Download - David Cullen NYnet
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The Connecting North Yorkshire Model for Rural NextGen
David Cullen, Chief Executive NYnet Ltd
INCA Seminar
York, 24th November 2011
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è Geography and population distribution mean that telcos will not develop the infrastructure necessary to provide B/B to many NY residents
è Low number of connections (= users) per kilometre of network = unattractive commercially
è Large number of no-spots where “proper” B/B is simply not available
What is the Broadband problem in the sub-region?
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3,200sq miles and 0.7million people
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è Approx 18% of population receiving below the USC
è Approx 45,000 residents (7.6% of population) unable to access any usable BB
è 13.7% of working age population self employed (8.4% YH, 9.4% national)
è Self employed + micro-businesses (1 − 4 people) account for 49% of jobs in Dales and 37% in Moors
Some other relevant statistics
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NYnet – long standing objectives 1. Provide an infrastructure capable of delivering advanced
next-generation broadband services to the public sector, citizens and business.
2. Provide ‘faster, better and cheaper’ public sector networks to enable more efficient and effective public and corporate services.
3. Stimulate economic growth through helping the market to deliver next-generation broadband services to business and residential users.
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NYnet – bringing the ‘anchor tenants’ Connectivity customers • WAN 2 - 172 non school sites
- 375 schools • Districts + Police + Fire + 2 x Parks • PCT – 130 sites • 1 other public sector organisation • 9 business parks • 7 community schemes covering over 20 communities
Value Added Services • VPN Services • DR Framework
Turnover 2011/12 Forecast - £8.3m for NYCC
Over 800 (90%) public sector sites: the largest and most successful PSN in the UK?
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High quality B/B = B/B appropriate to people’s needs
Our vision is to bring the advantages of high-quality broadband to 100% of businesses and citizens in York and North Yorkshire by 2017. We want to enable all to participate in the digital world so that they can carry out their business when and how they wish.
The Connecting North Yorkshire Vision
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Brief History of CNY June 2009 Government release Digital Britain (DB) report
Sept 2009 NYnet Board considers implications of DB report 2 responses proposed è address not spots @ 2mbs è Market Towns initiative
Jan 2010 NYnet Board approves revised Business Strategy è not spot pilots to test technology etc è Market Towns – identify possible £ streams è submission to extend State Aid so can progress above
June 2010 State Aid approval confirmed – just needed the £ ! F
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July 2010 Central Government Ambition for Broadband • We want communities and local authorities to have a say in
how these networks will be built. • Community need should drive the process, not Government
decisions made in Whitehall. • A world class communications network is an essential
element of recovery and will help us to grow the economy. • The delivery of public services will be more efficient and cost
effective, as well as more inclusive, and this is crucial for local authorities.
• The strategy brings together the many policy areas that we are working on across Government which will enable this to happen, as well as setting out the Government’s approach to investing the £530m secured as part of the TV Licence Fee settlement to help deliver superfast broadband into more rural and remote locations. F
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July 2010 BDUK launched • 2 key strands:
è universal service commitment (USC) @ 2 mbs) è Next Generation Access
• part of DCMS – staffed by civil servants + consultants • local authorities to lead • want to do pilots
Aug/Sept 2010 NYCC/NYnet submit proposal to become a BDUK pilot based on
• NYnet’s exising track record • State Aid approval in place • discussions re ERDF funding already in hand
(= matched funding)
= NYnet’s vision
F
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October 2010 Informal advice from BDUK re pilot status for NYCC
10 Dec 2010 Formal BDUK letter – NYCC one of 4 ‘superfast broadband’ pilots
9 Feb 2011 Inaugural meeting of CNY Board, consisting of three main stakeholders:
BDUK, NYCC, NYnet
28 Jan 2011 24 June 2011 Presentations to LGNYY – unanimous support
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CNY Board responsible for è preparing Vision (and Strategy) è securing funding
BDUK ERDF Performance Reward Grant anything else
è overseeing the procurement – being undertaken by NYnet as sub contractor to NYCC
è manage interface of CNY with existing NYnet business è liaise with stakeholders è comms/PR è Go ON project
NYCC is the Accountable Body
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Procurement – Key dates
• OJEU published
• Expressions of interest received
• Shortlist agreed by CNY Board
• Invitation to participate in dialogue - ends Nov 2011
• Invitation to continue dialogue - ends March 2012
• Final Tenders submitted - early June 2012
• Contract Awarded - late June 2012
• Roll-out begins / ends - Q3 2012 / Q2 2014
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As modelled CNY will provide è Next Generation Access to market towns
(= 45% of population)
è high-speed hubs to approx 250 communities that will provide backhaul infrastructure for community projects using Partners who provide the Access Network and Internet Services On average 1 hub will support 3 parishes – there are 731 parishes, of which 356 have < 200 residents
è ultimately ratio of market towns to hubs will depend on £ available relative to outcome (= cost) from procurement process
è estimate need £50m to complete the Vision
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Now
York & Harrogate “Superfast” = >24Mbs +
‘Market Towns’ c. 8Mbs near exchanges
Rural Areas/ small Market Towns
c.2Mbs with high contention (lots of people using the same bandwidth)
‘Deep Rural’ 0.5 – 2Mbs (the ‘poor/ not spots’: 18% of N Yorks- highest in the country)
‘Before Connecting North Yorkshire…’
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Now Following CNY
York & Harrogate “Superfast” = >24Mbs + No change
‘Market Towns’ c. 8Mbs near exchanges >= 24Mbs
Rural Areas/ small Market Towns
c.2Mbs with high contention (lots of people using the same bandwidth)
2 - 24Mbs depending on l o c a t i o n , t e c h n o l o g y, investment etc
‘Deep Rural’ 0.5 – 2Mbs (the ‘poor/ not spots’: 18% of N Yorks- highest in the country)
Target of <2% with 2Mbs, rest 2 – 24Mbs as above
‘……..and After’
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D: Areas with minimum of 2MBs (satellite etc)
C: Infill areas requiring grant/ fund support to achieve 2-‐24Mbs
B: Infill areas at 2-‐ 24Mbs funded through CNY
Category D Target: <2%
A: Areas receiving >24MBs through CNY
Category A Target: 75-‐ 90%
Categories B&C Target c. 8-‐23%
The Strategy for 100% Coverage
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Commercial Models è State Aid Approval (and common sense) requires procurement
to consider various commercial approaches
è ‘Traditional’ Gap Funding of a telco’s own network
è Design, Build and Operate (DBO) an infrastructure for the Authorities (NYnet and NYCC) to run and receive income
è A DBO+, where the telco partner also invests for share of revenues/ margins
è Gap Funding will always favour an incumbent or determined entrant with deep pockets comfortable with a long RoI
è Bidders remain interested in both models
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Investment Issues è Still have a ‘worst case’ of £18m shortfall over 10 yr business
case:
è Modelled need for £50m
è £17.8m (BDUK) + £8.5m (ERDF 47% match) = £26.3m
è Anticipated margins from public sector ‘anchor tenants’ revenue- the key differentiator in N Yorks
è Good news: plenty of capital on the global investment markets for secure, stable infrastructure initiatives
è Bad news: UK Broadband not seen as ‘secure and stable’
è Need to do all we can to change this perception and help suppliers raise investment
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Project Speed Installation Cost
Rental Cost
Maximum available
Existing service
NANDS 5-10 mbps £100 £20 - £30 70 mbps 0 Gillamoor Various £0 £12 70 mbps 0 VOM 10 mbps £100 £15 - £25 70 mbps 0 – 1.5 mbps Bradley 5-10 mbps £50 £13 - £19 70 mbps 0 – 1 mbps Barlby 5-10 mbps £50 £13 - £19 70 mbps 0 – 1.5 mbps RHB 10 mbps £0 £12 70 mbps 0 N u n Monkton
2–20 mbps £100 £15 - £25 70 mbps 0 – 1 mbps
An example: rural price sensitivity……
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Project Project Start Date Target Actual Planned %
NANDS 04/03/2011 As many as possible
68 141 48
Gillamoor 01/09/2010 As many as possible
120 150 80
VOM 04/03/2011 107 107 150 100 Bradley 04/03/2011 100 047* 200 47 Barlby 04/03/2011 100 027* 150 27 RHB 07/09/2011 100 ** 200 ** Nun Monkton TBA 100 ** 100 **
Key * first quarter figures ** not operational yet
…. vs take-up
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è ‘Think like a telco’….
è Find a champion/ champions- at every level
è There isn’t enough money to go around, public sector need to invest all it can
è Public Sector aggregation plays a major part
è Engage communities and community level providers
è Explore alternative models that can bring different investment and enable local communities
Summary