The availability of broadband Internet services in remote and rural areas could increase if a trial project involving BT and public bodies in Cornwall is a success.
The partnership, called Access for Cornwall through Telecommunications for New Opportunities Worldwide (ACT NOW), will see up to 12 exchanges ADSL-enabled. Support and equipment will be supplied to 3,300 local businesses in an attempt to encourage them to pay for a broadband connection.
A number of bodies are contributing a total of £10m to finance ACT NOW. The lion's share -- £5.7m -- is coming from the European Regional Development Council, and BT will spend at least £1.7m on upgrading the exchanges. Revenue from companies buying into the scheme is expected to generate a further £2.5m.
The project attempts to address one of the key obstacles to broadband availability in less-populated areas -- the fear that there won't be enough customers to make it economically viable for a network to provide a service. Although direct help will only be available to the selected 3,300 small and medium-sized local firms, both other businesses and consumers in the area could be tempted to sign up to broadband now that their local exchange can support ADSL.
"There will be a massive educational programme to encourage the selected firms to sign up, and we wouldn't be surprised if there was plenty of local press attention on the benefits of broadband for home Internet users," a BT spokesman told ZDNet UK.
BT might even find itself competing with rival wholesale operators, if there should prove to be plenty of demand in Cornwall. "Companies such as Thus and Colt, who are involved in local-loop unbundling, might well want to put their equipment inside the exchanges if this project succeeds," speculated the BT spokesman.
European Regional Development Council money was available because it sees Cornwall as an area in need of economic help.
Although the government recently announced that £30m was available for regional development agencies to spend on increasing public understanding of the benefits of a high-speed Internet connection, it isn't prepared to offer "fiscal incentives" to stimulate investment in broadband networks.
"Basically, the regional development agencies only have a few million pounds each to spend on education and marketing," complained one industry insider.
Some of the money from development agencies will be used to subsidise the cost incurred by BT in getting local exchanges ADSL-enabled. Since rolling out ADSL to over 1,000 local exchanges, BT has been looking for financial assistance from other bodies to subsidise the cost of taking broadband to more remote places where demand is less.
Outgoing chief executive Sir Peter Bonfield, in a recent speech, warned that some parts of the country are not commercially viable for broadband, because "forecast demand is so low that we cannot justify the rate of return to our shareholders."
BT is hoping that the Cornwall experiment is more successful than a similar project begun in Wales two years ago. ADSL was rolled out to a number of exchanges, but very few people signed up. "In some cases, there are as few as 12 broadband customers connected to an exchange," said the BT spokesman.
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