Exclusive: Troubled South Yorkshire broadband scheme may be sold off
AN embattled £100m taxpayer-funded scheme to offer next- generation internet access to much of South Yorkshire could be sold off to the private sector when Yorkshire Forward is wound up next year.
Phil Coppard, chief executive of Barnsley Council and one of the driving forces behind the South Yorkshire Digital Region project, has told the Yorkshire Post it “may be no bad thing” if the 50 per cent shareholding in the scheme currently owned by the regional development agency is sold off to a private telecoms firm.
Yorkshire Forward’s huge portfolio of assets will be taken back by the Government when it winds up the regional development agencies next April, amid widespread fears the Treasury is pushing for a firesale to boost its coffers. But there are suggestions that the struggling Digital Region project may benefit from private sector input.
Mr Coppard said: “The thing that’s exercising us is what happens following the demise of Yorkshire Forward, and there are discussions ongoing about that.
“The default position is that the RDA assets go back to the Department for Business – so they inherit it. The discussion is, what happens then?
“If they bring a partner in then that might not be a bad thing. But it’s too early to say what might happen.”
Digital Region was set up in 2005 by Sheffield, Barnsley, Doncaster and Rotherham Councils and Yorkshire Forward with tens of millions of pounds in EU grants and taxpayer-funded loans, aiming to put the county at the forefront of the next internet revolution. Hundreds of miles of new fibre-optic cables have been laid beneath the streets of South Yorkshire over the past two years, capable of offering ‘superfast’ broadband speeds up to seven times faster than the current average.
Roll-out of the new fibre-optic cable network to 80 per cent of premises is due to be completed within months – but take-up of the new high-speed service by domestic residents has so far been limited. The expected profits have therefore not materialised, and plans for the service to reach 97 per cent of the county by the middle of next year have had to be scaled back indefinitely.
The key problem for Digital Region has been its failure to find a major national internet firm such as Sky or TalkTalk to sell its wholesale service to customers. So far, only several small, local firms have signed up to sell the service, most focused on business customers or multiple-occupancy buildings.
Potentially, the sale of half or all of Digital Region to a major internet firm could be the kick-start the project needs.
“The interest for local authorities is to secure next-generation broadband for South Yorkshire,” Mr Coppard said.
“We have never said Digital Region is the only way we can do that and if there was a partner that came along and was wanting to work with us we would certainly talk to them.”
A key problem for Digital Region’s service has been that it remains reliant upon BT’s existing telephone network in order to reach home and business users.
Project managers have become entwined in a series of damaging disputes with the telecoms giant over the prices they are charged to access the network, which they say are making their product unattractive to major internet retailers.
BT is now rolling out its own fibre optic internet network across parts of South Yorkshire, in direct competition to Digital Region.
BT has said it eventually aims to cover around two-thirds of the UK with fibre-optic broadband through its own roll-out –- but that the more remote parts of the country will require public subsidy to reach.
Last month the Government announced a tranche of public funding for rural superfast broadband. South Yorkshire will not receive any, however, because Digital Region has already received tens of millions of pounds of public funds. Mr Coppard said he “does not have a problem” with that decision.
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Sunday 19 May 2013
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Temperature: 11 C to 19 C
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