Showing results for 
Search instead for 
Did you mean: 

Cost issues to cause problems to fibre?

Posts: 426
Thanks: 1
Registered: ‎03-08-2010

Cost issues to cause problems to fibre?

Was chatting to Adam earilier this afternoon, you know the usual 7 months of ADSL phone problems and the like, anyway, was talking about what I'd copied down the other day, I foget the source and I'm not upto trawling through the history to find it again, it is really saying that new Tax valuations are about to stunt the fibre growth.
You see our conversation steered from ADSL - Fibre, and I said what should have been done when the likes of Diamond Cable (later NTHell and now Virgin) were rolling their fibre out, BT should have done the same, straight away!
However, here's what I copied down.
Getting fibre to the home is a piece of cake, if you've got the gumption. The problems arrive when you want to use it.
Just ask cattle farmer and community Wi-Fi network volunteer Christine Conder, who put in her own fibre link to two properties for £2,500. Or Daniel Heery, CEO of Cybermoor, who managed to lay 9km of fibre for £20/m, compared to BT's standard "excess construction cost" of more than £120/m.
Their stories were some of the highlights of local MP Rory Stewart's conference to discuss how to get high-speed or next-generation broadband into Cumbria, one of Britain's most sparsely populated and poorest counties.
Fed up with dial-up access from BT, Conder and others in the community built a Wi-Fi network in 2004. This is still running but the speed on two of the Wi-Fi connections was failing due to tree growth.
Conder hired a digger and a mole plough, some over-specified fibre and the necessary customer premises equipment, roped in some engineers to light the fibre, and with 18 hours work over a couple of days, made a fibre link between the 2Mbps symmetrical wireless link at her farm to the two properties.
Conder says the fibre cost a pound a metre for the 1.2km link, the digger and driver £750, and the two in-house end boxes for around £250 each - total cost around £2,500, or £1,250 per house.
"And there's spare fibres in the cable, so we could extend it to another couple of properties, reducing the per-home cost even further," Conder says.
But she, Heery and other community network owners face a common problem: backhaul. This is the link from their equipment back into the national trunk networks.
Conder uses the Cleo (for Cumberland and Lancaster Education Online) network to transit her traffic via an Arqiva radio mast transit to a Telewest backhaul feed while Heery needs a 40km microwave link to get the internet into and out of his fibre network.
Conder is clearly frustrated by regulations. She can't go faster than her present 2Mbps, even though it's symmetrical (as fast upstream and down), and even though an upgrade would be highly affordable and desirable, given that 23 customers share her 2Mbps link. Another further 180 on a similar feed in the village as part of a research project, Living Lab. But the regulations prevent her from upgrading the service to maintain quality of service levels.
According to Conder, the original intention was that Cleo infrastructure could be shared with local network operators, but that was killed as soon as some local bureaucrats heard about the required restrictions if public money was used to build the network.
Heery's story is slightly different. Cybermoor is a privately-owned internet service provider that started with £1.2m in public money to run remote e-health projects and provide community networking. The original funding of approximately £1m provided PCs for 675 households; a wireless broadband network for homes and businesses; a community website; and helpdesk support. An extra £250,000 went on local schools and some adaptive equipment and training for disabled users.
In January 2009 a Commission for Rural Communities report said, "Despite its initial work and ongoing search for funding, and Daniel's ability to secure grants, Cybermoor has struggled to maintain market viability. As a consequence, they have developed a project to provide fibre connected broadband in conjunction with wireless provision. This mixed form of service provision will help improve connection speed and provide a service equal to most urban areas, in Alston Moor."
Last week communications minister Ed Vaizey switched on a 9km fibre link between Alston and Nenthead. But it's a relatively slow microwave that feeds the fibre.
Up to now Cybermoor's top speed was a pedestrian 512kbps. That's broadband, but not a service that average users would recognise. They are getting close to 5Mbps, even though they may be paying for more, says comparison website
But to access faster speeds, Alston's residents will have to build spur links to the fibre, as well as increase the speed on its microwave backhaul link.
It is unclear how the business rates issue will affect Cybermoor and other community network operators. The issue was barely raised at the weekend conference.
The latest list of rateable values from the Valuation Office Agency puts the rateable value of a 1km fibre link at £2,000. The VOA also proposes to charge non-BT network operators £20 a year for every home they connect to a broadband service.
At a tax rate of 40%, it appears Heery might have to recover at least £87.00/m from each customer just to cover tax due, let alone running costs and provision for upgrades and depreciation. That would make it too expensive for customers, except for businesses that could pass it on to their customers. Up in the fells, where average incomes are 94% of the national average, that's a tough option.
Eurim, the industry-parliamentary talking shop, once said business rates were the single biggest obstacle to investment in fibre networks. That was before the VOA's latest valuation scheme. Clearly someone isn't hearing.

Attached is the PDF file containing the new, and what I think, very unrealistic rates for fibre!  Roll_eyes
Rising Star
Posts: 382
Thanks: 21
Registered: ‎25-04-2008

Re: Cost issues to cause problems to fibre?

I'm sure BT would have loved to put in fibre at the same time that the cable companies were installing, but as far as I remember they had their hands tied by the government at that time  Cry