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Gigabit Jersey receives the funding to proceed
Monday 12 December 2011 18:13:04 by Andrew Ferguson

Residents of Jersey and businesses look to be proceeding very quickly to a full fibre to the premises network across the island, to replace the current copper networks. The cost of doing this was previously announced as £41.5 million, with half of the money likely to come from JT (Jersey Telecom), and the rest from the sole shareholder the State of Jersey.

The progress is in the form on a Ministerial Decision by the Treasurer of the States, to give JT a dividend reduction for three years and a £10m investment by the government. The bulk of the capital investment to build the new fibre network will be in the period 2012 to 2016, with 2012 accounting for some £10.4m, when the bulk of the network is likely to be built. Some funds are assigned for spending in the period 2017 to 2021 as well, to ensure the final completion of the network roll-out.

There are some conditions that come with the government investment, mainly that a business plan to allow monitoring of progress by 31st March 2012, ensuring access to the fibre network is available on a fair, equal and auditable basis. Valuations to confirm the states £19m investment is only being used for the Gigabit Project, and amongst the other conditions is the establishing of apprenticeships for under 24 year olds to support getting local people into work.

JT have advised that they have been in contact with the JCRA with regard to the PtP project and can confirm that the Executive Director of the JCRA, has been specific in stating that a decision to proceed with the programme does not require approval from the JCRA and from his perspective it is simply a different type of access network (fibre instead of copper) used to deliver telecom services (ableit ones that are of a higher quality and speed). Further, the set of regulatory obligations that currently apply to JT, in terms of ensuring that the other licensed operators are treated equivalently and on a fair and equal basis to JT's own retail operation, remain irrespective of the access network and there is a firm commitment from JT in the business case to ensure full compliance with all such obligations.

Jersey Competition Regulatory Authority (JCRA) view - extract from gov.je website

When compared to the situation in the UK it is a stark contrast, and provides a wake up call to the UK Government that if Jersey can do this, and some other parts of Europe move in a similar way then the UK will not stand to make the business gains that are trumpeted as a benefit for the limited FTTC projects in the UK. The biggest difference is the longer term view, a clear ten year investment plan has been set out, with a very simple goal of replacing the copper network with fibre across the island.

Of course Jersey has an easier job than the UK due to the difference in scale, but following on from just last week when just £100 million was trumpted as major investment being shared between ten cities, one does have to question whether either the Government and Opposition view Broadband as a key infrastructure project in the UK. The sums of money being invested in the UK are minimal when you consider that one estimate for full FTTP across the UK was a whopping £29 billion. The situation is such though that no-one private or public wants to invest that sort of sum in broadband in the UK, but rather than the patchy nature of the projects run by the various local authorities it is about time a national plan that had a clear timeline extending beyond 2015 was published and acted upon.

For a long time firms have campaigned for a change to the business rating on fibre networks, long term changes to this could help to encourage private investment in fibre networks. The way the rates are evaluated currently mean it appears to favour the largest fibre operator that is BT.

Comments

Posted by Bob_s2 over 5 years ago
Works out at about £4500 per person

Probably not to meaning full. Probably need to find out how many phone lines to get a beter figure
Posted by andrew (Favicon staff member) over 5 years ago
Population 97,000 so I think you messed up.

Works out at around £1,000 per property, which sounds realistic.
Posted by themanstan over 5 years ago
Not a problem when you have guaranteed ROI!
Posted by Superfast over 5 years ago
That seems like a very shrewd plan, and infinitely do-able for a tiny place like that. Although £1k per home still seems a little low by comparison to other places. Wonder why. Will be interesting to keep an eye on the first properly fully fibred network.
Posted by themanstan over 5 years ago
There were some storms a while back and afterwards they put in a lot of new ducting. So if you consider that already as pre-investment.
Plus a population density of 800/km2 helps a fair bit.
Posted by andrew (Favicon staff member) over 5 years ago
£1k ducting is already in place, and there will be copper recovery taking place I believe.

While not enough money to pay for the fibre roll-out, it goes towards it. Also ensures every one with a phone line is using the fibre, and thus while people may buy a cheap 4 Meg package, there is the ease of upselling to faster packages in time.
Posted by cyberdoyle over 5 years ago
Well done Jersey, the first GigabitIsland. Hats off to some wise folk. You could become our silicon valley for Europe, as nowhere else will be able to supply what you can do. A futureproof investment and you can laugh all the way to the bank when the ROI starts to roll in. Your whole island will benefit tremendously.
Posted by themanstan over 5 years ago
CD

You do realise that this only works because this is an absolute monopoly?
Hence guaranteed ROI.
Posted by andrew (Favicon staff member) over 5 years ago
Dividend holiday, i.e. what JT pays back to the state (sole shareholder) halved for three years.

The other £10m is being lent, on a 2.5% return. So the state will get it back in time.

While the fibre itself will be a monopoly, so long as services can be bought wholesale fairly then what is the problem? Could a place the size of Jersey, support two networks, and the cost of doing so would be more, since the copper network would need to be maintained, etc
Posted by themanstan over 5 years ago
You're looking at £50/pm for the upto 20 Mbps in Jersey, which all three providers (JT and the 2 ISPs which wholesale off JT) come in at approximately this price point.

This is a niche area where this can happen... the UK lacks this form of surety of investment return which would allow any of the ISPs to be sure of a reasonable return in an imaginable timeframe.
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