£10 subsidy per premises grants 40meg broadband to Iwade in Kent
Thursday 08 July 2010 17:04:17 by John Hunt

A £10 subsidy per premises and some joined up thinking has granted the small rural community of Iwade in Kent access to super-fast broadband from Autumn 2010. The subsidy provided by a grant from Kent County Council has helped fund investment in to the service as this additional money has pushed the area in to the viable category from BT which has unlocked a further £62,000 of investment. This brings the total cost per premises up to £55.56 each based on the 1350 expected to be covered by this investment.

This has been made possible by the fact that the nearby exchange of Sittingbourne was already scheduled to be enabled for faster broadband using fibre-to-the-cabinet technology. Iwade had already set forth plans to improve their local broadband with a 10-person strong committee who had applied to Kent County Council for community projects. One option being investigated was the deployment of satellite based broadband, but when the nearby exchange of Sittingbourne was announced for an upgrade, it made sense to try and connect up to BT's nearby high-speed network.

"Up to now, broadband has always been about huge amounts of public money, but in the process of that we risk forgetting the small communities and we risk missing the chance to fill in places on the map that aren't viable for us to do on their own.

We haven't announced a lot of where the two-thirds of the UK that we'll be covering actually is yet, and a lot of that will then be susceptible to incremental increases with additional, alternative sources of funding. But because we're an ex-state monopoly, people look at us and think this is our job to go and install broadband where it simply is not economically viable. It's not. We're a private company.

It's going to depend on our ability to minimise the cost of deployment. If we see more people signing up, that may change the economics. But there'll still be a gap. The fastest way to find out how big that gap is is to get on and build the network.

I feel the 66 per cent roll-out will be a minimum, and I would fully expect us to go beyond that. But it's dependent on alternative sources of funding. The vast majority is likely to be public."

Steve Robertson, (Chief Executive) BT Openreach

This enablement is a great example of how those desperate for broadband can work out a solution that will work for them, and relatively cheaply. One could argue that the whole country could be rolled out in a similar fashion once BT have reached the 66% coverage as it should in theory become small incremental amounts of additional funding that will be required to make the step out to the remaining communities. The question is how many can actually get access to the relevant funding, particularly when central government is pulling in the reigns on government spending. It is also an example of why the campaign for 'final third first' may not be the best approach to get places enabled.

Perhaps one option would be for BT to introduce a higher installation fee in these more expensive areas. When broadband first became available, businesses used to pay £260 for installation with home users paying £150. Current install prices for fibre-to-the-cabinet are £75 excluding VAT, but a special offer is running until the end of the year reducing this to £35.

PC Pro have looked into the pricing of BT's fibre-to-the-cabinet offerings and are wondering if the numbers add up. Extrapolating figures based on the cost to Iwade and estimating the amount of business premises across the country, they arrive at around £1.622 billion for a nationwide deployment of fibre-to-the-cabinet technology, far below BT and the Broadband Stakeholder Groups estimated £5.1 billion. They accept that the numbers are "dubious" and this is particularly so as they will have failed to include a contribution toward the cost of getting fibre to a nearby area as is the case with Iwade. The numbers are, however, interesting considering that Iwade would be considered as one of the 'final third' of the country which wouldn't expect to get connected without additional funding. There will at least be many more places like this which will be able to connect relatively cheaply.