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Leased lines ineffective use of business broadband grants

Friday, November 21st 2014 by Phil Wilkinson-Jones

Government broadband grants can help get small businesses online but not by subsidising expensive leased lines, the CEO of a co-operative association has said.

Malcolm Corbett, head of the Independent Networks Co-operative Association (INCA), said programmes such as the government’s Connection Vouchers scheme were most effective when they encouraged partnerships between businesses.

Mr Corbett was speaking to Cable.co.uk ahead of his organisation’s Super Connected Cities seminar in Birmingham next month.

The event will focus on the challenges facing cities and how to attract the investment needed to transform digital infrastructure.

“One thing we’ve been working on is how to utilise those vouchers more effectively for small businesses to get in really high quality services, which isn’t just about a subsidised leased line,” he said.

“This actually came about because BDUK asked if INCA members would be interested in helping address some of the issues around business parks not being covered in the rural rollout.”

He said INCA teamed up with the Federation of Communication Services, which represents business-to-business communications providers.

“We started looking at how our members who build networks can work with their members who have customers who need better connectivity and how they can work together.”

The first project to get off the ground was Perseverance Works, a business park in Shoreditch, London, catering for about 90 small businesses.

Despite being near the area known as Tech City, the site suffered from slow broadband speeds.

“They put out a request for appraisals to the market which I think got about half a dozen responses including Fibre Options, an INCA member, who won the bid,” said Mr Corbett.

“They’re now putting in a fibre network for all of the 90 businesses in the business park so they will all get 100Mbps symmetric connection on an open access basis for around about £50 or £60.

“They were able to attract vouchers to pay for some of the connection costs in that project.

“We think that’s a really good use of vouchers because it means all of those businesses are going to get really high grade services – it’s like having a leased line without spending thousands of pounds a month on one.

“In that area of London if you want to have a leased line you are going to spend £2,000 a month on it, plus whatever it costs to install – something like £10,000.”

He said the project was a good example for small businesses to follow if they were looking for better connectivity.

“We want to encourage local authorities to think more about those kind of projects than simply using vouchers to subsidise leased lines,” he added.

“I think the vouchers can be more useful when they actually encourage a response from the private sector to put in much better quality networks in order to serve business needs at an affordable price.”

The Connection Voucher scheme offers businesses up to £3,000 towards the cost of installing superfast broadband.

“The big issue when generating project like this is that the voucher scheme is supposed to end in March 2015 but I think if government is looking at future public subsidies and it thinks again about vouchers, then using vouchers to encourage much better business connectivity seems to me to be a real serious win-win.

“It’s great for the businesses involved – great services, great prices and we start building a much more future-proof infrastructure.”

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