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Connecting Scotland our broadband future: Making it Happen

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Connecting Scotland our broadband future: Making it Happen

DIRECT INTERVENTION: it's happening!

Why we must act now

When we launched our broadband strategy in August 2001, Scotland's broadband market stood at an early stage of development. We acknowledged that the public sector would have a role to play in stimulating the supply of the technology but it was unclear how the broadband landscape of Scotland would develop.

However, we stated that where we identified the need for direct intervention to afford Scotland the fullest opportunity to benefit from broadband, we would take such an approach. Just over a year later, the picture is clearer.

Around 40% of the Scottish population have access to ADSL services, a figure significantly lower than the UK average.

A number of contributory factors are responsible for this; our distinct geographical make-up; a lack of awareness and subsequent demand for broadband itself; the not inconsiderable cost of upgrading telephone exchanges to provide the technology and the wider global context of a telecoms sector suffering heavily in recessionary conditions.

In the light of this, the need for intervention on a significant scale is not only justified, but necessary. The challenge then is to best direct the resources we have available to us towards the realisation of our vision of a Scotland with affordable and pervasive broadband access.

We are therefore developing plans that will, in the short term, see a significant number of exchanges ADSL 'enabled' across Scotland. These exchanges will be in areas where the real benefit will be felt through the availability of broadband but where, on current demand projections and given market circumstances, the business case will not be made for the necessary infrastructure investment in the near future, if at all.

To complement this work, we will ensure that those areas which will benefit from this investment have access to the best possible information about the benefits of Broadband. Where we need to, we will work closely with private sector partners to help numerous communities across Scotland fully realise the potential of the technology - in short, we will give them the ways and the means.

We'll be developing these proposals in the near future. This will be a significant market intervention and in keeping with the third element of our strategy, we remain in regular contact with the appropriate regulatory authorities to ensure its validity.

Scottish Programme under UK Broadband Fund

  • Programme worth over 8 million. 7
  • Demand stimulation through demo centres and website.
  • Supply stimulation through technology trials, including major wireless network to extend broadband coverage across the Western Isles.
  • Pilot to extend ATLAS to a rural area.
  • Wireless applications Centre for Excellence.

Since last year, we have been developing the Scottish programme under the UK Broadband Fund and are now implementing projects to stimulate demand and supply.

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DEMAND STIMULATION PROJECTS

1. Neutral Website

1.1 As we have seen, stimulating demand for broadband is a vital short-term priority. To raise awareness of the benefits of broadband and provide neutral advice and information on how to get it, we are supporting a website, www.scottish-enterprise.com/broadband, which went live in November. The main objective of the website is to provide information that raises awareness, educates and demystifies the subject of broadband using simple language and also to help the users who access it to have a better appreciation of what broadband can offer.

1.2 On the website, the use of case studies to highlight the business benefits of broadband and tools to simulate access and download speeds and identify local availability and suppliers will be prominent. The site will be strongly featured in the marketing, delivery and follow-up activity in the Local Demonstration Centres (described below) and will be a hub for promoting and capturing interest from the targeted users. Building knowledge of the users, their priorities, issues and challenges for continued research to improve the site and the other linked programme projects/activities will be a key feature of the value that the site can add.

2. Local Demonstration Centre Network

2.1 Across Scotland, the site will be linked to the work of a team of e-business advisers, working through the enterprise agencies, as well as to a network of broadband demonstration centres. Here we are leading the way in the UK. The network in the Highlands and Islands is already operational, with a central hub in Inverness and local distributed support in Lerwick, Kirkwall, Thurso, Golspie, Invergordon, Fort William and Lochgilphead. Indeed, a first series of local promotional roadshows has already run this Autumn, starting in Orkney and concluding in late November in Ullapool, and taking in locations across the region in between. These events focused on the business benefits of broadband, and the widespread availability of service through satellite. Considerable interest has been generated from local companies, and this is now being followed up in each location with more detailed tailored seminars.

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Broadband for Business Roadshow on the Isle of Skye

2.2 In the Scottish Enterprise area, the current plan is for seven Local Demonstration Centres with the potential for an eighth. The first two centres are in Irvine (SE Ayrshire) and Glenrothes (SE Fife) respectively and pilots have been running since November. A further two centres in Selkirk (SE Borders) and at the Small Business Gateway in SE Tayside will be operational by the end of January 2003, building on the pilot experiences and initial operational seminars in the first two centres. The final phase will deliver Huntly (SE Grampian), Glasgow (Services to Software) and Livingston Council Facility (West Lothian) early in 2003.

2.3 The workshops to be delivered in the centres will be completely integrated with the messages and positioning on the neutral Broadband Website. They will also enhance the work already in delivery by Scottish Enterprise's E-business teams - such as 1st Steps seminars, etc., as well as UK Online for Business and local enterprise companies' surgeries. In essence, the broadband workshops will promote interactive and functional hands-on demonstrations to help businesses to appreciate the broadband 'art of the possible' with actual business benefit examples.

2.4 As already mentioned, the programme will link into existing E-business advisers in the LECs who have excellent experience and relationships with local companies and are well placed to be a key resource in delivery of the broadband programme. It is also proposed to supplement the Local Demonstration Centre network through the addition of a mobile Broadband Learning Unit. This will deploy a satellite-enabled executive coach to deliver mobile broadband awareness and learning to the wider community using the programme and materials being developed for the fixed centres.

2.5 The message is not: you must get broadband. The enterprise agencies will continue to provide advice and support, largely through the UK online for Business network, on e-business more generally. However, broadband clearly improves the e-business adoption process, and can facilitate lower order processes such as e-mail through its 'always-on' fast download convenience. Quite simply, it makes the Internet experience better.

3. Corporate Demonstration Centres

3.1 The demonstration centre network will also be linked to limited corporate demonstration facilities, where host companies, and other corporates who have no commercial barriers to sharing venues, will showcase broadband applications in action and the benefits of broadband within the supply chain. The approach to these sessions will be contiguous with that of the Local Demonstration Centres, and will build strongly on existing and developing case studies.

SUPPLY STIMULATION PROJECTS

In addition to raising awareness and stimulating demand for broadband, we must do all we can to encourage further supply of service. This aim is being pursued through trials of alternative delivery mechanisms such as powerline technology and wireless. In each case, we are testing not just the technology to see if it works but the commercial model. The latter is crucial if we are to see future market deployment.

4. Fixed Wireless Trial in the Western Isles

4.1 The technology trials included within the Scottish programme are exciting and offer a range of challenges. The Western Isles fixed wireless project has the potential to extend broadband access to the public sector and businesses right across this remote region.

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4.2 The project is currently at procurement stage and the organisers have recently chosen a preferred bidder. It is planned to have the main network infrastructure in place by March 2003.

5. Powerline Carrier Trials in Crieff and Campbeltown

5.1 In June 2002, a pilot scheme to offer high-speed, always-on Internet access for rural communities in the north of Scotland was launched in Crieff. Along with a similar initiative in Campbeltown, these innovative projects are the first in Scotland to use electricity power networks to deliver broadband communications. In Crieff, SSE Telecom (the telecoms arm of Scottish & Southern Energy plc) is in partnership with Perth and Kinross Council with support from Scottish Enterprise Tayside, while in Campbeltown the company is partnering with Highlands and Islands Enterprise.

5.2 SSE Telecom's introduction of the broadband trials in Crieff is based on demonstrating that powerline carrier technology (PCT) can be used to deliver broadband services to real customers, and that a market can be developed for this service. PCT offers an opportunity to establish broadband communications using the most widespread, pre-existing infrastructure - the electricity network, delivering the service through house and office wiring to any standard power sockets. Basically, the technology differs from more 'conventional' broadband services in its use of existing electrical wires instead of telephone lines or cable.

5.3 The economics of extending cable or fibre telecommunications networks is widely acknowledged as a major hurdle to broadband expansion beyond urban areas. Electricity distribution networks, however, with virtually 100% coverage of the UK population, offer enormous untapped potential for provision of broadband to all areas, and with lower investment costs. With projected access speeds of up to 2 Meg, compared with 56kbs for an ordinary dial-up modem, there could be a great potential to open up a huge range of educational, business and entertainment opportunities via the Internet.

5.4 In technology terms, a PCT network has been built in Crieff to provide broadband Internet Service Provider (ISP) and direct connections. Broadband Internet is being delivered initially to 13 sub-stations via conventional Digital Subscriber Line (DSL) technology. From these sub-stations, powerline carrier technology is used for the 'last mile' to the SME or domestic user's premises. A PCT access box is fitted inside the customer's premises, connected to the incoming power supply by a 13-amp plug and to the network device or PC by a standard RJ45 connector. In other words, the Internet is being brought right to the customer through a normal power socket without the need to tie up an existing phone line or install a new one.

The trial is already confirming the business benefits of access to broadband, as one participant has put it:

"Broadband Internet access, made available at reasonable rates, helps rural businesses to compete on level terms with their urban counterparts."

Angus Armstrong ADAC (Engineering Services) Ltd, Crieff

5.5 However, the longer-term commercial future of powerline carrier technology is dependent on the stability of regulation. The European commission has mandated ETSI and CENELEC under mandate M313 to determine a limit for radio frequency emissions. In the UK, enforcement of such regulations lies in the hands of the Radiocommunications Agency (RA). Given that the technology produces radio emissions, the RA have to be sure that such emissions will not interfere unduly with existing radio users. A decision is expected on UK usage by early 2003.

6. Smaller Trials - Ayrshire

6.1 There are also two smaller technology trials based in Ayrshire - one building on the established success of the Ayrshire Electronic Community initiative to supply broadband to the voluntary sector via metro VPN, and the other testing the business case for wireless broadband services to the farming community. 8

7. Other Projects

7.1 The remaining projects are of national significance:

  • There will be a pilot rural extension of ATLAS in order to test whether a commercial case can be constructed for rural areas. For instance, a different design solution will be needed from the rest of ATLAS Phase II, with networked mini-nodes rather than single points at business parks, in order to increase the potential target market. Rather than dark fibre links, this project will utilise wireless technologies in the local loop to deliver services to businesses and communities enabling a sustainable business model to be developed.
  • The final project being supported by the Scottish Executive under the UK Broadband Fund is the Wireless Excellence Network. Most significantly, this will involve the facilitation of trials of new content and applications in the wireless sector, while providing a link to academic expertise. The aim is to educate, develop, enhance and demonstrate Scotland as an innovator in the wireless arena. By capitalising on existing relevant skills within Scotland, and encouraging the involvement of worldwide industry players, the Wireless Excellence Network will allow industries within Scotland to view and benefit from wireless capabilities as well as promoting Scotland externally as a leading forward-thinker and user in this area.
To recap, the Scottish Programme under the UK Broadband Fund addresses short- to medium-terms needs by by focusing on raising awareness and demand for services, by stimulating alternative technological means of supply, and by including the important missing link between demand and supply - content and applications. The Programme has 2 years' funding, ending in March 2004. The Executive will be supporting the programme to the value of 4.4 million, levering in an equivalent sum from other sources.

RELATED ACTIVITIES

8. Other Enterprise Agency and Related Projects

  • HIPP ICT programme in remoter parts of H&I.
  • HIE and Scottish Enterprise both active in implementing Broadband strategy above.
  • Both agencies piloting satellite and lobbying for ADSL upgrades.
  • Chance to pilot cheaper ADSL upgrades in H&I.
  • FWA community networks model in the Highlands & Islands.
  • Barriers to broadband content development being examined.

8.1 That is not all. Under the Highlands and Islands Transitional status, the Highlands and Islands Partnership Programme (HIPP) has been allocated 9 million for telecoms infrastructure enhancements in remoter areas and 4 million to stimulate the demand side. This latter has already been applied to set up the team of local e-business advisers referred to above. For the infrastructure side of the programme, commissioned research suggested that there was no magic solution to broadband coverage in the Highlands and Islands, and that therefore a range of measures should be considered. Hence funding will be utilised through individual projects which conform to the terms of an Action Plan drawn up by the HIPP ICT Steering Group, chaired by the Executive. The first proposal is the Northern Isles and Caithness Fibre Optic link. The development of the project will depend upon its commercial viability. 9

8.2 We recognise that the opportunity to make use of European funds to boost infrastructure provision needs to be directed carefully in order to ensure wider strategic fit. Hence we will continue to steer the development of proposals under the HIP Programme with this 'joined-up' overview in mind.

logo8.3 Highlands and Islands Enterprise is of course key to the success of broadband strategy implementation in the region. The agency has an impressive track record of success in stimulating telecoms investment in the area - a series of upgrades in the 1990s totalling 80 million public/private investment, and leading to the creation of over 3,000 contact centre jobs. Currently, not only is HIE actively engaged in the management of the H&I projects under the UK Broadband Fund, and in the development of the HIP Programme, but it is subsidising the delivery of two-way satellite broadband services to selected business users in the area.

8.4 BT's satellite trial commenced in November 2001 in the Highlands & Islands and in Northern Ireland. The service has subsequently been extended across the UK. Installation charges are high - 900 - and the monthly service is over twice the price of conventional ADSL. HIE is currently offering substantial grant assistance towards the set-up costs to selected businesses in its area. Over 100 businesses are currently taking advantage of this offer. Three Scottish Enterprise LECs have offered similar subsidies, but to more restricted numbers. 10

8.5 HIE continues to discuss fixed link provision of ADSL with BT, and, as mentioned earlier, the area is included in BT's 'ADSL Exchange Activate' commercial trial of 'mini D-SLAM' upgrades in rural areas.

Diagram

8.6 Although these initiatives will undoubtedly enlarge the reach of broadband in the Highlands and Islands, they are unlikely to provide a complete solution. Therefore, HIE is investigating a model for establishing community networks using a combination of satellite and wireless systems to provide cost-effective but sustainable broadband services to very small rural settlements. HIE plan to roll out this solution during 2003.

logo8.7 Scottish Enterprise is similarly engaged in transforming the environment for the provision and utilisation of broadband services. Besides ATLAS and projects under the UK Broadband Fund as outlined above, the agency is also considering the need for research to identify the barriers to broadband content and applications development throughout Scotland. Scottish Enterprise is also helping to ensure the business community is well placed to utilise broadband through its activities to promote mobile applications, e-learning, greater e-business adoption generally, and the software industry. These include:

  • MX, the association to support the Scottish mobile applications supply sector, was set up and launched by Scottish Enterprise in e-business week 2002. It acts as a trade association for businesses that specialise in the creation and delivery of services, applications and solutions through mobile appliances, acting as a voice for their interests and enhancing their knowledge of relevant markets and issues. To date it has recruited members from various sectors including healthcare, local government, retailing, distribution, manufacturing, agriculture, gaming and marketing.
  • E-Learning is a key area of Scottish Enterprise's e-business activities. It is taking forward an approach to e-learning based on policy development, supplier development, demand stimulation, and marketing and promotion. Activity in those four areas will have an effect on both the supply side (content, web, and service developers and managers) and consumer side (consumption and application) of the various parts of the eLearning Value Chain in Scotland.
  • Over the past year, Scottish Enterprise's network of 45 independent e-business advisers has run 450 projects to help improve their local SME communities' e-business development and performance. To widen its reach into the Scottish business community, the Glasgow and Edinburgh Chambers of Commerce in conjunction with the e-business advisers' network have been running e-business clubs for awareness-raising and networking events since early 2002.
  • The Winners at the Web competition, to provide recognition and reward for organisations that have demonstrated business success through the most imaginative use of Internet technologies, has been held annually since 1998. The success of the event, in terms of the publicity it receives for e-business generally and for the finalists, has been such that the DTI modelled its UK-wide e-commerce awards on Winners at the Web.
  • For the software industry, another of Scottish Enterprise's e-business priority sectors, a network of 12 Softnet centres has been established to provide incubation facilities for growing applications developers. A programme of national and local networking forums is also underway. Other forms of assistance, in collaboration with ScotlandIS, include sales and marketing, training and support for companies, and a 'Software Academy' to help companies find the right graduate employees.

This list provides a flavour of the activities that Scottish Enterprise undertakes at the local and national level assist both the business supply community and the businesses that will take advantage of the products and services they offer. For more information on these activities, please see http://www.scottish-enterprise.com/businessdev/e-comm .