Last Friday, I had a meeting with Rutland County Council (RCC), to learn more about their broadband programme.
Some time ago, they called for bids from broadband companies, and have now struck a deal with BT. Under the deal, broadband will be rolled out to all homes in the county — though only “to cabinet”. That is, to the green junction boxes we see on pavements. If the broadband signal gets from cabinet to home (or office) via the existing old-fashioned copper, some speed will be lost. Companies or householders who want an optical fibre cable from home/office to cabinet, for optimum performance, will be free to put one in at their own expense.
The project will be funded (roughly speaking) 80% by the Council, and about 20% by EU funding, delivered via the British government from Brussels. The Council element is expected to add between £9 and £15 a year to Council taxes.
Currently the project is delayed while Brussels and our government argue about the interpretation of EU State Aid rules. (Memo to Brussels: this is our money we’re talking about. You give us back a little of our own money; you tell us what we can do with it; and then you expect us to be grateful).
In the meeting, I wondered out loud whether universal provision on the rates (OK, it’s Council Tax now, but you know what I mean) is the right route to go. We know that there are large numbers of homes, especially pensioners’ homes, where they don’t have a computer and don’t use broadband. Yet those pensioners will still be hit with the hike in rates.
The Council argued that in the 21st Century, high-speed broadband was like roads — everyone needed them, so there should be universal provision by national/local government. I questioned whether high-speed broadband should be compared instead to cable television. You either subscribe to Sky, or you don’t (I don’t). You can get the plain vanilla service free (or at lower cost), but you can buy the enhanced service if you chose to do so.
The arguments for universal service include the needs of school children, who do much of their homework using broadband, plus the needs of home-workers. But presumably schools provide facilities for pupils, while employers should be able to subsidise broadband provision for home-workers.
RCC’s choice of universal service and BT as a partner excluded a number of smaller companies who wanted to be involved. Both Brussels and the UK government spend a long time talking about the importance of smaller companies (SMEs, in the jargon), yet this kind of deal with a giant of the industry largely excludes them. They may be able to pitch for the cabinet to home/office connection, but I’m not clear whether that provides a viable business model. The BT route also enshrines a particular technical solution, and therefore creates barriers to entry for the more innovative and efficient technologies that will surely come in the future.
In this context, I was amused to note that the Tory MEP who also attended the meeting insisted on the universal-service model and dismissed the free-market alternative out-of-hand. Odd to hear a Conservative rejecting a commercial solution and insisting on universal government provision funded by the tax-payer as the only way forward.