THE race is on for one of the county’s biggest business opportunities of recent years.
With more than £5m coming its way to stretch superfast broadband further, Herefordshire Council says it is ready to work with private sector telecommunications providers in the county to connect communities well off the “mainline”.
The funding is found through Fastershire, the joint broadband expansion project the county shares with Gloucestershire.
Fastershire is funded through the government and Herefordshire Council with BT investment. A project contract with BT pitches approximately 90% of premises in the county switched on to superfast broadband by the end of 2016.
A further £5.5m has now been allocated to the county to seek to so-called “ 10% solution”.
In this, the council recognises a need to work with alternatives to fibre. In Herefordshire, wireless is the more likely of those alternatives right now, and wireless doesn’t immediately attract funding.
Fastershire wants the majority of wireless elements utilising licensed frequencies and measures to mitigate against the overspill of subsidised wireless networks into areas that already have NGA risking double funding and market distortion .
Two new procurements to increase coverage in the Golden Valley and north west of the county – where speeds range from a 4.4Mbps average to a 3.7Mbps median - go out in January next year as open to any broadband provider able to meet a 2018 completion date.
There are opportunities for bursary funding for specific communities, businesses and individuals in the remaining areas.
Whitestone based Allpay is already active in some of the county’s broadband not spots having launched a pioneering wireless service in 2009 that linked up with the Diocese of Hereford to use church towers as transmitters.
Kingstone were the first community to benefit from the new service when equipment was installed in the church tower and a signal spread to homes in the village.
In 2012 allpay was awarded the Next Generation challenge award for Rural Leadership and Community Development.
Allpay MD Tony Killeen said: “It is great news to hear that funding is being made available to assist in providing the ‘final 10%’ solution and we look forward to working with Herefordshire Council and other partners in making this happen.”
In September 2012, the council’s Cabinet provided delegated approval to the Director for Economy, Communities and Corporate to award the Borders Broadband contract to BT.
This was achieved in December 2012 and the project, since rebranded as Fastershire, has been in delivery for close to a year.
To date over 4,000 premises in Herefordshire have received a fibre service as a result of the project.
By the end of 2015 85% of premises in the county should have Next Generation Access (NGA) broadband providing download speeds of over 30Mbps.
Additionally, every premise will have access to the government’s Universal Service Commitment of >2Mbps.
The £250m SEP, which will run from 2015, aims to achieve 95% fibre coverage nationally.
From this programme, Herefordshire and Gloucestershire have been offered an indicative allocation of £10.98m split roughly 50/50 between the counties.
While this is one of the largest allocations nationally, it is acknowledged that this may not enable the authorities to reach 95% coverage indicating the difficulty faced in reaching the final 10-15% in this area.
To leverage the full £11m - £5.5m for Herefordshire - which is not in the capital programme would cost approximately £350k a year to fund through borrowing.
The authorities are required to identify the same value in match funding.
During the course of the last year, Fastershire has been working to expand the external funding available to the project both to increase the potential extent of physical access and to encourage the exploitation of broad band by local businesses.
As a result of this work, additional funds found include:
European Regional Development Fund - £657k capital funding from Department of Communities and Local Government to provide broadband grants to businesses in Hereford city centre and on the Rotherwas Enterprise Zone.
Rural Community Broadband Fund - £620k capital funding from Broadband Delivery UK (BDUK) to fund a contract extension to reach three additional rural communities.
Beyond 2015, the Department for Environment, Food and Rural Affairs (DEFRA) has announced that the new European Agricultural Fund for Rural Development (EAFRD) programme 2013-20 can support NGA broadband projects in the final 5%.
Broadband infrastructure and support projects have been identified in the European Investment Fund strategies of both the Gloucestershire and Marches Local Enterprise Partnership’s (LEPs).
It is hoped that the cumulative value of these funds, as well as other sources of revenue funding, can reduce the burden on the authorities to match the SEP like for like with council cash.
The Fastershire team is involved in negotiating this flexibility with Whitehall.
Should these negotiations be successful, the requirement for cash match from Herefordshire Council may have reduced from around £5.5m to around £1.4m.
As a strategy, Fastershire 2014-18 is based on a five-stage process:
Stage two (to 2016) based on the current contract between fastershire and BT.
Stage three (to 2018) contract extension to BT as additional to the current fastershire contract (subject to negotiations).
Stage four (to 2018) will include specific procurements in consolidated areas of a critical mass within the final 10% areas. This can be open to any broadband provider as a new procurement.
Stage five (to 2018) will use alternative funding which in the first instance will be grant based funding to those areas which can demonstrate the need for faster broadband.
THE EUROPEAN VIEW
Strategically, the European Commission want to see universal access to >30Mbps NGA by 2020.
At its simplest, the EC, through its state aid guidelines determine that NGA can only be delivered by fibre optic and must provide a step change to what is already available.
To date, state aid constraints have inhibited subsidising alternative solutions such as wireless and mobile.
While the EC guidelines on NGA investment claim to be technology agnostic, the only real technology it provides the ability to subsidise is fibre.
There have been some changes in the treatment of wireless which enables it to be subsidised and the National Competency Centre has stated that wireless could be treated as NGA as long as it is a lead to fibre, has
the capability to provide over 30Mbps and delivers over double the speed at a premises level than can already be achieved.
However, the business case to invest in deeply rural areas with wireless is recognised as “barely profitable”.
Added to that, the requirement to reinvest profits into fibre upgrades which were not viable to start with and the clarifications appear not to have altered the environment.
In terms of mobile, all the same issues are inherent as wireless. Additionally, the 4G market is not yet considered to be mature, so public bodies are prevented from proving that a market failure exists despite being able to estimate in which areas the market will ultimately fail to deliver.
However, there may be changes ahead which make 4G eligible for investment and it may well become a credible option.