Monday, March 07, 2011


Final Third Mathematics

The "Final Third" is a concept describing the one third of the UK population (maybe 80% of land area) that it is forecast won't receive Next Generation Access (NGA) to the internet through the "normal" commercial provision driven by market forces.

I do wonder if the Final Third actually exists, if projects like Ashby-de-la-Launde can solve a broadband notspot without any public subsidy, maybe it's code for the areas that BT and Virgin aren't going to provide with NGA without a subsidy. Let's park that for now.

To "fix" the Final Third NGA problem, and to address the more immediate "Commitment" to prove "2 Mbits/s" access "Universally", we have Broadband Delivery UK BDUK and it's war chest of £530m. This is where the maths comes in.

The Final Third is described in a bit more detail by DCMS as about 9m premises, 1m of which are likely to be too expensive to provide with superfast broadband. Superfast Broadband is defined by DCMS as "potential headline access speed of at least 20Mbps, with no upper limit". In addition to 8m premises within the scope for public assistance for NGA there are an additional 2m households that DCMS recognise do not have a "good level" (or in some case, any) broadband. In addressing the 2m it is preferred that they leap straight to NGA.

So, £530m divided by 8m = £66.25 per premise for NGA. Even £530m divided by 2m is only £265 per property. The BSG report on wireless / satellite access prepared by Analysys Mason showed capital costs of at least £200 per home for even the lowest bandwidth provision to the most favourable geotypes. From this it is clear that the £530m cannot fund the Final Third (or even 8m of them) with any form of connectivity, and it requires considerable private sector investment.

This is of course understood by Jeremy Hunt, who has said that 95% of the funding will come from sources other than Government. So the message is clear, BDUK are not going to pay for your broadband problem to be sorted out, any more than BT are. They don't have the money.

Given this situation, should we not be trying to get on with some private sector and/or third sector projects ? If 95% of funding has to come from these sources I would venture to suggest that at least 80% of NGA or notspot connections will be funded entirely from non-Government cash with the rest on some "matched funding" or "gap funding" basis.

This page is powered by Blogger. Isn't yours?