There was much joy among rural broadband campaigners and ISPs alike when Fujitsu announced this week that it has plans to install fibre to the homes of 5 million rural dwellers and with speeds of 1Gbps being bandied about its no surprise there was dancing in the street. Neil Hawkins at Choose.net looks at the implications for rival BT.
Communications Minister Ed Vaizey said: “Creating this superfast broadband network will help improve the economic and social prospects of the homes and businesses where high-speed internet access remains just a dream.”
If all goes smoothly for the Japanese tech giant – BT obediently opens access to its poles and ducts for an insignificant fee whilst the government opens its wallet and hands over the not so insignificant sum of £500 million – then it hopes to have the first country lanes up and down the land whizzing around by 2012 with the full 5 million in place 3-5 years later.
Fujitsu will build the network but will then hand over retail operations to any ISP which wants to have a piece of the action saying it is planning a “truly open network”. Admirable stuff indeed but the closeness of Virgin Media to this project suggests the cable giant may take a rather large slice of this fibre pie.
Virgin Media’s CEO Neil Berkett has been quoted as saying he sees Virgin Media as an “anchor tenant” on the network, which must worry BT as they currently enjoy a lion’s share of the rural broadband market due to a lack of competition.
The opportunity to switch to a range of new superfast multi-platform digital packages will be incredibly alluring to anyone currently getting 2 or 3Mbps from BT and paying a separate subscription for multi-channel TV to Sky. Part of Virgin Media’s haste to get in on this project early must surely be to steal customers away from BT and Sky before those providers have a chance to offer new services using the very same fibre.
If, and at this stage it is still a monstrously large if, Fujitsu are successful in their bid for the Treasury’s £500 million then there’ll hardly be any government money left to help anyone else (i.e. BT) build a rural superfast network.
In this scenario, BT, without serious investment in its own network, would be forced to pay to use Fujitsu’s network, which ironically would be installed on BT’s holes and poles or see these customers as a lost cause. That’s assuming all 5 million people this network reaches are so fed up they want to leave BT.
Without a doubt though the impact of a network such as this would be massive and whilst speeds of 1Gbps have been bandied about as if that’s perfectly normal we await further crucial details on how the plans will work. Until Fujitsu indicates: where it will build the network, how much it will cost to build and of course crucially, how much it will cost to buy services it will all remain “just a dream.”
This is a guest post from Choose. The site covers rights issues, research and debate into home broadband and more broadly home media and mobile markets.
