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.