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TelecomPaper Breedband 2011 - B4RN Lindsey Annison

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TelecomPaper Breedband 2011 - B4RN Lindsey Annison

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  • 1. Rural Broadband Lindsey Annison @digitaldales www.b4rn.org .uk
  • 2. Rural LancashireB4RN Area: approx 2000 km²400km from LondonLimited mobile coverage4 exchanges, 0 PCPs
  • 3. Overview• Why? – State of existing broadband – Why the market will not solve problem• What – State of the art Broadband network – 100% coverage, nobody left out – Future proof, 30-50 year life• How – Technically – Financially• Where – The Final Third – deeply rural10/04/11 www.b4rn.org.uk 3
  • 4. Country Living• No mains gas – LPG/Oil – expensive tank, expensive fuel• No sewage – Expensive septic tank and needs emptying• Water – Bore hole/spring, filtration?• Transport – Little public transport – Mum/dad’s taxi• Broadband – At best basic, usually very poor, remainder non existent• But we like it out here so we grin and bear it!10/04/11 www.b4rn.org.uk 4
  • 5. Where we live10/04/11 www.b4rn.org.uk 5
  • 6. Why is our broadband bad?10/04/11 www.b4rn.org.uk 6
  • 7. Other Reasons are..The telcos do not want to play in rural areas. Government has set the bar too low with 2Mbps, or even 25Mbps.No-one is doing the sums of the VALUE to rural areas, and hence the whole country if all citizens, businesses and public sector have access to future-proofed FTTH and associated services and apps.10/04/11 www.b4rn.org.uk 7
  • 8. ROI on rural FTTHThe ROI is not all about telcos profits.It comes from every sector:• Citizens savings, better technology for health, wealth & learning• Public sector efficiencies & savings• Business gains, access to new markets, innovation, expansion, jobs• A slice of the pie for everyone, including the telcos. Its ... FiWi Pie. 8
  • 9. Super Fast Broadband (SFBB)• Uses fibre to cabinet, PCP (FTTC)• VDSL2 from there to your home over copper• Cannot use VDSL2 from exchange (interference)• Must be PCP (street cabinet) in route• No PCPs on many rural exchanges• Can only deliver SFBB(=>25Mbs to range of ~1.2Km from cabinet anyway)10/04/11 www.b4rn.org.uk 9
  • 10. FTTH• Fibre all the way• Hyperfast broadband• 100Mbs/1000Mbs/10000Mbs all possible• No distance limitations• Future-proofed• Long term savings10/04/11 www.b4rn.org.uk 1 0
  • 11. FTTC v FTTH• Why doesnt BT upgrade to FTTH?• FTTC much cheaper, uses the existing copper• FTTH means new infrastructure all the way• FTTH costs quoted at between £6K and £15K per property (related to dig distance)• With revenue of £300/pa would never recover the investment• Spend the same in urban areas, get at least 20 properties for the price of one in the rural• Get investment back in 18 months or so• They have to make a profit or shareholders would sack them10/04/11 www.b4rn.org.uk 1 1
  • 12. County SFBB Project• BT confirmed FTTC not suitable for our area• But FTTH too expensive given the level of subsidy available – £30M but 200,000 properties = £150/property – Equal to a subsidy of 2.5% using low end £6K estimate• Will use alternative technologies – WiFi speed variable depends on lots of things – BET (Broadband Enabling Technology) 2Mbs max – Satellite 8Mbs/512Kbs probably• Will give you USC of 2Mbs but not much more10/04/11 www.b4rn.org.uk 1 2
  • 13. So what do we do?• Can we do FTTH more cheaply than BT?• Could it be affordable to the community? – Capital cost of build – Monthly charge to use it• Can we build the network?• Can we operate it afterwards?• Would it be viable/sustainable?10/04/11 www.b4rn.org.uk 1 3
  • 14. DIY FTTH?• Traditional model digs up roads and puts duct under them, costs £20-£120 per metre• B4RN plans to lay much smaller duct in farmland on the other side of the wall• Need to get wayleaves from farmers – Community Benefit Society• Need to get sign up from community• Have to raise the capital needed10/04/11 www.b4rn.org.uk 1 4
  • 15. B4RN (Broadband 4 the Rural North)• Industrial and Provident Society Act 1965• Company number 31352R (R indicates an IPS)• Community Benefit Society – Similar to co-op but answerable to community rather than our shareholders, more like a charity in some ways• One member one vote, not related to number of shares member holds• Asset lock10/04/11 www.b4rn.org.uk 1 5
  • 16. The Plan -Phase 1 1322 Properties Core network 150Km of primary duct (16mm) Spurs 100Km of secondary duct (7mm) £1.6M to dig and install fibre £260K central costs Total = £1.86M (£1400/property)10/04/11 www.b4rn.org.uk 1 6
  • 17. Customer Charges• 1Gbs (1000Mbs) service• £150 connection, £30/monthly• Battery back up included (1 hour typically)• Dont need a BT phone line, save £14.60/month• £30/month is total cost• Existing landline number can be kept and ported over to B4RN10/04/11 www.b4rn.org.uk 1 7
  • 18. Comparison CostsSupplier Speed Calls data cap Contract Install monthly Phone line total/mthBT up to 20Mbs Weekends 40GB 18 mths £ - £18.00 £ 14.60 £ 32.60BT up to 20Mbs eve+wkend 10GB 18 mths £ - £14.00 £ 14.60 £ 28.60BT up to 20Mbs Anytime 10GB 18 mths £ - £16.00 £ 14.60 £ 30.60BT up to 20Mbs Anytime no cap 18 mths £ - £28.00 £ 14.60 £ 42.60BT up to 40Mbs Anytime no cap 18 mths £ - £28.00 £ 14.60 £ 42.60B4RN 1000Mbs n/a no cap 12 mths £150.00 £30.00 £ - £ 30.00B4RN 1000Mbs Anytime no cap 12 mths £169.00 £35.99 £ - £ 35.99Tooway (Satellite) 6Mbs/1Mbs n/a 4GB 24 mths £299.97 £24.99 £ 14.60 £ 39.59Tooway (Satellite) 10Mbs/2Mbs n/a 13GB 24 mths £299.97 £49.99 £ 14.60 £ 64.5910/04/11 www.b4rn.org.uk 1 8
  • 19. Operating Costs• Staffing £50K – Technical support – Admin – Finance• Company overheads £10K – RIPE, NOMINET, Insurance, office• Fibre to Manchester & IP transit£82K• Equipment maintenance £8K• Total Annual operating costs £150K10/04/11 www.b4rn.org.uk 1 9
  • 20. Free cash flow• Running costs = £150K• Income – 50% take up, 650 users = £195,000 – 70% take up, 925 users = £277,500 – 80% take up, 1050 users = £315,000 – 100% take up, 1322 users = £396,600• Free cash flow – 50% take up = £45,000 – 70% take up = £127,000 – 80% take up = £165,000 – 100% take up = £246,60010/04/11 www.b4rn.org.uk 2 0
  • 21. Funding the build• Total cost of network £1,860,000• Materials and third party costs £1,260,000• Labour element £600,000• Need to raise cash for materials• But ask community to accept shares for effort and labour – this is important AND popular!• Reduces number of cash paid shares to £1.26M10/04/11 www.b4rn.org.uk 2 1
  • 22. Shares for money• £100 - £20,000 max per person – FSA rule for IPS company• Enterprise Investment Scheme (EIS) – HMRC tax relief for investors – http://www.hmrc.gov.uk/eis – 30% of cost of shares – Between £500 and £20,000 – Carry back facility – Must be held for at least 3 years 10/04/11 www.b4rn.org.uk 2 2
  • 23. Foundation Shareholders• Invest £1500 in shares• EIS relief 30% £450• Nominate property – Gets connection fee waived £150 – Gets 12 months service free £360• So actual cost is £540• But you have £1500 of shares – Release value later when B4RN has free cash – Get 5% interest each year from year 410/04/11 www.b4rn.org.uk 2 3
  • 24. Funding share withdrawals• Free cash flow – 50% take up =£45,000 – 70% take up £127,000 – 80% take up £165,000 – 100% take up £246,600• Board will decide each year how to allocate – Extend/improve the network – Community support schemes – Funding share withdrawals10/04/11 www.b4rn.org.uk 2 4
  • 25. Expansion• Phases 2 through 7 complete rural rollout• Phase 1 ~1322 properties but also have to build the network core and external links• Phases 2-7 ~2000 properties each but use existing core• Cost per property lower ~£1K per property• Will need new share issue schemes for each phase £2M each time10/04/11 www.b4rn.org.uk 2 5
  • 26. Phase 210/04/11 www.b4rn.org.uk 2 6
  • 27. Phase 310/04/11 www.b4rn.org.uk 2 7
  • 28. Phase 410/04/11 www.b4rn.org.uk 2 8
  • 29. Phase 510/04/11 www.b4rn.org.uk 2 9
  • 30. Phase 610/04/11 www.b4rn.org.uk 3 0
  • 31. Phase 710/04/11 www.b4rn.org.uk 3 1
  • 32. Where are we today?August 2011 Started community engagementOctober 2011 Aggressive deadline for sign ups /expressions of interest7th October 2011– Committee meeting held to make a decisionTODAY We have Subscribers Investors(Including people from abroad!) 3 2
  • 33. And the decision for 3 3
  • 34. Lessons LearntOur approach has come from Nuenen, Utopia, Lafayette, and many others:The telcos and government dont have all the answers• Dont settle for second best!• Capex can always be reduced by local people and innovative approaches• Visiting other places finds solutions• Communities can JFDI 3 4
  • 35. What else are we doing in rural UK?CyberBarn – demand stimulation for FTTH. People need to understand how ICT works and be confident with it. Rural isolation means online learning centres can be distant and unfriendly. The first fibre connected barn on a farm, teaching ICT skills as well as training communities in fibre splicing. 3 5
  • 36. FiWi I coined this term back in 2004: Fibre → Wirelessbringing fibre as close to the market town or village as possible and then using wireless in the first mile.FiWi is still a great solution for some of the places we are trying to reach in remote places. But it should be interim and/or last resort - FTTH first. 3 6
  • 37. Self-funded modelsFTTH is the solution. Communities, businesses and consumers want it today and definitely tomorrow.BUT we need pilots so householders understand what is possible if you pay vs if a telco or government pays.B4RN is one, there are others too now. Wed like to hear of more in EU. 3 7
  • 38. And finally....• FTTH is the best home improvement you will ever do to your home to add value as well improve your life• We are ALL consumers, whatever our day jobs• Do it once and do it right• JFDI• Come on baby light my fibre! 3 8
  • 39. Questions welcome! Lindsey Annison www.fibrevolution.com l.annison@gmail.com @digitaldales www.b4rn.org.uk