplier profiles and applications reports on DSL, FTTx, cable and other broadband services worldwide.

Point Topic, reg. in England 3503830. 61 Gray’s Inn Road, London WC1X 8TL.