Public investment in fibre (again)

I blogged a few days ago about the public-private partnership lined up to provide high-speed broadband fibre throughout Cornwall and the Scilly Isles.

A couple more details have come to light here [paywall may be involved], albeit in the context of a weekly review on which the detail is scant. Essentially, however, the additional detail is that the take-up of broadband is 12% higher in Cornwall and the Scilly Isles than in the rest of the UK, which means that the risk of the investment to BT is a lot lower than otherwise; and the second is the comment from the development manager of the Cornwall Development Company (which is also involved with the project) that there is pent-up demand for high-speed broadband links in rural areas because of their isolation.

If true, this would turn conventional wisdom somewhat on its head (and we should also remember here that incoming money has made Cornwall, while still isolated, an awful lot less of a rural backwater than it used to be, which does make the county a more complex proposition). Of course, it may not be true (and the CDC may well still be in hype mode). If it was true, however, then the £100/head of public money which is being used for the project would seem to be much less risky an investment in the sense that public authorities could have confidence that take-up would be high and that investment on this scale would seem to provide value. At the same time, this brings us a little closer to the ‘crowding out’ thesis of the right – i.e. that public investment would, in this situation, be more or less replacing private investment since it would be more likely that, where demand was likely to be high, the private sector would be more inclined to get involved.

We can probably discount this, on the evident fact that the private sector is not getting involved in fibre provision extending into the ‘final third’ (or, indeed, not even as far as this). Nevertheless, it does raise the suspicion that, if there is pent-up demand, not only is the economics of fibre in rural areas less tough than hitherto envisaged but also that the telcos may be withholding somewhat.

Intriguingly, the £100/head of public investment being provided by the ERDF indicates, if the Cornwall example is generalisable, that the 20.6m people in the ‘final third’ (on the basis of a UK population of some 61.8m) would cost £2.06bn in public finance as regards rolling out extensive fibre connections – almost exactly the £2bn that Steve Robertson, CEO of Openreach, had already indicated would be the public cost of achieving the government’s ambitions of having the best high-speed connections in Europe (or less, given that there is likely to be fewer than 20.6m people in the ‘final third’). This is an interesting comment, given that there is extensive fibre to the premises solutions envisaged in the Cornwall project, on what could be achieved with a relatively small amount of publicly-sourced finance.


Public investment in fibre – a lesson for the UK government

BT has announced plans for a fibre project ‘to tranform the Cornish economy‘ under which next generation fibre-based network infrastructure will be rolled out to up to 90% of local businesses and homes in Cornwall (and including the Scilly Isles).

The investment is on top of BT’s existing £2.5bn national fibre investment programme and BT believes (although without citing evidence other than the sorts of new services that fibre investment will help deliver) that it will create up to 4,000 jobs and protect a further 2,000 in a largely rural economy which does not otherwise have a great deal else for local people once all the tourists have gone home.

Particularly interesting is that 50% of homes and businesses are expected to be hooked up to fibre to the premises solutions, delivering faster speeds and delivering some future proofing of the investment – nationwide (or, perhaps, outside the Cornish nation), the investment in fibre is expected to be much less, BT having estimated that one in four homes and businesses within its investment programme would have fibre to the premises (i.e. about 17% of the country).

Excitingly, the £132m investment programme (final costs dependent on demand) is split approximately 60:40 on a private-public basis, with BT being partnered not by UK public sources of finance but by the European Regional Development Fund, which is contributing £58.5m of the finance. This is the largest investment in England backed by EU regional funds, which the ERDF clearly sees predominantly in terms of its role in encouraging a lower carbon economy (according to Johannes Hahn, European Commissioner for Regional Policy). With the population of Cornwall being just over half a million people, the scope of the public investment is about £100 per head.

This looks a good deal to me – providing fibre to a large region on this cost basis illustrates what can be done when the public sector gets involved: a lesson for the ConDems that fibre needs more than just warm words and crossed fingers. The trouble is that only Wales otherwise has the requisite development status [possible paywall] triggering the ERDF investment: so the wider applicability of this particular project is scant (while the few areas of the UK that thus qualify on this basis is disappointingly small).

So, it seems we may reasonably expect a similar investment for Wales reasonably soon but, otherwise, a gap which will continue to remain outside the two-thirds which will receive fibre investment on a competitive basis while the ConDems – well, while they wait to see what happens. Actually, after they have finished their programme of public spending cuts, in the process winding up the regional development agencies which facilitate this sort of deal, there may not many public institutions left to broker such deals in the future. Shame.

Turkey’s new ally?

So call-me-Dave has turned up in Ankara chummily vowing to ‘fight’ for Turkey’s membership of the EU.

Well, good on you – at least on the face of it (though comments as to the wider geo-political interests, with regard to Turkey’s ability to act as a restraint on Iranian nuclear ambitions, are no doubt also on the mark as to why this support was offered). It’s right that Turkey can play a bridging role between east and west, and provide a greater understanding of Islam within the EU, and this is the sort of role that Turkey, which applied for EU membership as far back as 50 years ago, has long sought for itself. In principle, and subject to meeting the demands of EU membership, including over EU member Cyprus and a better domestic human rights commitment, Turkey should be in the EU.

But: fine words butter no parsnips – and, aside of Cameron’s ability to say one thing to one audience when circumstances demand and another to a different audience (like here, for instance, over the Building Schools for the Future Fund; over the scrapping of the NHS central database; and over the continuing uncertainties over the establishment of the Green Investment Bank which, as the TUC’s Philip Pearson argues, are indeed stalling the coalition’s green ambitions), he also has policy inconsistences which mean that ‘fighting’ for the rights of Turkey may not, in the end, come to much. As Denis MacShane pointed out in yesterday’s ‘Comment Is Free’ bit of the The Guardian, these would include:

– leaving the mainstream of the European Parliament

– allying with the trenchant right-wing in the EU for which Cameron’s entirely legitimate desire for a greater understanding of Islam is not a policy priority

– a policy promise of a domestic referendum on any new EU treaties, endorsement of which is likely to be a tough ask in the context of domestic politics encompassing the UK Independence Party (though Cameron is not exactly a stranger to retreating from promises of an EU referendum).

It will be interesting to see whether Cameron’s self-portrayal as a friend of Turkey actually means anything in the tough battles to which these issues point, or whether his growing reputation as someone who backs down in the face of adversity will continue to find endorsement in, as I suspect, the eventual dropping of Turkey somewhere down the line.

ICJ says Kosovan independence ‘not illegal’

In a rather surprising move, the International Court of Justice has ruled that Kosovo’s declaration of independence in February 2008 did not violate international law or UN Resolution 1244. But the decision was an interestingly split one: nine of the fourteen judges agreed with the advisory opinion, plus the president, while four votes against and there was one abstention: see the Balkan Insight report.

The decision is non-binding and is likely, as Florian Bieber argued earlier this week, also on Balkan Insight, to have its major importance not as a golden bullet but in the form of continued diplomatic negotiations towards establishing a working relationship between Kosovo and Serbia. Nevertheless, it seems likely to give added emphasis to the former, whose President was – rightly – calling for a ‘dignified celebration’ of the decision (since the two sides do need to work together on their common future, and avoiding a backlash both in Serbia as well as amongst Serbian citizens living in Kosovo is a fundamentally important means to achieve that). Serbia, which had brought the case to the ICJ, may well not in the short-term change its position of non-recognition of an independent Kosovo, but the long-term future of both within the European Union will essentially make such a perspective redundant as well as, potentially, providing for the means by which it can be dealt with – even if that is something to which the EU itself needs to adjust.

States which have refused to recognise Kosovo pending the ICJ’s decision may well not be that numerous, since many have actually, or potentially, secessionist movements already in existence on their territories (chiefly, Georgia, Moldova and Bosnia, but also encompassing Romania and Slovakia, not least given the background of the stridently nationalist noises coming from a right-wing Hungary [subscription required]). The full ICJ decision needs to be digested as regards precisely how much succour it might give to such movements, or grounds for fear amongst countries hosting them – but, as I argued last week, the practical circumstances in the background of Kosovan independence do provide hopes that this particular ICJ decision can be distinguished on its facts without paving the way for secessions and unilateral, unagreed border ‘adjustments’ elsewhere.

Kosovan independence: ICJ decision soon

Balkan Insight has spotted that the International Court of Justice will announce its advisory opinion on the legality of Kosovo’s declaration of independence next Thursday, at 3pm.

The case, brought by Serbia, which rejects Kosovan independence as illegally constituted, is, of course, unlikely to be resolved next Thursday. Many discussions are yet to be held and the Court’s opinion provides one more landmark stage in this process. A genuinely reform-minded regime in Serbia under Boris Tadić provides a hopeful sign of optimism – his attendance at this weekend’s Srebrenica commemoration was welcome, as was the apology finally pushed through the Serbian parliament earlier this year.

Nevertheless, memories remain fresh; and wounds remain raw. They will heal – and tracking down and handing over Mladić, whose units were responsible for the massacres, to be tried in the Hague alongside Karađić will help. Tadić needs to follow through on his weekend words here.

In the meantime, and in this other theatre of that war, Kosovo’s independence must be allowed to stand. While upholding the general principle of the importance of protecting the integrity of national borders, a state that attacks its own people, conducting campaigns of terror amongst and making refugees of its citizens, has conceded the right to have those borders respected. Modern Serbia needs to recognise that its past approach is ultimately why Kosovo has gone: and both Kosovo and Serbia need to be given support for EU accession: preserving peace amongst states previously at war is simultaneously the Union’s raison d’être and its continuing most important role. Greater leadership is needed here, too – despite the Union’s other evident concerns, building peace and relationships is what it exists for and it needs urgently to expand its role in and for Serbia and Kosovo.