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1 DIGITAL BRITAIN STAKEHOLDER EVENT – NOTE OF DISCUSSION FRIDAY

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					DIGITAL BRITAIN STAKEHOLDER EVENT – NOTE OF DISCUSSION
FRIDAY 6th NOVEMBER 2009 AT CONSUMER FOCUS SCOTLAND, ROYAL
EXCHANGE HOUSE, GLASGOW

Attendees

Fiona Ballantyne                           Communications Consumer Panel
Colin Borland                              Federation of Small Businesses
David Byers                                Scottish Enterprise (South)
Councillor Angus Campbell                  Comhairle nan Eilean Siar
Jane Cumming                               Scottish Council Development & Industry
Graham Dale                                Special Adviser to Minister for Digital Britain
Graeme Downie                              NESTA
David Fyffe                                Scottish Rural Property & Business Association
Stuart Glendinning                         Scotnet
Trisha McAuley                             Consumer Focus Scotland
Richard Nisbet                             Scottish Council for Voluntary Organisations
Alex Paterson                              Highlands & Islands Enterprise
Peter Peacock MSP                          MSP for Highlands and Islands
John Robertson MP                          MP for Glasgow North West
Anne-Marie Sandison                        Consumer Focus Scotland
Anthony Segal                              Private Secretary to Minister for Digital Britain
Alan Stewart                               Ofcom Scotland
The Right Hon. Stephen Timms MP            Minister for Digital Britain
Douglas White                              Consumer Focus Scotland

Welcome

Peter Peacock MSP opened the meeting and thanked everyone for attending. He gave
particular thanks to the Rt. Hon. Stephen Timms MP for coming to Scotland to hear the
views of key stakeholders, as part of his work to take forward the recommendations from the
Digital Britain report.

Peter gave a brief overview of some of the main issues in his own constituency:

   access to effective communications technology is an essential service for individuals and
   businesses;
   developments and improvements in telecommunications technology always reach the
   Highlands and Islands last;
   this is because the geography and landscape of the region means that the cost of putting
   technology in place is high, while the small population means that the customer base for
   using this technology is relatively low;
   the market is therefore unlikely to deliver an adequate communications infrastructure in
   the region and a public policy solution is required;
   Digital Britain is welcome as it recognises this principle and identifies funding
   mechanisms to support it.

The Rt. Hon. Stephen Timms MP.

The Rt. Hon. Stephen Timms MP thanked the attendees for coming to meet with him, and
indicated that he was keen to hear their views on the Scottish specific issues that need to be
taken into consideration in the implementation of Digital Britain. He noted that while Digital
Britain seeks to provide a comprehensive strategy for the challenges and opportunities of the
digital era, the focus of this meeting would be on the broadband sections of the report.

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Stephen explained some of the thinking behind the Digital Britain report:

   There is a commitment to provide a universal broadband service at 2Mbps across the
   UK by 2012. Funding is already in place for this through the underspend from digital
   switchover, no new legislation is required, and 89% of homes in the UK currently have
   the capability to access broadband at this speed.
   Further support will be provided to deliver Next Generation broadband to 90% of homes
   by 2017. This is a much greater reach than would be delivered by the market, and will
   particularly benefit rural areas – and therefore a significant number of Scottish
   consumers. This support will be funded through a 50p levy on fixed telephone lines,
   which will generate £1 billion by 2017. New legislation will be required to implement this
   tax, and this will be included in the Finance Bill which the UK Government (with Stephen
   as the Minister responsible) aims to bring before Parliament ahead of the 2010 general
   election.
   Next Generation broadband won’t reach everyone however – therefore the UK
   Government is keen to hear where the priorities are.
   Three broad points for consideration:
       o some people question why the universal service is set at 2Mbps, and have
           argued for 5Mbps instead. The UK Government has taken the view that 2Mbps
           allows most people to do what they want to do online, and can be delivered
           across the UK at a reasonable cost. A universal service at 5Mbps would need
           greater public investment and the Government feels these resources are better
           spent delivering Next Generation broadband, which will be faster and easier to
           upgrade in future. In addition, some consumers will get broadband services at
           much faster speeds than 2Mbps as part of the roll out of the universal service –
           as it some areas it will be more cost-effective to put in place Next Generation
           services than the copper wire technology that is generally used to deliver 2Mbps
           services.
       o consumers have different reactions to different types of new technology – e.g.
           satellite and wireless schemes – therefore how these are pitched is important;
       o mobiles are likely to play an important role in delivering broadband services in the
           longer-term – therefore UK Government will consult on establishing a coverage
           obligation so that 4G services are available in 99% of homes.
   The Network Design and Procurement Group is being set up to manage the roll out of
   broadband across the UK. It is looking at the tender specifications for this and is
   considering whether this will be done on a national or regional/local basis.

Discussion

Peter Peacock MSP chaired the discussion, during which all attendees had the opportunity
to express their views.

The following issues were discussed:

The nature of the problem in different parts Scotland

Attendees reported particular difficulties with broadband services in certain areas of the
country, and made some general comments about broadband provision across Scotland.

   In the Highlands and Islands:
       o around only 70% of the copper wire technology that is currently in place to deliver
           broadband can actually provide broadband at 2Mbps – therefore there is much
           work to be done if the universal service is to be delivered;
       o only 25% of the region’s population is covered by 3G mobile;


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      o   there are currently no Next Generation broadband services available in the
          region;
      o   the market for providing Next Generation services is likely to reach only 40% of
          the population – therefore the ‘Final Third’ will actually be the ‘Final Two-Thirds’
          in the Highlands and Islands.

   In the Western Isles
       o in recognition of the fact that the market was unlikely to deliver broadband in the
           islands the local Council, Health Board, and Highlands and Islands Enterprise
           developed the Connected Communities wireless network, which provides basic
           broadband to 90% of the population;
       o however, there are problems with expanding the bandwith of this service, the link
           to the mainland is already full, and there are issues with power outages, battery
           generators only supporting a service for a limited period of time, and tidal
           patterns affecting radio waves;
       o individuals and businesses need a faster and more reliable service, but this
           requires the link to the mainland to be upgraded and BT does not believe that it
           would receive sufficient return to warrant this investment. Therefore another
           solution is needed.

   In the Scottish Borders, Dumfries and Galloway and the Angus glens there are similar
   problems to the Highlands and Islands, due to the geography of these regions and the
   low population density.

   In Glasgow there is very low take-up of broadband services (less than 40%). Therefore
   there needs to be recognition that simply providing services is no guarantee that people
   will use them.

   General points:
      o in addition to issues around coverage, speed and reliability an issue in many
         parts of Scotland is that people only have access to one broadband or mobile
         provider – therefore there is a lack of choice for consumers;
      o there are 100 broadband exchanges in Scotland where people can only receive a
         500kbps service at present. Some of these are full to capacity, and therefore a
         number of homes can’t get broadband despite there being an exchange in their
         area.

The problems that poor connectivity can present for individuals and communities

   Digital communications are increasingly used to promote civic participation – e.g. online
   consultation exercises – therefore those who cannot access the technology required are
   missing out.
   Connectivity can play a critical role in supporting education and learning – particularly in
   rural areas where distance learning is important. However, the technology that learners
   use has to be sufficient to support these activities.
   Technology can play a vital role in promoting health messages, particularly to young
   people, and there are clearly negative implications if young people haven’t got access to
   this technology.
   Young people will be reluctant to stay in rural communities if they are not able to access
   the technology that they need/expect.
   Good quality, high speed broadband can play an important role in promoting
   sustainability, as people can communicate via video conferencing etc rather than having
   to travel to meetings. This is particularly the case in rural areas where the distances that
   people have to travel are far greater.

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Key issues of interest/concern for businesses

   Due to slower communications technology, businesses in some areas of Scotland are
   not competing on a level playing field with companies in other parts of the UK.
   Accessing fast, reliable communications is particularly difficult while using public
   transport – but people running a business would expect to be able to do work while
   travelling.
   Investment decisions are made the ‘wrong way round’ – demand evidence is looked for
   to justify infrastructure investment, but people don’t demand something from technology
   until they realise they need it – therefore supply is always behind where it needs to be.
   Tourism is the vital industry in many areas of Scotland, particularly the Highlands and
   Islands.      Businesses in this industry increasing rely on technology to promote
   themselves to potential customers – therefore if businesses in Scotland can’t access the
   requisite technology to enable them to do this then they will suffer.
   It is likely that small businesses will be keen to sign up to broadband initiatives to help
   achieve critical mass.

The strategy for delivering Digital Britain in Scotland

The group’s discussion on how Digital Britain will be delivered in Scotland highlighted a
number of important issues.

1. General policy considerations:

   Certain areas of Scotland – e.g. the Highlands and Islands – were the last areas to
   receive basic broadband services when these were rolled out. There is a need to
   identify at an early stage which areas are unlikely to be served by the market for Next
   Generation broadband, and put solutions in place as soon as possible – because if the
   same areas are left behind again then the impact is likely to be even more significant this
   time around.
   There is a recognition that the market alone is unlikely to deliver in many areas in
   Scotland – therefore innovative approaches, and public/private partnerships are
   required.
   Strategic decisions are needed about which type of technology should be invested in to
   serve different areas – e.g. copper/fibre/satellite/mobile/etc.
   The universal service will deliver broadband at 2Mbps to 98.5% of the UK population –
   people living in Scottish rural areas are likely to comprise a significant proportion of this
   final 1.5%.
   It must be possible to scale up the 2Mbps universal service in the future, otherwise it will
   become obsolete.
   Questions were raised about the 50p levy on fixed telephone lines, and it was asked
   whether mobile phone companies should not contribute to the cost of rolling out Next
   Generation broadband, given that they will be a major provider of much of these
   services.
   The Network Design and Procurement Group will be considering the specific issues in
   different parts of Scotland when considering how broadband roll out across the UK can
   be delivered.
   Ofcom will need additional powers to ensure that the 2Mbps universal service is
   delivered.




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2. The need for a Scottish strategy:

   It was agreed that a strategy is needed for the delivery of Digital Britain in Scotland.
   There is a case of public sector organisations in Scotland working together to create the
   ‘critical mass’ for a network in different areas.
   The UK and Scottish Governments need to work together to deliver a joined-up, national
   strategy for delivering broadband across Scotland.
   However, there is limited evidence of a joined-up approach at the moment:
        o concern that the UK and Scottish Governments will each wait for the other to take
             the lead on certain issues;
        o concern that Scotland might miss out on funding which is supposed to be
             delivering for people across the UK;
        o lack of clarity about how the universal service will link in/build on broadband
             initiatives that have already been implemented in Scotland.


Next Steps

The attendees discussed the following next steps:

       The Rt. Hon Stephen Timms MP indicated that he found the meeting very useful and
       that it would help to inform his thinking on the implementation of Digital Britain. He
       stated that he would be keen to hear further feedback and input from those taking
       part in the meeting.
       Participants agreed that they would be interested in taking part in an ongoing
       ‘broadband interest group’, to share information with Scottish Ministers, the UK
       Government, broadband providers etc. Consumer Focus Scotland offered to provide
       support for future meetings of the group.
       Consumer Focus Scotland and the Communications Consumer Panel are holding a
       meeting on 11 November on the implementation of Digital Britain in Scotland. A
       report on this meeting will be circulated.
       In 2010/11 Consumer Focus Scotland will be producing a policy paper on digital
       consumers in Scotland. CFS will seek input to this paper from attendees.
       A note of the meeting will be sent to the Rt. Hon. Stephen Timms MP, and Jim
       Mather MSP, Minister for Enterprise, Energy and Tourism.




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