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Interview: Hugo Pickering, chief executive officer, Cotswolds Broadband

Tuesday, October 21st 2014 by Dean Reilly

Cotswolds Broadband are the only alternative network in the UK to secure both public funding via loans from district councils and and grants from BDUK.

We spoke to chief executive officer Hugo Pickering about the success of Cotswolds Broadband, the challenges of rural locations, making a difference in small communities and open access to the internet.

How have Cotswolds Broadband been able to get both city and county councils on board in the way that they have?

My view is tenacity. I’ve been at it for three years now, working on this. My history with the county council, the district council and rural broadband goes back to 2003. I was one of the original campaigners that went around and got names on a list.

When I got to 250, I went to BT and said: 'Hey, there you go: enable Shipton Under Wychwood, please,' then they went: 'Actually, we’re going to up it to 500,' so that’s when we started Oxfordshire Rural Broadband – wireless broadband and all the rest of it.

That was my intro to the whole thing. Obviously times change but the technology hasn’t, and when it has, it want it to be there for the whole area, not just the easy bits to reach. The technology should be there for everybody and the pricing structure should be the same for everybody.

There should be no downgrade in performance just because you’re further away from a centre. I firmly believe it’s for everybody, and it’s an infrastructure project.

What we’re doing is separating the infrastructure from the active elements of the network. We’re putting in the infrastructure and getting funding for that infrastructure, but the access element, even the wireless element of what we do, is funded separately as a commercial entity. There are two completely separate – financially separate – elements.

The active bits don’t even come under Cotswolds Broadband. We’ve actually got a separate company that’s dealing with that bit. This is the funded bit that government, local and central, are part funding, and we bring the other 50%.

Government investment is 25%, central government grants are 25%, the rest is private investment. It’s getting that mix right that’s going to make it work, rather than being reliant on BT going with FTTC until copper is used up or it’s reached the end of its usable life.

G.Fast vectoring, all the rest of it, well yeah: ADSL over 8km you can get a reasonable link. Go to VDSL, you’ve got 1.4km effective usage. Go to G.Fast, you’ve got 300m. It’s logic and the rules of physics. You cannot break those laws. So, keeping going with copper, you’ve only got a finite amount of bandwidth and capacity that you can get down those cables.

Optical connections are the only way to ensure you’ve got future proof networks. The thing I bang on about is that I don’t want to have to come back in ten years time and fix it all again. That’s my mantra – making sure that we get it right this time.

How are you finding the reaction to having this future-proofing approach? Because there’s an immediacy with that problem that they’re so fixated on the now that the future proofing is almost too far away to worry about?

Consumers are somewhat obsessed with the today. But when you describe the bandwidth requirements graph, if you show a graph of usage over the last ten years, trickle trickle trickle, suddenly an increase and then exponential increase. There is no let up in the increasing demand year on year. That goes for bandwidth requirements as much as data storage requirements.

The use of data over the next couple of years is predicted to go up a ridiculous amount. Data transfer, usage, emergence of technologies. Everything leads you to an increase. When you explain that to people, they get it. And yes, you have to explain that to every person, but it’s becoming easier and more apparent to people.

Yesterday I was in a room full of councillors asking why we need this, and why can't BT fix it – the future proofing of it. The fact is five to ten years from now, you are going to have to go back and replace that copper, that’s been paid for by public money: why are you going to support something that you’re going to have to dig up in five years time?

OK, it’s alright right now, but use some intelligence techniques, mix it with wireless so you’ve got coverage and people can migrate to fibre later on, but put an infrastructure in place that doesn’t need replacing.

Everyone talks about the life of copper being extended by new technology. Well just in the same way, with optical, fibre will go from one gigabit, to a thousand gigabits and then you move on from there. That’s the migration path for that technology. The guarantees from manufacturers at the moment for a piece of fibre are 30 years. So why are we not making the assumption that this is a 50 year thing?

If it’s guaranteed for 30, you can be pretty sure it’ll last for 50. So if you can future-proof for 50 years, and I’m not knocking anyone else’s offering, but why not do it? If I was BT, I’d probably want to do the same thing with my network, but that’s just the nature of running businesses.

You can’t go and build a completely new network or fibre up everything, it’s too expensive. There isn’t enough money on the table.

Which does raise a question about the Labour Digital organisation calling for gigabit broadband for all by 2020…

I tweeted about it…

It’s a lofty goal…

…but there’s no talk of anything behind it. It’s electioneering. That’s exactly what it’s all about. You can talk about it until you’re blue in the face. It’s very difficult these days for a politician to have an impact in certain areas. They know it’s an emotive subject, so therefore it’s a good one to start getting in early. Then it’ll be picked up by David Cameron and everyone else.

Then it’ll have the effect of flopping backwards and forwards, and they’ll be able to say they came up with it first. So I just see it as a piece of electioneering.

A good piece of electioneering?

I think the fact that they’ve got it in now, because they’ve got a good six months to start getting it into policy. Whether they follow through with it is anyone’s guess. I think it’d be very difficult for a Labour government to find £20 or £30bn to throw into it.

It’s a slice of HS2, isn’t it?

That, in my view, is such a waste of money.

In the wider rural broadband community, there’s a great deal of anger about this proposition of 1Gbps broadband for everybody when for them, a couple of meg on a regular basis would suit them just fine. The immediate effect amongst those feeling the bite as far as rural broadband is concerned seems to be 'We haven't got a meg connection yet – how dare you?'

I don’t know. I think if you’re in a digitally deprived, fast broadband deprived area and somebody said ubiquitous broadband was a possibility, you might see that as a bright side rather than anything else. If it’s going to be coming out of the HS2 budget, when they come back with the next increase in costs, that’s the point where they’ll have to make that decision.

If it goes to over £100bn, what’s the cost of shutting it? A billion? The economic benefits have not been proven. Go and do something sensible with that money. Put it into education and broadband.

We interviewed an urban economist and he drew upon similar investments around the world, and his general consensus was that a rail link in a country of our size on the route that’s been mapped was negligible at best. But he was able to cite many examples where there was a far more measurable economic benefit to improve broadband for businesses and individuals.

To that end, how are you finding interest in the surrounding areas to the access you’re offering people that may not have been there otherwise?

Hugely supportive. What I’ve done, before Christmas last year, is to write to every parish council and get them to either take it to their parish council meeting, or parish meeting if they’re a small parish like ours, and either come back to us immediately with a letter of support in principle, and I gave them all a template which loads just sent back signed at the bottom, but pretty much every one that wrote back – out of 55 parishes, 29 letters of support straight back to say: 'Definitely in principle we support what you’re doing, what you’re trying to do and if it were available we’d promote it to our parishioners,' so we keep in touch through websites, through surveys and all the rest of it.

Every parish that’s written back have been supportive.

But coming back to the question about support and receptiveness around here. When we did a series of roadshows a couple of years ago, everyone was really receptive to it. A few stood up and said: 'Surely, if it could be done, it would’ve been done?' but that was because BT were offering their solution and nothing else. You do have to take the blinkers off and explain it in a little bit more detail to people, but they get the idea of a futureproof service.

There's two things: if BT could have done it, they would have done it? Then there's can they keep their email address. It’s one of the biggest things that comes up. 'Can I keep my BT address?' So I gave them all sorts of guarantees like: 'I’ll set you up a Gmail account, for free, tomorrow.'

It’s a bit of a thread that keeps on appearing with us too. If I cancel X can I keep Y with regards to email.

People say: 'I’m moving my broadband' and suddenly they get in touch with a new email address – why? What’s wrong with Gmail? One of the things that has come up quite a lot with individuals, companies and all sorts, and something I’m quite keen to possibly promote, is the idea of service providers rather than internet service providers.

The net neutrality debate and everything leads onto all sorts of buying packages of services, so for instance I want to go and buy all my Google services, 9.99 USD a month, get Google Apps for Business, and maybe actually buy the internet service down someone else’s pipe, and do it that way. I do believe there’s going to be a move to doing it like that in the next five years.

I think it’ll happen quite quickly, and it’ll flop from one to the other.

Not overnight, but pretty quick. It’ll be an interesting time to see what happens, because once Google have rolled their fibre product and various other things to cities, it can get a bit Skynet-ish. Now I don’t decry any of that, but the great thing is they keep trying new products. It doesn’t matter about things like Google Talk, Buzz and all those sort of things.

I think Google Glass has a place. It’s for geeks and those who like to play around with technology, but it’s got a really usable function in potentially health care and all sorts of other things. But one thing they all will need is broadband.

In Cotswolds Broadband’s current incarnation, you’ve been clear that you’re a provider of access, not an internet service provider. In the past, you’ve alluded to the possibility of a variation of a community provider model. Is that still on the cards?

Firstly, under BDUK guidelines, we have to provide an open access network. So there have to be at least two ISPs – absolutely minimum. Now I don’t think that’s open access, I think that’s quite restrictive access. So in our model, the open access bit is meeting a means by which customers can engage with high speeds, over a common infrastructure. One of the things we’re doing is introducing an open access platform via Europa into the UK.

By the end of November, we’ll have the ability for everyone around here to pre-register on our portal, down to address level rather than postcode level, and find out what they can get. They can then pre-register for any services they want to buy. It’s not going to be for everybody, because there may even be a caveat that buying certain services may depend on your ability to pay.

I think that’s crucial, because if you have everybody opting for a true 8Mbps service, I think a lot of people would go for that. If you put in place a caveat that says unless you’re receiving benefits, you can’t access that particular project, I think that’s the right way to do it. But you might have people saying: 'If Mrs Miggins can get 8Mbps at £2.49 a month, I want 8Mbps at £2.49 a month!'

We might not be offering it to everybody unless they can demonstrate their inability to pay more for a service. However, in order to pay for a fibre infrastructure, you’ve got to have a level of wholesale commitment. I'm not saying it will be £2.49, but just using that as an example.

It’s one of those things we will need to work through and ensure people get the services they want and need, at a cost that reflects the difficulty in reaching them with those services. One of the ways of doing that is working with providers of low cost housing, like Cottsway Housing around here, who do pretty much all of the ex-Council houses around here. They’re keen to do a model on that, where we can offer them a preferential service in areas that we’re already operating, to then connect in others.

There’s ways of doing it to make it work for both the customers, the county council and district council but again, it’s about partnership. It has to work. That bit is the most difficult that we do, to ensure that there’s an offering there for everyone. Open access is the crucial bit. Making sure what we offer is open. I like the idea of it, but I think the practicality of it, to get a return on that investment – even for the council’s investment, never mind our own – it’s hard to do.

So the portal will deliver a number of ISPs, some of whom will be known to customers, some of whom won’t. There’s a sort of argument to say with Sky, TalkTalk, Virgin and Plusnet there alongside a couple of others that people don’t know, that customers won’t be interested. I don’t see that as a limiting factor.

I come at this from the standpoint of wanting to make a difference in the community that I live and work in. I choose to live here, not because I need to or I have to, but because I want to. Therefore, I want to make it better, not only for myself but we also have the highest density of micro and small businesses in the UK. So if that’s the case, you’ve got a lot of people working from home, or from a shed in the garden or wherever it might be, so that’s got to be made better for them.

Can I make a difference for them? Yes I probably can, and I’d very much like to. A lot of this came from looking Transition Towns movement. Transition Chipping Norton was all about sustainability of a small market town, and the only way to make that economically viable is to prepare for the future and help the villages around that market town, from which comes all the people who go to Chipping Norton to buy their goods.

If people can’t stay in those villages and you’ve got rural migration going on. You’ve got a lot of old people there who can’t get out of their homes, and actually stay in their homes rather than go to hospices or wherever they might end up – there’s quite a lot of those around here.

If you want to keep them in their homes, they’re going to need e-health, monitoring servies, all of which need decent broadband. It’s all an ecosystem that needs to work together. The socio-economic arguments are still valid in the wider project. How do we ensure there’s sustainability in community based radio and TV? How does that interface with the NHS and e-health? There’s all sorts of dynamics that make rural broadband really interesting.

It’s not only about value for money, but also about value added services that we can throw in there.

Do you think you’d have the same level of success, if you were based in a similar rural location that had parity with size, location, and so on?

Firstly, I think it’s difficult to do this sort of thing if you’re not living or working in the area you’re doing it in. I can’t really comment on doing it elsewhere, but I don’t know if I’d want to do a project in another patch. I don’t know if it would have been easier or more difficult to do it in someone else’s patch. For us to go in and say: 'Right, we’re going to dig up your roads, we’re going to give you fibre and years of heartache,' that’s really quite difficult.

So when I go around to parishes, I start with: 'Look, I live and work here. Like you, I’m frustrated with the situation, and I want to do something about it'. Things don’t get done unless somebody does them. I’m not saving the world, it’s just broadband, but somebody had to do it.

With regards to the wider question, yes it’s replicable elsewhere. The same model can be applied to other districts. We’ve had enquiries from other district councils to us, as much as we’ve gone to them, so that sort of gradual movement into other areas means that this is the proving ground.

The trouble is that the public funding is only available for a certain amount of time. When it goes away, it wont reappear. So we need to move on very quickly. It’s why I’m driving this project as hard as I can and investing 100% of my time to ensure it happens.

Does it frustrate you to see the problems that the Connected Cities voucher scheme faced?

I didn’t see it as a problem. I saw it as inevitable, because it wasn’t marketed very well. People had no idea it existed. If people know, it’s because someone told them. It wasn’t because someone called them, or sent them an email and said: 'Hey! You’re a small business located near a big city. You can’t get decent broadband and you’re not alone. You can get a grant that will help you up your game!'

If someone told these businesses they could get a whopping great grant that could help, so they could up their sales, their cloud computing, yeah. It’s just communication, and it hasn’t been handled very well, by all parties. No one in particular.

But in the same time, it’s completion with BT. It’s lease line protection. It’s income protection, there. When you do the mapping we’ve done and you look at middle of Witney, and you see a white blob and find it’s a business park, it becomes very obvious. That’s what I would do if I were running BT – either Openreach or retail. It’d be stupid not to flog your assets to death or protect your lease lines.

Interestingly, there’s a couple of areas in our patch and the business development officer in West Oxfordshire District Council called me up a couple of weeks ago and said: 'What would you think if the Super Connected Cities scheme was extended into an area that wasn’t contiguous with Oxford city, but is just outside and had a business park problem?' Well, it’s in our patch but I don’t see it as a problem because it’s all going to have to dovetail together at some point.

And it’s not going to be every business that picks up on it. It’s not going to be every business that has the right flavour of product for them. There’s still a range of solutions. And also that money is going to run out very soon, so if a business isn’t in a position to pick it up now, what’s going to happen to them in six months to a years time.

There’s always this obsession that THAT is the solution. It’s one of a range of solutions. In a world of connecting everybody, there is no magic bullet. We’re part of the solution. Making sure there’s no gap or overlap is quite difficult to do.

We’re trying to fit around BT’s areas. I’m not worried about the ways that BT behaves. Yes there’s going to be a bit of tension, but I think that’s never going to be a problem. It’s the nature of business. Two competing companies, two salesmen knocking on the same door, effectively. But people can choose if they want a BT provided service or something else. They have that choice of flavours, colours and prices.

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