Are The Government’s Satellite Broadband Plans Working?

Satellite has emerged as a key technology in the government’s bid to ensure that the entirety of the UK will be able to access broadband of at least 2Mbps by 2015, and potentially 10Mbps by 2020 if the proposed new universal service obligation comes into effect.

The 2Mbps requirement runs parallel with the government-funded rollout of superfast broadband, which is expected to boost coverage to 95 percent of the UK population by 2017, with ‘alternative’ technologies helping to fill in the gaps.

The ability of satellite to reach remote communities makes it much more economically viable than fibre deployment, but the government’s satellite plans have come under scrutiny in the past few months.

Satellite broadband providers say the existence of several programmes and a complicated application process is hampering adoption, while political opponents have also rounded on the government.

Multiple programmes

At present there are four main vehicles for the government assisted rollout of satellite broadband.

The first is administered by BT as a component of existing Broadband Delivery UK (BDUK) contracts where it is required to deliver a basic service of 2Mbps.

The second is a ‘supplementary’ scheme launched by the government last December, where eligible users are able to receive vouchers from individual BDUK projects for the installation of at least 2Mbps broadband – with most supplier being satellite broadband providers.

These subsidies are available in areas where BT agreed BDUK contracts “off framework” and therefore did not have the 2Mbps requirement imposed on them.

There are also two regional projects – one for Wales carried out through the Welsh Assembly and another by Connecting Devon and Somerset (CDS) – which has had its own unique set of BDUK-related dramas.

Supplementary scheme

As part of the national and supplementary schemes, up to 300,000 households can receive grants to cover the installation of satellite-based broadband that provides speeds of at least 2Mbps, with some suppliers offering superfast services of 30Mbps.

Up to £350 is paid to an approved supplier to cover the cost of a dish and labour, with residents paying a monthly fee as part of a minimum 12 month subscription.

Interested parties must provide their local BDUK project with an address, phone number to see if they are eligible for a code for subsidised satellite broadband that can be redeemed with a number of approved suppliers.

Low demand?

Around £60 million has been allocated for the supplementary scheme, but in January, but Shadow Digital Secretary Chi Onwurah suggested the vouchers were a stunt and revealed that just 24 people had benefited and just £8,000 handed out at the time.

“This is an inadequate stunt designed to fob off his Back Benchers and leaving millions digitally excluded for many Christmases to come,” she told parliament, and told TechWeekEurope that the scheme was designed to be deliberately difficult to apply for because the money allocated simply isn’t great enough to meet demand.

TechWeekEurope has learnt that as of 1 April 2016, the scheme has received 2,500 applications and £103,000 has been handed out.

Learn lessons from the Welsh

The Department for Culture, Media and Sport (DCMS) rejects any suggestion that the application process is too complicated. Much of the criticism from suppliers has been about the BT-administered programme.

“The Welsh scheme is going well – we are working on a huge number of orders – the process is very simple, customers get the quotes from us and then contact the Welsh Assembly to arrange the subsidy and then we arrange the installation,” Andrew Walwyn, CEO of Europasat told cable.co.uk.

“The take-up on the BDUK National Scheme has been much lower – BT is running this scheme and the customer ordering process is very complicated, plus the subsidy isn’t as generous.

“There are definitely lessons that can be learnt from the Welsh scheme.”

Confusing situation

Another supplier, Satellite Internet, is approved for all four schemes but only participates in the supplementary, Welsh and CDS projects. It is critical of the BT-led programme as it believes it is inefficient, and believes it is unfair that many consumers have no choice in which programme they are eligible for.

“The situation is indeed confusing,” David Hennell, Business Development Director told TechWeekEurope. “There are a number of different subsidy schemes, both central and regional, either already launched or in the process of being launched, which operate in different more or less complex ways and which offer differing levels of subsidy.

“It is indeed fair to say that, since broadband-starved UK residents have no choice as to which scheme they may fall under, there is effectively a ‘postcode lottery’ in place when it comes to what levels of subsidy may be available and also what services such can be used to source.”

Subtle differences

“Although fully approved as a supplier under BDUK’s Main Basic Broadband For All Scheme (as provisioned via BT), up until now we have declined to offer out any services under this scheme and continue to do so.”

Satellite Internet is a big fan of the supplementary scheme and claims it has boosted interest in – even if it neglected to provide any concrete information about leads.

“The key advantage of the Supplementary Scheme is that BDUK passes subsidy directly through to [retail service providers (RSPs)] already expert in bringing connectivity to more geographically challenging properties without involving any middle man,” added Hennell.

“This allows us to deliver broadband services to eligible premises at the most affordable level to the consumer and it is this affordability that is now attracting an increasing level of interest.”

Just doing our job

BT’s response is that it is simply doing the job asked of it by BDUK and that any criticism is with how the application process has been designed, not through any fault of its own.

“BT is providing a wholesale satellite broadband service to help the government fulfil its universal service commitments in certain parts of the country,” said BT. “The service was specifically designed to meet the requirements of BDUK whilst adhering to state aid rules, and it’s doing just that.

“BT has sourced, assessed and negotiated with a number of retail satellite providers to ensure choice and value for money for UK taxpayers, as well as fair terms and conditions for people wishing to take part.”

Future demand

Applications for the supplementary scheme are open until the end of 2017, but there are no plans to launch a major advertising campaign similar to the one promoting the business superfast broadband ‘super connected cities’ voucher scheme that suffered from low takeup before funds were eventually exhausted late last year.

DCMS is being much more targeted with its marketing this time round, because there is no point advertising to an entire town about the availability because most people would be ineligible for the subsidies. Instead, it is focusing on direct mail campaigns and making suppliers aware of the eligible postcodes.

But is satellite the right way to go to fill in the gaps? There are limitations of course, such as latency, upload speeds and data caps, but are the alternatives any better?

Is satellite the answer?

In recent months, a number of wireless broadband providers have been approved to the supplementary scheme. Juice Broadband in Dorset and Quickline in Lincolnshire are two such companies to be added.

Again, DCMS is adamant that this not because of any perceived technical deficiency in satellite, but rather that the supplementary scheme has to be technically neutral in order to comply with European state aid rules. BT is under no such obligation and can choose any technology it wants – hence why satellite is the only option in its scheme.

“Despite one or two noteworthy shortcomings, satellite broadband remains an effective solution for those beyond the geographical reach of existing fibre infrastructure,” said Dan Howdle, telecoms expert at cable.co.uk.

“I find it saddening, therefore, that the uptake on the BDUK National Scheme is lower than the Welsh scheme, thanks, it seems, to unnecessary complication in the process.

“Understanding satellite broadband, its advantages and its shortcomings, is complicated enough for those outside the tech world. If what [Europasat] says is correct, it is likely many will simply have given up.”

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