BSG UK Report - Next Gen Fibre Broadband Could Cost £2

The Broadband Stakeholder Group (BSG), which advise the government on all things broadband, has predicted that it could cost between £5.1bn and £28.8bn (depending on the technology used) to bring next generation broadband services to the whole country. The findings are based on a study produced by Analysys Mason for the BSG:

"This is the most comprehensive analysis produced to date on the costs of deploying fibre in the UK", said Antony Walker Chief Executive of the BSG. "The scale of the costs looks daunting but the report does shed light on how some of these costs can be reduced and what the likely extent of commercial rollout will be. It should focus minds of commercial players, policy makers and regulators on the potential solutions to these challenges."

The report sets out the costs of various options and explains how those costs mount up as fibre is deployed. Naturally the "cheapest" (£5.1bn) option would be to use Fibre to the Cabinet (FTTC), which only cables so far as your local street cabinet and uses VDSL (similar to ADSL but designed for shorter distances) over existing copper wire to reach homes.

The report estimates that FTTC should be able to deliver broadband speeds of between 30 and 100Mbps (Megabits per second), though a recent Ofcom study (here) put the best peak rate closer to 60Mbps. The most costly method would be Fibre to the Home (FTTH), which takes a dedicated fibre cable all the way to your house and could offer speeds of 100Mbps to 1Gbps (1000Mbps) in the future.

In addition a third way is also proposed - FTTH/GPON, which is similar to the above except using a Gigabit Passive Optical Network (GPON) to "share" 2.5Gbps of download bandwidth between more than one customer. This method would typically cost £25.5bn, making it cheaper than dedicated FTTH links but not by much.

Clearly the cost of deploying such new technologies is extremely high and considerably above some earlier estimates of £10 to £15bn, though those are based on a mixed FTTC/FTTH approach.

Regular readers will know that BT has already signalled its approach to the situation by announcing a £1.5bn programme to roll out fibre-based, super-fast broadband to as many as 10 million homes by 2012 using a mix of FTTH and FTTC technologies (here). The operator will use FTTC to link most existing homes and businesses, while FTTH/FTTP will be used more for new builds.

Naturally BT can only fund so much of this development itself and the BSG has a number of suggestions for the rest, though all would require the private sector to work closely with public bodies and local communities. In particular, demand stimulation initiatives, such as pre-registration schemes, localised to the level of individual streets or cabinets could prove highly effective:

"The magnitude of the costs, and how the costs differ between urban and rural areas, will be important for operators, media players and public sector organisations looking to develop their future broadband strategies," said Matt Yardley, Partner at Analysys Mason, who directed the work.

It's good to see the country continuing to make significant progress on the next-generation broadband front, although we fear that many of the UK's remotest regions will continue to suffer and that the digital 'speed' divide can only widen. Pre-registration and other local schemes, such as those used in the earlier rollout of ADSL, will only get you so far.

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