‘Flawed’ South Yorkshire Broadband Scheme To Close

A superfast broadband network project in South Yorkshire which has been accused of wasting £80 million of public money, will finally close.

The Digital Region project was launched back in 2010 with the aim to build a superfast broadband network for homes, schools and businesses in the South Yorkshire region. However after years of controversy, it has been confirmed it will finally close.

Network Closure

“Shareholders in South Yorkshire’s pioneering Digital Region project have agreed to halt their search for a private sector partner following increased uncertainty and risk around compatibility of future funding with EU state aid rules,” said the project in a statement.

“Barnsley, Doncaster, Rotherham and Sheffield councils – along with major shareholder, the Government’s Department for Business, Innovation and Skills (BIS) – have agreed that a managed close down of the network and migration of existing Digital Region Limited customers to alternative networks now offers the most cost-effective deal for the public,” it said.

It said that the estimated cost of continuing with the project would be an estimated £95.8 million, however it is reported that the project has so far cost £83.3m, most of which is taxpayers money. The European Union also contributed £27m towards the project.

It is also reported that the network only managed to attract 3,000 paying subscribers, a fraction of the 108,000 originally forecast.

Last month the government decided to abandon its role in the scheme. Business Minister Michael Fallon told a Legislation Committee on 15 July that the project was “deeply flawed”.

“DRL’s (Digital Region Ltd) purpose was to provide high-speed broadband in a disadvantaged area to support growth and job creation,” Fallon said. “However laudable the motive, the project was deeply flawed. A combination of delays in appointing a contractor to build and run the network, failing to adjust as necessary in a fast-moving business sector and insufficient – in fact, zero – income risk being allocated to the network operator made the business hopelessly uncompetitive. I could go into how Yorkshire Forward should have been more agile and responsive as business conditions changed radically in the south Yorkshire broadband market while the DRL network was being commissioned, but doing so would sadly serve no purpose now.”

Fallon also asked the Committee to consider paying out an additional £10 million to £45 million in “financial assistance” funds, in order to maintain the network and bring in a new operator.

Changing Market

With the government decision made, the four Yorkshire Councils could have still pressed ahead without the government, but they have now decided to pull the plug. South Yorkshire is understood to have been one of the few regions in the UK that decided not to participate in the government’s Broadband Delivery UK (BDUK) programme.

The project had an ambitious target to deploy 500 miles of fibre in South Yorkshire, mainly around the areas of Barnsley, Doncaster, Rotherham and Sheffield. Alarm was first raised about the project in early 2012, as it was building its own fibre network independently to that BT and Virgin Media.

“When the project was conceived, next generation broadband was not yet available in South Yorkshire, compounding the area’s existing economic disadvantages,” said the project. “However, there have been significant developments in the broadband market and it is no longer financially viable to keep the project up and running.”

It said existing Digital Region customers would be kept informed, and would be supported over the coming months to switch to alternative service providers.

Pigeon vs rural broadband

The project closure highlights the tricky balancing act that is required to adequately build, maintain and operate fibre networks in the UK, and to make the financial sums work.

Yet the problem of how best to fund the deployment of fibre into more rural areas remains. An experiment, back in 2010, highlighted the sad state of rural broadband in the UK, after a pigeon beat a computer in a file transfer challenge.

A computer connected to the Internet at a farmhouse in Beverley in Yorkshire attempted to upload a five minute video (300MB worth) to the Internet using its local broadband connection, before the pigeon made a 75 mile journey to its home in Lincolnshire carrying a memory card with the same video attached to its leg.

Rory the pigeon started its journey and the upload was initiated at the same time. The pigeon made the journey in just 80 minutes. The computer only managed to upload 24 percent of the video by the time Rory reached home.

Think you know everything about BT? Try our quiz!