Broadband

Part of the debate – in the House of Commons at 1:38 pm on 1 May 2003.

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Photo of Stephen Timms Stephen Timms Minister of State (e-Commerce & Competitiveness) 1:38, 1 May 2003

I am glad to do so. Let me give my hon. Friend an example from Oakham, the county town of Rutland, where in March I visited Rutland Online, which employs 15 people. It started six years ago by hosting websites and providing e-commerce solutions for businesses in the area, but broadband has become an increasingly major part of what it is doing. There is no broadband service at all in Oakham today, but in the next few months three separate broadband services will be established. An operator called Independent Networks is taking orders and will use local loop unbundling to provide the first broadband service in the area. On 21 May, BT expects to upgrade its local exchange for ADSL, the registration trigger threshold having been reached. Later on, Rutland Online will establish a wireless broadband service with which it expects to be able to support 60 small and medium-sized enterprise users. I can tell my hon. Friend the Member for Stroud that the fact that by that time there will be two other broadband services in the area is not deterring Rutland Online from introducing the wireless service as well. There is therefore potential for wireless and other solutions to coexist.

The main obstacle to the provision of more affordable broadband in rural areas concerns the fact that the initial investment required to provide broadband by any technology other than satellite is expected to obtain a slower return in rural areas, where there are fewer people within a given distance and where the cost of backhaul is likely to be greater than in areas of high population density. The so-called backhaul issue—the cost of connecting a local exchange or a new wireless base station to the core network—is a major barrier to the extension of broadband to rural areas. Rutland Online, for example, told me that of the £90,000 cost of providing a service for two years backhaul will account for £50,000. However, there are ways forward, including alternative technologies which can do the job more cheaply and, in particular, realise the potential of plans for public sector broadband connectivity in the way in which I have described. In the west midlands, it is envisaged that the network that I described could be used to provide backhaul for wireless broadband services in rural areas. That is an important part of the solution for rural areas.

ADSL, of course, is not the only solution, although it will be available to a substantial proportion of the rural population in time. We have talked about satellite, and there are schemes to help small and medium-sized enterprises gain access to satellite broadband, including the remote area broadband inclusion trial or RABBIT initiative, and other satellite schemes such as those led by the south-east RDA and Yorkshire Forward. Over 1,000 small rural firms across the country have benefited from those schemes so far, with the provision of funding towards the cost of a satellite connection. My hon. Friend the Member for Stroud has drawn attention to the importance of wireless, and there are already pilot projects such as those in Alston and Hawkshead in Cumbria and Tendring in Essex which use wireless technology to get broadband to residents and SMEs. I am sure that we will hear of other examples in our debate. I hope that the imminent auction of 3.4 GHz wireless licences will help to spread wireless broadband a lot further.

I should like to draw attention to an imaginative development that has taken place since the launch of the Alston Cybermoor project in Cumbria 18 months ago. With public financial support to help get the project going, it addressed issues of economic regeneration, lifelong learning and access to electronic Government services. It has been successful, and has achieved over 300 local connections and five public access points, but now faces the problem of how to keep going. Local residents have taken the initiative by adopting a social enterprise model, and have registered as a co-operative that other residents can join and help to develop. They have mutualised the public sector investment, and other communities could benefit from looking carefully at that example.

My hon. Friend Brian White talked about what has been happening in Canada. On a recent visit there, I met someone who was concerned about the steady economic decline of his rural community and had set up a not-for-profit organisation to roll out a fixed wireless broadband network, providing affordable broadband access to homes and businesses in the region. That service is now serving a community of 100,000 residents. A social enterprise and co-operative model may well be the way forward for areas in the UK as well.