Natural England

The Digital Divide (AP02/27)

FOR DECISION

approve a project to achieve equitable IT access (connectivity) for rural businesses and communities through influencing central and regional government (including the RDA's IT strategies)

Relevance to Strategy and Corporate Plan: ICT and broadband can help deliver economic and social objectives for rural communities, and will have some impact on the countryside environment. Rural areas can expect to be disadvantaged without connectivity.

Staff and financial implications: The policy work and study are allowed for within the existing Rural Proofing Business Plan; regional implementation to be covered by the proposed enhanced influencing role in the draft corporate plan

Main issues to concern the Board: Are we right to be concerned about the risks for some rural businesses and communities, given current market conditions and government policies for ICT and broadband? What value can the Agency add to work already under way in government departments, RDAs and elsewhere? Is the proposed focus on good rural practice for the broadband study broadly right?

Purpose

1. This paper proposes an updated policy stance for the Agency on rural access to IT, including broadband, and to agree what actions we should undertake.

Background

2. By January 2002 44% of the rural population had access to the internet - the same proportion as in urban areas and a significant increase on 29% just eighteen months earlier. The business figure (no rural-urban split) for internet access in January 2001 was 63%. In addition to business applications, the internet is increasingly being seen as a means to deliver services and information to communities. It may even be that access to IT can bring greater benefits in rural areas than elsewhere because the physical distance overcome is greater. 

3. However, research for the Government (Office of the e-Envoy and DTI) shows that, left to the market place, much of rural England cannot expect to gain affordable access to the next generation of IT - "broadband" ie. a fast, high-capacity, always - on IT connection. Latest projections show that 13% of UK households and 14% of UK businesses should have no access by 2006 and these are almost all in rural locations. As well as the traditional digital divide between income groups, another divide could open up with roughly half of those in rural areas missing out.

4. Many IT uses do not require a broadband connection. Equally, as with our approach to transport, the Agency needs to retain a focus on IT as a means to an end and to seek "connectivity". We should not pursue broadband for its own sake. However, it is widely believed that gaps in affordable broadband coverage will put some rural economies and communities at a disadvantage.

5. Applications of broadband could include:

• procurement and banking online, some of which requires access to inter-active sites 
• large mail-outs 
• remote diagnosis to patients in GP surgeries at some distance from the nearest general hospital   

• using video conferencing between a group of small village schools to provide training and more specialist subjects, that none of them could provide individually
• purchase of what young people would increasingly see as basics - music, films and games through digital downloading   

6. A number of technologies can provide broadband, as set out in Annex A, and these are evolving rapidly. They are ADSL (a high capacity telephone line), cable, satellite and wireless. Outside urban areas, ADSL is only likely to be available in some more accessible rural areas and market towns. Cable is even more urban-focused. Satellite could quite easily cover the whole of rural England, but at present it is costly (relative to ADSL) and there are some technical weaknesses. Policy makers refer to "affordable broadband", which excludes satellite. Finally, wireless-based solutions offer potential for coverage in rural areas, but the technologies are still very much at the development phase. 

Progress to date

7. Government policy acknowledges the rural problem and has developed some policies which seek to address it. They include:

• a £30 million regional development agency broadband fund for pilot projects in areas of "low demand". Those announced include trials of satellite and wireless technologies, providing SMEs with broadband connections at reduced or no cost and linking up schools, health centres and libraries. (It should be noted that RDAs are also using other resources to fund IT initiatives);
• attempts to aggregate public sector demand, so procurement by various organisations in a sector or location is co-ordinated to achieve better value for money and to generate sufficient (collective) demand that there is a viable market for broadband suppliers. This is viewed by Government as a key part of its interventions and the Welsh Assembly has an ambition to link the whole of rural Wales in that way; 
• the creation of a 'virtual' Regional Broadband Unit (RBU to bring together the efforts of the DTI, the Office of the e-Envoy (OeE) and the Office of Government Commerce (OGC). On the supply side, the focus of the RBU will be very much on rural areas; 
• at the regional level, the RBU is now recruiting a network of regional broadband advisers, who will be based in the RDAs and whose role will be to capture and disseminate best practice, ensuring regional expenditure has maximum impact. They will be given a tool-kit of guidance on best practice, funding and technologies;
• The 2002 Spending Review White Paper contained various references to resources for ICT, though these were thin on the detail. The current rural service standard is for a fifth of schools to have broadband by this year, but we hope the Spending Review will enable the Department for Education & Skills to provide broadband to all schools and the Department of Health to link all GP surgeries with hospitals. Details will only become clear when departmental delivery plans are drafted in October. Links to schools, in particular, would provide potentially important broadband points in many rural settlements.   

8. The Government initiatives do not yet amount to a complete strategy for providing affordable broadband in rural areas. Research shows that these and the 2002 Spending Review proposals are expected to result in only a further 4% of largely rural households gaining access than would have been the case without any intervention. This would still leave another 13% of households without access. Government is reluctant to commit more resources, because of: the cost (estimates for funding universal ADSL range upwards from £600m); a wish not to distort market competition; the rather disappointing take-up of broadband in areas where it exists; and the rather weak (circumstantial) evidence about the benefits. Equally, the supply industry is in economically poor shape, with huge debts, and reluctant to invest in infrastructure in low demand areas. In this context, there are no easy solutions. 

9. The UK is not alone in recognising both the potential and the difficulties IT presents in rural areas. Through the OECD we helped to fund a study of ICT in rural areas, which included case studies for other countries. Annex B contains some background information about public sector approaches in other countries. There are some common issues with the UK experience, though some countries have been more interventionist.

Proposals

10. The Countryside Agency needs to be clear about its role and how it can add value. We are not a provider of infrastructure. Nor do we have the technical expertise to provide IT advice or add much to the detailed work of the RBU and others. We should avoid duplicating work in hand elsewhere.

11. Our existing work includes: regular liaison at the national level with the RBU, DEFRA and a Broadband Stakeholders Group; some Regional Offices liaising with regional development agencies about their IT Strategies; assessing demand for broadband through our market towns healthchecks; various Vital Villages grants for IT-based community projects; and developing IT indicators for our State of the Countryside reporting. Annex C summarises the Agency's current involvement in projects with a significant IT or broadband component.

12. The Agency needs to have an agreed and up-to-date policy line on connectivity. We should say what we believe rural areas need, but not try to propose the right technical fix. In summary, we propose that the Agency adopt the following policy approach:

• rural firms and communities should not be placed at a disadvantage in terms of connectivity. All rural businesses will need to be able to access it (including some people working from home), some rural services will and rural communities should have a nearby public point of access (e.g.. in a post office, library, village hall or school); rural households should not be excluded from the benefits of downloading films, music and other digital products
• we recognise that this will not be easy to achieve. In practice, we expect a sequential approach, with different levels and types of access in different rural areas (at least for a few years). Current technologies for affordable access to broadband should quickly reach the more accessible rural areas and market towns; 
  • we want a clearer strategy from the Government (and its partners) that shows how it intends to work towards meeting the needs of all rural businesses and communities;
  • in particular, Government needs to press ahead rapidly with its work to co-ordinate and aggregate demand across the public sector, to remove constraints on this happening, where they exist, and to ensure this brings infrastructure into areas that are missing out.   

13. We also propose that the Agency should take the following new actions:

• prepare a "manifesto for rural areas" for publication this Autumn, building on the policy line set out above. The 'manifesto' would not attempt to set out a deep evidence base, but would present the challenge for Government and other players. We would keep this at a strategic level and distinguish from recent campaigns launched by the CLA and Countryside Alliance by focusing on the Government as an audience for a strategic message, rather than badgeing BT and getting people to sign up to a campaign. 
• seek to influence all eight RDA IT strategies by next financial year. Our current input is patchy, but it seems clear RDAs are increasingly seen as key players in delivering the Government's agenda for demand aggregation and faster rural roll out of broadband; 
• commission a study on rural best practice. Discussions with the RBU show there is an information gap which we could very usefully fill and which fits our remit. This would be to assess some existing rural pilots and identify the "success factors" that could be applied elsewhere. This would not just be technical, but about the partners, the funding, and how demand was assessed and met. In particular, telecoms operators have yet to develop a generic business case for fixed wireless access, so it would be useful to draw out the lessons from some that exist.   

Financial and manpower consequences

14. The manifesto and study fit the existing Rural Proofing Business Plan and do not require additional resources. There will be manpower consequences in the regions, if we are to engage with all eight RDA IT strategies. While regions are generally involved with IT projects, only three input directly to RDA IT strategies. The time required for the other five to do so is estimated to total 0.3 of an S or H grade (i.e.. 0.3 FTEs spread across five offices). We envisage this being part of the proposed enhanced regional influencing role which is under discussion as part of the corporate planning process.

Next steps

15. The regional influencing would be taken forward through the development of next year's Business Plans. The Rural Proofing Studies Unit will co-ordinate the drafting of the manifesto document, with the aim of publishing it in October, and will draw up a brief for the proposed study, drawing on expertise in the RBU.

Risks and mitigation measures

16. The main risk would arise from in-action and the Agency not being seen to have a clear position. However, there is also a risk that we will get drawn into technical issues that are beyond our competency to judge, especially in the proposed study, where a technical element is necessary. We would address this by using specialist, external contractors and involving the RBU (with its expertise) in an advisory group for that work. 

ANNEX A

BROADBAND TECHNOLOGIES

Fixed line

The most common way of receiving broadband is through an ADSL (high capacity) fixed telephone line. However, the ADSL copper wire network has certain limitations. It is difficult to lay fixed wire to all locations and the network physically deteriorates over time. BT's roll out of ADSL faces an additional problem, in that connectivity speeds fall off sharply at distances over two miles from a telephone exchange. 

BT have said that where sufficient numbers of people express an interest in broadband, they will "broadband enable" the nearest exchange. However, some users have reported that this service does not operate properly yet and that the threshold (number of users) is highest in rural areas. BT have also just announced a mini-broadband ADSL option, which they claim could make rural roll out somewhat easier.

Providers like Telewest and NTL provide another fixed link option through their cable network, using the same cables that deliver cable TV. But the map of areas where cable runs past the front door is very focused upon urban areas and shows little sign of expanding into rural locations. 

Interestingly, there are also various networks operated by utilities and others, which could provide possibilities in some locations. Some run through the countryside or into market towns. They include networks under the towpaths of British Waterways canals and alongside railway lines. However, the canal-side optical fibre lines are owned by Easynet/ Marconi, who have veto over their use. Commercial confidentiality also makes it difficult to know exactly where such networks exist.

Fixed wireless/wireless

Fixed wireless technology is a hybrid between fixed line telephony and local wireless stations. These systems are regarded by some commentators as one of the best technologies for providing broadband access in remoter rural areas. However, despite the promise of the technology, Government auctions of licenses have had a lukewarm response from the market.

High bandwidth radio (SDH radio) is an option, which may be more reliable and cost effective for rural areas than satellite. BT has trialled a small localised radio network in Wales. The main drawback is that wireless requires the erection of masts - especially tricky in protected landscapes (although masts can be shared by providers). 

Another possibility which has been raised is that of tapping into the extensive emergency services network, which will apparently require upgrading to broadband capability in due course. Again, the erection of masts for this is a potentially problematic issue. 

Mesh wireless is a further option for delivering broadband services. BT is currently trialling this technology, to explore its suitability in areas currently beyond the reach of ADSL. Mesh radio is a new generation of technology that allows business and residential users to connect with adjacent customers or neighbours, rather than directly with a base station. Roof-mounted nodes are used, and each node in the mesh transmits to and receives from other nodes. One advantage is that the large initial capital investment in base station infrastructure is avoided. It is claimed that this could generate positive cash flows in less than half the time it would take for a conventional network. 

3G mobile

3G mobile phones have poor content and suffer reception problems. Consequently, take-up of internet services via mobiles has been very low to date. Notably, 3G also requires four times the density of masts of current generation mobiles.

Satellite

Broadband satellite has been available for some years, but uptake has been slow, mainly due to its high cost. The advent of Digital Video Broadcasting (DVB) means that satellite has fallen somewhat in price. However, it is always expected to be comparatively more expensive than ADSL or cable, due to the kit needed (reception dish, etc). The big advantage of this technology is that it can readily be made available everywhere and so has the potential for 'plugging the gaps' in rural areas. 

There are various ways in which satellite can be used. For example, one-way satellite (satellite outbound) is useful for basic dissemination of data. Central sites publish to multiple sites without any return path e.g.. national curriculum data to primary schools. This keeps the cost down (and some claim it to be the cheapest option). However, it's use is very limited. Hybrid satellite can be used by sites which receive more data than they publish. This is where the path for publishing data is lower bandwidth (standard telephone wire) and the path for receiving data is broadband (satellite). Two-way  satellite (i.e.. satellite out and return) is a premium service, which will remain expensive. One advance is that it is now possible to have two-way satellite with just one reception dish. 

Planning permission is an issue with satellite technology. Permission is needed for: satellite antenna larger than 90 cm;  two or more upward facing dishes (i.e.. where there is already a dish for satellite TV); and any telecommunications development in designated areas. Different restrictions apply for satellite antenna in residential areas. 

Another potential drawback with satellite is 'latency', because the signal has to go up to the satellite. This means, for example, that video-conferencing does not work well due to a time delay. It is also worth noting that many satellite suppliers are currently paper-thin organisations, unable to provide much customer support. However, this is an area where technology is improving. 

In March 2002 BT rolled out their broadband satellite service nationwide, following trials in the Highlands & Islands of Scotland and Northern Ireland. This service is mainly being marketed at small to medium enterprises, which BTopenworld consider a prime market for rural broadband take-up.

ANNEX B

PUBLIC SECTOR APPROACHES IN OTHER COUNTRIES

France took measures in 1999 to offer access to a 2 Mbps link to all citizens and businesses by 2005. The cost of additional nationwide infrastructure is estimated at almost Euro 400 million, with a fifth of this allocated by DATAR, the public body devoted to regional development, and the remaining investment coming from various ministries and the regions. The legal and regulatory framework has also been amended to allow local authorities to take action if the private sector is unwilling to do so. A law was passed in 1999 which authorises local public investment "if the offering of broadband services or infrastructure cannot be supplied by the market at a reasonable price or does not comply with the technical or quality requirements expected". The local authority cannot operate the infrastructure once financed in this way - it is leased to an operator, with public expenses recovered after an eight year period. The French Government has also placed emphasis on the introduction of public access centres, co-financed by national subsidies and local authorities, and aims to introduce 7,000 access points by 2003. All local employment agencies will provide this facility, as well as most public libraries and a significant number of post offices. 

Sweden's broadband initiative will roll out in several stages (total cost equivalent to more than US $800 million). A commercial backbone network to all municipal centres is planned by the end of 2002. Government funding will cover regional line connections from 2000 to 2004. There will also be Government grants to local authorities and tax relief to subscribers over the same period - intended in particular to facilitate access to the broadband network in sparsely populated areas.

Canada announced in October 2000 that high-speed broadband access would be available to all communities by 2004. A task force was given responsibility for making recommendations on how to attain this goal. Referring to remote and rural communities, the announcement referred to "the needs and characteristics of communities which without government involvement will not likely gain access to private sector delivered high speed services by 2004". One of the Canadian Government's key initiatives has been the Canadian Community Access Programme. This programme was originally devised for rural areas (but has since been extended to less favoured urban neighbourhoods). The basic function of a Community Access Centre is to raise the level of IT awareness, provide training and offer Internet access to inhabitants. Centres rely heavily on volunteers. Applications are made for funding - Industry Canada covers 50% of the total investment cost, with the other half coming from the communities concerned.

In the United States, a Telecommunications Act was passed in 1996, which does not preclude local direct public investment in telecommunications infrastructure if the market does not supply the expected level of service. The possible extension of universal service obligations for broadband infrastructure have been considered by the Federal Communications Committee.

In the Southwest Region of Ireland, the telecoms policies pursued were based upon delivery of public services in rural and remote areas. It was decided that the region's public services would constitute a single customer base for a broadband ATM system, since their combined phone bills already represented the largest single telecommunications account in Ireland. An ATM line was installed and extension of the network into more rural areas is being considered, with applications contemplated including distance education and telemedicine. 

ANNEX C

IT/BROADBAND PROJECTS SUPPORTED BY THE AGENCY

This annex lists projects the Agency is already funding or involved with, that have a significant ICT or broadband element.

Vital Villages

• the Rural White Paper commitment to deliver an internet based management and best practice toolkit for Parish and Town Councils. Research will evaluate existing use of ICT by Parish and Town Councils and other rural community organisations, to identify what the Agency may provide. This is a partnership with NALC, SLCC, Ruralnet, UKVillages and others.   

• facilitating the pilot "Equipping Rural Communities" Learning Network. The next topic to be examined will be "How can ICTs be used most effectively in rural communities?", which will seek views about how the Agency should deliver the RWP commitment. Previous Learning Network discussions have revealed that IT is an excellent means of communicating with rural communities in a way tailored to their needs (i.e.. they can select information relevant to their topic of interest and location).   

• Cheltenham and Gloucester College previously developed the Village Appraisals software. Upcoming work will evaluate packages that could be used for the Parish Plans process.
• there are various Community Service Grants which are helping to fund village IT projects. They include the Winchelsea Littleshop Association re-opening of a village shop as a community run business with IT/computer centre (which can also be used to improve IT facilities for the local school). Egerton Telecottage is an expansion of an existing centre, to provide it with a full range of IT-based community services, for use by any member of the community. In Laughton we are funding the provision of open access computer facilities in the village shop.   

Rural Transport Partnership

• a countywide Community Transport Database  for the three Hampshire RTPs. The project will establish a core of community transport information, linked to an interactive website and updated regularly. A pilot database has been developed and it is expected to go live to the public in Summer 2002.   

• Alston Cybermoor (Cumbria) uses IT to provide local transport information, to reduce the number of car journeys by encouraging car sharing and improve the take-up of existing transport services. The project will develop a website for transport information, and an on-line booking service for taxis and community minibuses. Webcams will provide views of local roads to show travel conditions. The project will include training to use the new services, promotion and project evaluation. This project area is part of the DfES "wired up communities" project providing internet access to every household in the parish.   

• the Information Technology for Community Transport (Worcestershire) project will involve research and surveys among community transport providers in the county, to prepare costings for an integrated countywide system, which installs equipment and software, and provides training for community transport staff and volunteers.   

Finest Countryside

• LaMIS (Land Management Information System) is a project being developed by Hampshire County Council with enabling funding from the Agency. The project is currently at Phase I, assessing the feasibility of creating an interactive IT portal for farmers and landowners. Landowners will be able to download environmental datasets and strategic management plans applicable to their landholdings, to create their own whole farm management plan, which may then form the basis for a contract with DEFRA for agri-environment support, risk-based regulation, etc. LaMIS is liaising closely with MAGIC. Phase II of the project, will start to address the architecture of plan structure and content, and its delivery via the web.   

Rural Services

• the Rural Academy national demonstration project includes work to demonstrate the potential of ICT for service delivery. It has been set up with partners in the Rural Action Zone in South Holland (Lincolnshire). It will extend opportunities for lifelong learning, using ICT to link 8 secondary schools to each other and to providers of learning and cultural activities. Every home in South Holland will be linked to one of the school sites. Strands to the project include: using digital technology, conferencing and mutimedia to develop a classroom of the future; modern language teaching that allows pupils to engage with native speakers via video-conferencing; using IT to share resources for family learning; and supporting adult basic skills training. In the longer term, these schools will be linked to 2 FE colleges, 2 universities, 43 primary schools, 2 special schools, and homes and businesses, creating a network of learning.   

• there are 3 ICT projects within the Agency's Social Exclusion programme. One is to develop a website for the blind (Nottinghamshire), to help those who are visually impaired to benefit from the internet and IT. A second is an evaluation of rural telematics applications as a means to address social exclusion (North East). The third is investigating the potential impacts of ICT applications on spacial planning and development, in an EU INTEREG/ASPECT community initiative (North East). The Agency's input to this project has developed a social exclusion component and brought a market towns focus.   

• the Locals Online national demonstration project is assessing rural pubs as centres of community regeneration.  It is bringing ICT resources to rural communities to overcome the disadvantage of remoteness, open up access to education and training, and bring information and services. ICT centres will be based in 5 pubs in Dorset and Northumberland. 
• Rural Services branch have been working with the Office of the Deputy-Prime Minister to encourage rural local authorities to put forward a bid for Government "pathfinder" funding, to test ways of delivering services in rural areas using ICT. An initial expression of interest, led by the East Riding of Yorkshire Council, but also including Oxfordshire, Devon, Northumberland, Worcestershire and the Welland Partnership, was submitted in July.
• we and the Department for Education & Skills are jointly commissioning an evaluation of rural UK Online Centres, which will result in a good practice guide next year. The bidding guidance for UK Online Centres has already been amended to allow for further rural projects, including in mobile centres, pubs, libraries and community centres.   

• the Community Development Foundation have been appointed to develop a network and training programme for the social exclusion Community Development Workers in RCCs that we have recently established in post. Working with RuralNet, this will include some IT resources.   

Market Towns

• information about broadband availability and demand is now being collected in the market town healthchecks. Two examples of market towns that are benefiting as a result of the Government's Broadband Fund are Alston (Cumbria) and Framlingham (Suffolk).   

Enterprise, Land Management & Tourism

• we are non-funding partners for an English Tourist Council project called EnglandNet, which is an online tourism network where people can access quality information about a wide range of tourism products across the country and can book online. Linked to this are e-businesses advice for 7,000 rural tourist businesses over the next 2 years, showing them how to make the most of technology.   

Regional Influencing

• The Agency's Regional Offices are involved with various IT-related initiatives. For example, the North East office has worked jointly with ONE North East on the creation of Market Town Portals, linking at least 40 businesses, to encourage the take-up of e-commerce. The Region has also been involved in the Tynedale Hall Consortium, which received funding from the New Opportunities Fund and DfES to install ICT facilities in 23 village halls/community centres in Northumberland. The West Midlands office are engaging with Advantage West Midlands about their regional ICT Strategy, and will be represented on their ICT Steering Group and Regional Broadband Stakeholders Group. The office is involved with regional ICT research led by the RDA and Government Office, under the umbrella of the Rural Accord and Objective 2 programmes. The South East office are working with SEEDA, including its commissioning of consultants to assess the merit of satellite broadband for the rural South East. Research, Data & Information 
• as part of the Agency's State of the Countryside work, we are developing an indicator theme about ICT provision in the countryside. This will be one of the core sets of indicators that the Agency will report upon annually. Work is in-hand to clarify what data exists and decide what measures we should adopt.