How to turn £8 million into £120 million
The Government sanctioned adverts for superfast broadband appear to often have a negative reaction on social media, but then that is not uncommon for any topic, but due to a written question by Chi Onwurah MP for Newcastle upon Tyne Central we now know how much the TV adverts and other advertisements are costing; which is some £8 million.
"Based on DCMS insight and research the Government concluded that an advertising campaign would promote a greater take up of superfast broadband. For the areas to be covered by the Government's phase 1 Superfast Broadband Programme, we estimate that up to a further £120m will be generated for investment in further coverage for every 10 percentage point increase on the programme's 20% take-up baseline. The quicker people take up services in the areas delivered with public funding, the quicker funding is returned for reinvestment by the supplier; we therefore launched an £8 million national marketing campaign to raise awareness.
The budget for the campaign was based on evidence of previous government campaigns to reach the optimum amount of our target audience. The campaign was coordinated with suppliers and both BT and Virgin Media have linked their advertising to it."Answer by Mr Edward Vaizey MP, Secretary of State for Culture, Media and Sport
£8 million seems a lot of money, it could be used to build cabinets serving over 30,000 homes and businesses or FTTP for 8,000 buildings, but in the scale of the superfast broadband roll-out it is a small amount. Every week now around 40,000 premises gain the ability to order FTTC (generally 300-400 FTTP), so if the £8 million increases take-up it could quickly pay itself back.
The way that spending £5,000 (daytime) to £59,000 (peak viewing) on 30 seconds of TV advertising can help the project is that the various BDUK projects have a clawback mechanism whereby BT has to pay back some of the gap funding if take-up breaks through a certain level (usually 20%) for a particular cabinet. Most projects seem to be planning to re-invest this money into extending their footprint further.
While fibre based broadband tends to carry a price premium the number of vouchers, half price deals and cashback means that many people can upgrade to FTTC and still be paying the same or less than they would have paid for a 0.5 Mbps ADSL service in 2002 even after all the offer periods expire.
The Government led superfast broadband roll-out is not perfect, but it never had the goal of getting superfast to 100%, it is likely to eventually reach that goal, but in a series of controlled steps that are reducing the risk to the public purse. The DCMS has already said that superfast broadband coverage reaches around 80% of the UK, and since then we believe the coverage has grown to around 81%-82%. The widespread use of FTTC means there is a higher level of coverage of fibre based broadband if you remove the superfast speed filter, and we estimate that nationally fibre based broadband coverage is around 85% to 86%.
Of course the increasing coverage is no comfort to those without access at this time, but then any project delivering physical infrastructure that is not just a simple flick of a switch takes time to roll-out. We believe everyone would agree that a pure FTTP roll-out would be wonderful, but given the budget constraints from the public purse and timescales involved it was impossible.