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Scotland's Digital Future: A Strategy for Scotland

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5 Building Digital Connectivity Fit for the Future

Our ambition for Scotland's digital future is that next generation broadband will be available to all by 2020, with significant progress being made by 2015.

Achieving this ambition is not just for the Scottish Government. It will require co-ordinated action and support from partners across Scotland, including the public sector, industry, communities, individuals, MSPs, the UK Government and Ofcom.

Action: Working with our partners across Scotland, we will, during 2011, develop a strategic plan for the roll-out of next generation broadband across Scotland.

Our key aims for broadband in Scotland are related to, or aligned with, other major digital strategies such as:

  • the European Commission's Digital Agenda for Europe which has a target of broadband coverage at a speed of 30 Mbps (Megabits per second) to all by 2020
  • the UK Government's strategy "Britain's Superfast Broadband Future" which aims for the UK to have the best next generation broadband network in Europe by 2015

Current generation broadband

A 2007 report 31 published by the Scottish Government fully recognises the importance of broadband availability to economic growth, and significant progress has already been made in the provision of basic broadband services.

Our Broadband Reach Project has now provided basic broadband (defined as 512 kbps - kilobits per second) to over 99% of the Scottish population - a figure comparable with UK coverage levels. This is a major increase from only 43% availability in 2001, when Scotland lagged behind the UK level of 63%.

In terms of broadband speeds currently available, Ofcom's 2010 research on Broadband Speeds 32 reports that average UK speeds for consumers in urban areas were 5.8 Mbps, whilst the average speed in rural areas was lower at 2.7 Mbps.

Next generation broadband

There is no fixed definition of what speed constitutes next generation broadband, however, the European Commission's Digital Agenda sets 30 Mbps as a minimum target. The UK Government has not yet set a target speed, rather it aims to achieve the best next generation broadband network in Europe by taking into account four key indicators: speed, coverage, price and choice.

Our ambition is that next generation broadband will be available to all by 2020, with significant progress being made by 2015. This must take account of speed, coverage, price and choice.

Next generation broadband will be an enabler of much of the ambition and actions contained within this Strategy. It will help drive the digital economy; encourage greater public sector efficiency; improve access to public services; minimise geographic exclusion and provide an enhanced entertainment experience. It allows film, television, music, computer games and other applications to be downloaded in a relatively short period of time, or streamed directly from a remote source. It also allows the internet to be used on multiple devices simultaneously, such as PCs, laptops, smartphones and games consoles.

What the research said…

Scottish Government research (2011) on broadband and business amongst 1,000 SMEs and micro businesses in Scotland reveals that:

  • over a third (36%) report that they feel constrained, or significantly constrained, by the broadband speed currently available to them
  • almost two thirds (61%) believe that they will use broadband or broadband-enabled applications to a greater extent over the next five years
  • almost half (45%) believe that they will require faster bandwidths in the next five years

Roll-out of next generation broadband

Current and planned services from BT and Virgin Media will see access to speeds of 40 Mbps and upwards delivered to over 50% of the UK population by 2012 33, and 65% by 2015 34.

The level of coverage expected in Scotland is not yet fully understood, however, parts of the Central Belt are already benefiting from BT's "Superfast Broadband" service, with more Scottish locations to follow.

Virgin is currently rolling out its ultra-fast broadband product (100 Mbps) which aims to reach 50% of the UK population by 2012. Virgin is also trialling an even faster service (200 Mbps) in Kent.

CASE STUDY
Innerleithen Races to Infinity

The first rural part of Scotland expected to benefit from BT's Superfast broadband is the town of Innerleithen in the Scottish Borders. Innerleithen was one of six winners, and the only one in Scotland, of BT's "Race to Infinity" 35 campaign, which invited communities to vote for their exchange to be upgraded. Innerleithen now looks forward to broadband at a speed of 40 Mbps by early 2012.

Resident Brian McCrow, who headed the community's campaign in the BT "Race to Infinity" said:

'Access to superfast broadband is at the heart of plans to revitalise the area. With this, we can enhance our local businesses and make Innerleithen more attractive to new enterprises. Local students, who might have to move away or make a lengthy and costly commute, can use distance learning more effectively to complete their coursework. Being able to use online services will make a real difference to everyone's lives, whether it's older residents being able to access healthcare, people being able to use on-demand TV or keeping in touch with family and friends across the world through video conferencing'.

A number of technologies have the potential to deliver next generation broadband in Scotland. Fibre optic technology is likely to play a fundamental role, but alternatives such as wireless, satellite and mobile, are also able to offer next generation broadband. Indeed, alternatives to fibre are likely to be important when rolling-out next generation to the most rural locations.

The use of alternative technologies in closing this gap has already been demonstrated through the Broadband Reach Project 36, where broadband services to mainly rural areas are being delivered by satellite and wireless technology.

CASE STUDY
At a glance: Next Generation Broadband Technologies

FIBRE

Fibre broadband is delivered through thin glass pipes known as fibre optic cable, using waves of light. This technology is generally regarded as the successor to DSL broadband, which is delivered over the copper telephone network. DSL broadband speeds are limited to around 24 Mbps. Fibre to the cabinet ( FTTC) and Fibre to the home ( FTTH) are the two main methods of fibre broadband deployment in the UK. Current fibre services on the market offer speeds ranging from 40 Mbps to 100 Mbps, with faster services being trialled.

WIRELESS

Wireless broadband is delivered through radio waves. Developments in fixed wireless access are concentrated on WiMax (Worldwide Interoperability for Microwave Access) technology. WiMax technology is currently capable of speeds up to 75 Mbps, whilst the latest versions under development could offer even faster speeds.

MOBILE

Mobile broadband is delivered through the mobile phone network. Current mobile broadband services (3G) offer broadband speeds broadly comparable with current fixed-line services - around 7 or 8 Mbps. The fourth generation of mobile broadband technology, (4G), is currently being developed. It is also known as LTE (Long Term Evolution) and can provide bandwidth of up to 100 Mbps.

SATELLITE

Satellite broadband is delivered by a satellite in orbit around the earth which communicates with a computer via a satellite dish on the person's premises. The capability of current satellite broadband services is around 10 Mbps, however, the next generation could potentially deliver speeds of up to 50 Mbps.

Bandwith requirements of different applications

Source: Scottish Government (2011) Research on Broadband and Businesses in Scotland.

Developing a Scottish plan fit for the future

We recognise that we need to develop a robust plan for the roll-out of next generation broadband across Scotland. This plan will not just reflect the infrastructure investments needed now, but will set a longer-term vision for future broadband requirements.

Before we develop a plan, we need to understand the current extent of the fixed and mobile broadband network. We are discussing with industry where next generation broadband investments have already taken place. This information, together with recent UK Government research 37, on likely future 'not-spots', will help us to predict areas where the market might not deliver.

Action 5.1: We will work with industry to carry out more detailed analysis of the extent of the current and planned next generation broadband network across Scotland to identify priority areas for future intervention

We know that rural areas will suffer if left to the market alone. This is because the commercial case often doesn't stack up - up-front costs for rolling-out next generation broadband can be high with little or no commercial return on that investment.

The costs of deploying next generation broadband in rural areas will far exceed the costs in urban areas

We don't currently have a robust analysis that details how much it will cost to roll-out next generation broadband across Scotland. Some recent reports have estimated upwards of £200 million 38 in Scotland, compared to UK reports which estimate a UK figure of between £5.1 billion (for FTTC) and £28.8 billion (for FTTH), with the likely figure around £24.6 billion (depending on the technology used) 39.

Action 5.2: We will continue to build a deeper understanding of the costs of rolling-out next generation broadband across Scotland

We are clear that we expect the majority of next generation broadband deployment in Scotland to be market-led. There could a role for government in helping to raise demand for broadband services in areas that are not commercially viable to a level that will trigger industry investment. We are currently working with the industry to better understand how demand for broadband services (including public sector demand) could be aggregated to help prove the commercial case. This could involve consumer and business awareness campaigns, utilising existing public sector infrastructure, the aggregation of public sector services or a bottom-up approach, incorporating community models, or, indeed, a combination of all.

Action 5.3: We will work with industry to assess the potential for a range of different demand stimulation models and how they might achieve greater private sector investment in next generation broadband

Mobile technology

Improved mobile broadband coverage in Scotland is critical, particularly in light of recent research that indicates 29% of UK internet users use mobile to access the internet at home 40.

Ofcom's report on mobile broadband (November 2010) 41 also highlighted:

  • 60% of people use mobile as their main method of internet connection at home (compared to 41% in 2009)
  • Internet access via mobile is expected to outstrip fixed PC access within five years 42 according to a report by Morgan Stanley (2009)
  • the UK saw the highest growth in smartphone take-up, with a 70% rise in subscriber numbers between January 2009 and January 2010
  • the UK has the third highest take-up of smartphones in Europe (after Italy and Spain) with 18 subscribers for every 100 people

Ofcom's Communications Market Report for Scotland (August 2010) 43 describes 3G coverage in Scotland at 41% geographic coverage and 66% population coverage. This is well behind the UK average levels of 76% and 87% respectively. The corresponding coverage map in the same report indicates that, outwith the Central Belt and the Scottish cities, 3G coverage in Scotland is poor, with very little in rural areas. The Scottish Government wants to see significant improvements in rural 3G coverage.

We want to see significant improvements in rural 3G coverage across Scotland

Our forthcoming work aimed at stimulating greater demand for broadband (see action 5.3) will include exploration of barriers affecting the mobile broadband sector.

One potential barrier is how the forthcoming spectrum auction for the 800 Mhz and 2.6 GHz spectrum bands will be designed. Both bands are suitable for the deployment of the post-3G generation of mobile services (4G) which are capable of delivering bandwidths of 100 Mbps. As spectrum management is a reserved issue and falls under the responsibility of Ofcom, we will press for the design of these auctions to be conducive to widespread 4G roll-out throughout Scotland - especially rural Scotland.

Action 5.4: Over the course of 2011, we will work with industry and Ofcom to identify barriers to increased mobile coverage and assess how these may be overcome. We will make appropriate representation to the UK Government and Ofcom to ensure that forthcoming spectrum auctions maximise the potential impact on future mobile broadband coverage in rural Scotland

UK Government Broadband Strategy

"Britain's Superfast Broadband Future" sets out the UK Government's strategy to deliver the best next generation broadband network in Europe by 2015.

The UK Government has an important role in helping us meet our Digital Ambition for Scotland, and we will continue to work closely with them. Productive engagement between the Scottish and UK Governments continues, and Scottish Ministers recently met with UK Ministers (February 2011) to discuss how the UK Government's Strategy can have maximum impact in Scotland.

Crucially, £530 million has been allocated by UK Government to help deliver its Strategy (up to 2015, which could rise to £850 million by 2017 if needed). We are working with the UK Government to develop a strategic national broadband plan for Scotland that will benefit from a share of this funding.

We are working with the UK Government to develop a strategic national broadband plan for Scotland that will benefit from a share of UK Government funding

Scotland is already set to reap early benefits of this funding through the Highlands and Islands broadband pilot - part of the wider strategic plan we are developing - announced in October 2010. This project marks the first step in delivering next generation broadband throughout the Highlands and Islands. It will lever EU funding and industry investment, and aims to cover around 40 population centres throughout the region.

The project will consider providing improvements to the core broadband network which is currently a critical weakness of the region. This is exactly the type of backbone network infrastructure advocated by both the Royal Society of Edinburgh and Reform Scotland in their respective recent reports 44, 45.

Potential wider benefits of the Highlands and Islands project include the growth of key industries and businesses dependent on good digital connectivity. The project will build partnerships across the region and support opportunities for greater collaboration across the public sector which will, in turn, help deliver our Digital Scotland ambition. The project will be led by HIE and is expected to begin delivering connectivity improvements within 12-18 months.

We aim to secure the best possible share from the UK Government's £530 million funding package by developing an ambitious and strategic national broadband plan for Scotland. In recognition of the vital role that the enterprise agencies and local authorities have in the development and delivery of the broadband plan, we will work with these organisations to explore how this can most effectively be achieved. We are now working with partners in the South of Scotland to develop a local broadband plan for the South of Scotland region - this plan will seek to build a critical mass of demand for next generation broadband services. We believe that generating such demand is vital for the long-term sustainability of any regional rural broadband plan.

We are holding a Rural Broadband Summit in March to discuss how we can work with the enterprise agencies, local authorities and industry to develop and progress rural broadband plans for Scotland's regions.

We are holding a Rural Broadband Summit in March to discuss how we can work with the enterprise agencies, local authorities and industry to develop and progress rural broadband plans for Scotland's regions

Action 5.5: In order to secure the best possible share from the £530 million allocated at UK level for broadband delivery, we will work with Scottish Enterprise, Highlands and Islands Enterprise, local authorities and other partners to collectively develop a national infrastructure strategy for Scotland which will comprise regional broadband plans

Building on current public sector broadband infrastructure

We have already made significant investment in high-speed broadband across the public sector in Scotland with the Pathfinder, Interconnect and JANET networks. We are investing £90 million in Pathfinder alone. Public sector partners must now work together to maximise the potential impacts of these networks in delivering next generation broadband across the wider community, particularly in rural areas.

We are investing £90 million in Pathfinder alone

CASE STUDY
Pathfinder, JANET and Interconnect

Pathfinder: The Pathfinder network provides broadband connectivity to over 1,200 public sector sites (including schools, council offices and libraries) in seven Scottish Local Authority areas: Scottish Borders, Dumfries & Galloway, Highland, Moray, Argyll & Bute, Orkney and Shetland. The primary objective of Pathfinder is to deliver high quality, scaleable broadband to significantly improve connectivity for Scotland's most rural regions.

JANET: Initially a university network, JANET now provides high bandwidth connectivity to education, research and training institutions throughout the UK. In Scotland, this includes all of our colleges and universities.

Interconnect: Serving over one million users, Interconnect provides dedicated high bandwidth connectivity between all 32 Scottish local authorities, the Glow datacentres and other national bodies such as Learning and Teaching Scotland and the Scottish Qualifications Authority. The Interconnect and JANET networks integrate at five sites in Scotland: Glasgow, Edinburgh, Dundee, Aberdeen and Inverness.

An evaluation of Pathfinder is also being published alongside this strategy 46. The evaluation assessed the procurement approach, value for money and whether the public sector is optimising its use. The findings show that public sector sites now have significantly higher quality bandwidth, and that the aggregated procurement approach has resulted in a reliable service.

In terms of public sector delivery, there is a general consensus that Pathfinder has enabled the delivery of strategic initiatives. For example, in the case of education service delivery, the roll-out of Glow (discussed in more detail in Chapter 2) across school sites in rural areas has relied on the connection speeds provided through Pathfinder.

It was initially hoped that Pathfinder would also provide wider benefits to rural and business communities. This has not yet been achieved, however, this is due to procurement, contractual and state aid issues, and is not a failing of the Pathfinder networks themselves.

We are keen to explore how Pathfinder can play a part in fulfilling our digital ambitions. It is clear that wider community and business benefits must be given greater focus at the design stage of any future procurement. The Highlands and Islands broadband pilot will provide an opportunity to explore the potential use of the Pathfinder North network, as well as other utilities infrastructure, in helping to deliver next generation broadband in rural areas. We will also explore how the Pathfinder South network may be utilised for wider benefit.

Action 5.6: We will work with Pathfinder partners to design and implement a pilot project by March 2012 to explore how Pathfinder might be utilised to deliver next generation broadband to rural communities

We have also commissioned a review of the strategic management of investment in Scottish public sector ICT infrastructure (the McClelland Review). Reporting to the Public Procurement Reform Board in March 2011, the McClelland review provided a number of recommendations on how best to deliver improved value for money, and support multi-agency working and shared services. As a major public sector broadband infrastructure project, Pathfinder has been highly relevant to this work.

Action 5.7: We will work with public sector partners and industry to improve our understanding of the scope to maximise the benefits of existing public sector infrastructure. We will commence discussions by May 2011 and we will take full account of the recommendations from the McClelland Review, the work being carried out at UK level through the Public Service Network Strategy and we will learn lessons from good practice being carried out elsewhere e.g. the PSBA (Public Sector Broadband Aggregation) Network in Wales

Procurement and Financing Models

The RSE and Reform Scotland reports both outline possible procurement and financing models that could be utilised to deliver a next generation broadband network in Scotland. Further work is needed to understand the potential feasibility of these models and the role of various partners. We will further explore and assess the potential options for financing and delivering next generation broadband in Scotland.

Action 5.8: We will explore the feasibility and appropriateness of potential procurement and financing models, taking into account all of the work described in this section including cost analysis; UK Government and EU funding; existing infrastructure investments; possible public sector aggregation work; and potential for community models

We will focus on sourcing the best private sector investment, and on collaboration across the public sector, to obtain best value for money and wider community benefits

Sharing infrastructure

Significant cost savings could be achieved through sharing infrastructure with other utilities. We welcome the UK Government's commitment to further explore this issue as we believe it may be particularly beneficial in rural areas where the costs of rolling-out next generation broadband will be highest.

Scottish Water is already leading the UK in opening up the sewer network to build new communications capacity. This approach is cost-effective, has a lower environmental impact during installation, is less disruptive to the local area and needs no expensive road digs. Scottish Water is currently developing an accreditation process to approve providers who wish to use the sewer network for telecoms services.

Scottish Water has also given exclusive access to its mast sites to the Wireless Infrastructure Group, a leading commercial provider of site infrastructure to wireless operators. Its portfolio of over 1,000 active sites (150 in Scotland) makes it the second largest tower company in the UK.

We also recognise the potential synergies that exist with energy infrastructure, in particular, future opportunities for integrating broadband deployment with new grid infrastructure developments. Our "Low Carbon Economic Strategy" sets out the opportunities for Scotland. New low carbon energy generation and the development of smart grid architecture could offer opportunity for mutual benefit.

Significant cost savings could be achieved through sharing infrastructure with other utilities

Action 5.9: We will work with Scottish Water, its partners, and other utilities providers to understand opportunities for infrastructure sharing and how this might help drive roll-out of broadband in rural areas by September 2011

CASE STUDY
Underground digital highways

Spanning over 200 km, Geo's London Metro network is constructed in the roof of London's deep sewer system, over five metres underground. A key advantage of this is that the network does not have to share congested space just below the surface with other utilities such as electricity, gas, water and other telecoms carriers.

Many different industry organisations have seen the benefit of the sewer network, including leading banks, insurance companies, financial information providers, Internet service providers, mobile telephone networks, government departments, and a major hospital.

The most recent acquisition for Geo is a University which uses the sewer network to connect campuses in different parts of the city.

The Scottish Government welcomes Ofcom's recent regulatory obligation(October 2010) 47 imposed on BT to open up its ducts and poles to allow wholesale access by other providers. We look forward to seeing how BT will implement this ruling, as it could offer opportunities to other providers in deploying broadband in rural areas.

Planning

Legislation and regulation of electronic communications, including telecommunications, broadband and digital infrastructure, is reserved to the UK Government. However, the physical development of networks, particularly the siting and design of equipment, is a matter for the planning system in Scotland.

The Scottish Government's Planning Policy (2010) 48 states that:

"Planning authorities should support the expansion of the electronic communications network, including telecommunications, broadband and digital infrastructure, through the development plan and development management decisions, taking into account the economic and social implications of not having full coverage or capacity in an area."

The choice of connectivity beyond basic telephone equipment is, therefore, a matter for developers and communications providers. There is limited evidence that developers' plans include provision for delivery of next generation broadband. This must change and we support the recent move by UK Government and the British Standards Institution to provide best practice guidance and advice to developers about the need to install digital infrastructure into all new build domestic dwellings (Publicly Available Specification 2016) 49

This advice complements the ducting guidelines published by the Department for Communities and Local Government 50.

We want to see greater deployment of next generation broadband in development plans and support the UK Government's new guidance

Rating of the telecommunications network

In England, rateable values are set by the Valuation Office Agency; in Scotland rateable values are set by the Scottish Assessors. Decisions of both of these bodies are made independently of the respective Ministers. The UK Government's broadband strategy highlights the fact that at UK level, there have been calls to make changes to the business rates on telecommunications networks. The document goes on to state that business rating of telecommunications is a complex issue which is often misunderstood by the industry and commentators. The issue has also been extensively litigated in both UK and European courts. However, attempts by the industry to challenge the business rates regime on telecommunications networks have proven unsuccessful to date.

The power of the community

The success of Innerleithen winning BT's "Race to Infinity" campaign has already demonstrated the power of community support and commitment in delivering truly impressive results.

Recognising this, we want to encourage sustainable community-led initiatives, which could provide opportunities for testing alternative technologies and business models for improving local connectivity, and for increasing digital participation, particularly in rural areas.

The Scottish Government recently announced funding of approximately one million euros to support rural broadband projects 51 in a one-off funding stream in the LEADER52 programme, part of the Scotland Rural Development Programme 53. This new investment will support small-scale, community-driven projects to improve coverage and bring faster broadband to rural communities. Five LEADER Local Action Group areas - Forth Valley and Lomond, the Outer Hebrides, Orkney, South Lanarkshire and the Scottish Borders - will each take a share of funding under the LEADER Broadband Challenge Fund.

CASE STUDY
A local LEADER

The Forth Valley and Lomond Local Action Group will receive nearly £200,000 to pilot a powerful wireless connection for businesses and communities in areas where lack of broadband, unreliable broadband or slow connection speeds are severely hindering economic activity. This is the first such project of this scale in the UK. In future it could be extended to the entire Forth Valley and Lomond area and replicated in other parts of rural Scotland. An estimated 100 new jobs will be created as a result of the funding.

CASE STUDY
Following the community energy example

The Scottish Government's flagship scheme for promoting community ownership of renewable energy - Community and Renewable Energy Scheme ( CARES) is delivered by Community Energy Scotland, part of which includes free independent advice via a network of development officers, who are located across Scotland. The development officers have a wide range of experience and skills. Over the last 2 years CARES has allocated around 500 grants worth over £10.4M to support renewable projects.

One community group that has benefited from the support that CARES offers is the An Talla Group in Tiree. It was formed to establish a community hall and secured funding for the installation of a 6kW wind turbine to provide heating and lighting for the building.

The benefits to the community are a saving on their electricity bill, as well as providing a central hub for the community. The community has since secured support from the Big Lottery Fund to install a larger turbine and it is now financially benefitting by selling the generated electricity back to the grid.

Action 5.10: We will explore how we can further support rural communities to develop sustainable models for delivery of broadband infrastructure and services. We will look at areas where we have already made significant impact in communities e.g. renewables, and outline how we plan to take this forward by July 2011