BT and EU plan £132m Cornwall rural fibre rollout

Cornwall is to benefit from a massive, fibre-based next-generation broadband investment from BT and the European Union, the telecoms giant and Cornwall Council announced on Thursday.

Using £78.5m from BT and £53.5m from the European Regional Development Fund, the project aims to see between 80 and 90 percent of the county's homes and businesses gain access to fast broadband by 2014. Around half of local businesses are expected to get speeds of up to 100Mbps through fibre-to-the-premises (FTTP) technology, with the rest of those targeted by the project gaining access through slower fibre-to-the-cabinet (FTTC) technology.

"Local businesses will be given an all important head start through early access to world class communications and this will dramatically increase their competitiveness," Cornwall Council leader Alec Robertson said in a statement. "The high speeds on offer will attract new business investment into Cornwall, creating thousands of new job opportunities."

Europe's regional policy commissioner, Johannes Hahn, said the project marked the "largest investment of its kind supported by European funds in the EU and... will serve as inspiration for other regions".

According to the statement, the project will create 4,000 new local jobs and protect a further 2,000 existing jobs. Other service providers will also be able to piggy-back on BT's fibre, either through wholesale access or by requesting that exchanges be unbundled. The network will involve around 130,000km of fibre.

"This project is very exciting news for Cornwall and the Isles of Scilly," communications minister Ed Vaizey said in the statement. "It shows how the public and private sectors can work together to deliver local solutions to local problems. Households and businesses in this largely rural area can now look forward to having one of the best broadband connections in the world, thanks to Cornwall Council's vision, European funding and BT's investment and expertise.

"The government wants the UK to have the best broadband network in Europe by 2015, so today's announcement is a big step towards that goal," Vaizey added.

When it came into power, the new coalition government dropped its predecessor's commitment to achieving a 2Mbps minimum broadband speed around the country by 2012, shifting that deadline to 2015. However, according to Sally Davis, the chief executive of BT Wholesale, the UK government may still provide financial support to rural broadband rollouts of the sort announced on Thursday.

"[Rural areas] need to look to other sources of funding, not necessarily the EU," Davis said at a London briefing. "The government is considering how it will provide funds for the future for this type of project. There are other funds available [beyond the EU] and the biggest area will be what this government chooses to do." 

Indeed, the EU fund being used for the Cornwall project is only available to two UK regions — Cornwall and Wales — because their GDP falls below 75 percent of the EU average. Even then, Cornwall Council had to go through an 18-month approval process, which only ended in August.

"We believe this should be a real clarion call to every region in the UK," Davis said, adding that the first customers would be connected by February. "It builds on success we've already had in Northern Ireland working with the Department of Trade and Industry, and provides a blueprint for how we can bring next-generation broadband to all of the rural areas in the UK."

BT's funding for the project is separate from the £2.5bn it has already earmarked for getting high-speed broadband availability to two-thirds of UK premises by 2013. Davis said it was also "within [BT's] expected capital expenditure window for each year".

Tony Stuart, the non-executive director of the Cornwall Development Company, which is Cornwall Council's economic development arm, said at the London briefing that the investment equated roughly to £100 per Cornish citizen. "It's essentially a lifetime investment for Cornwall, and it's going to benefit the economy for decades to come," he said.

"High-growth dynamic businessess won't be hampered by their peripheral location," Stuart said, adding that the job-creation aspect of the investment will be added by enhancing Cornwall's "low-carbon green peninsula aspirations", due to a potential drop in the need for commuting to work in denser, more connected areas.