EXECUTIVE SUMMARY
BACKGROUND
Broadband is considered to be a key enabler of e-business and is believed to have the potential to deliver substantial economic and social benefits. The Scottish Executive had its own broadband strategy in place from 2001 (under its devolved remit for economic development), which aimed to deliver affordable and pervasive access to broadband services in Scotland. Affordable access in Scotland increased from just 43% when the strategy was launched, to over 99% by the end of 2005 following the successful completion of the "Broadband for Scotland Rural and Remote Areas Supply-Side Intervention"( SSI).
The SSI's aim was to deliver affordable broadband access to every Scottish community by the end of 2005. In April 2005, the Executive signed a contract with BT to meet this commitment through the enablement of 378 un-commercial telephone exchanges for ADSL broadband provision. This target was met on 29 December 2005. This has resulted in every Scottish community having access to at least basic broadband (512Kbps), thereby fulfilling the aims of the original Executive broadband strategy.
The aim of this piece of research was to evaluate the degree to which the Executive, through their Supply-Side Intervention ( SSI) has fulfilled its commitment to providing broadband to every Scottish community. The research was designed to focus on those areas where the policy was designed to make the biggest difference, namely the remote and rural communities in the intervention area. The objectives for this research were:-
- To undertake a concise literature review.
- To measure the success of this policy in terms of increased take-up and usage of internet services resulting directly from the availability of broadband.
- To assess whether any social benefits have been accrued to communities within the intervention area.
- To assess the economic benefits brought to rural businesses.
METHODOLOGY
A staged approach was adopted for this evaluation. The first task undertaken was a short literature review of Supply Side Intervention in Scotland and of government intervention in broadband outside the UK. There then followed an initial quantitative phase to provide robust statistical data on both household and business use of broadband in SSI areas. The business survey of 303 respondents was conducted by telephone. The household survey of 508 respondents was carried out by field interviewers in a sample of communities affected by the SSI. A subsequent qualitative phase allowed for the exploration of a range of issues in an in-depth manner. The qualitative phase comprised of 4 groups of broadband users, 2 groups of community councils in SSI areas and 2 groups of non-broadband users.
MAIN FINDINGS
LITERATURE
- Much of the coverage in local press has focused on the community benefits and the idea that broadband is necessary to promote inclusion.
- There is a focus on the increased provision and use of online learning materials and the use of the internet as a learning resource.
- There is evidence of increased levels of remote working and businesses being run from home. There is also an emphasis on the increased use of online retailing in remoter communities.
- In other countries, broadband and internet access is seen as a driver for economic growth and social inclusion. It is also viewed as a strategic imperative for many countries' global competitiveness.
SUPPLY SIDE INTERVENTION
- Word of mouth and personal contacts were the way in which most people recalled hearing about broadband, although there was a mix of methods and local campaigns in most locations. The work of individuals appears to have been more memorable.
- The majority of those who have broadband now, signed up for the service at around the time it became available. Most of these people were upgrading from dial-up services.
- The role of the Scottish Executive in the SSI was known about by just under half of the public and half of the business respondents. The Scottish Executive has not received a great deal of credit for their role in the process.
- BT dominates the market in areas affected by the SSI.
- Many people believe that broadband would have been available in their communities at some time in the future whether the Executive had intervened or not.
- If the Executive had not intervened, the majority of people would have remained with dial-up connections and would have continued to be frustrated by the speed of uploading and downloading, as well as the fact that the internet was tying up phone lines.
EXCHANGE ACTIVATE
- The majority of households had not experienced a problem in placing an order for broadband in EA areas.
- Where exchanges were full, there was considerable frustration with providers, although much of the public frustration was aimed at BT who were believed to be responsible for a failure to upgrade the exchange.
- There was some frustration with providers who were unable or unwilling to provide services in EA areas, particularly where individuals were still being exposed to promotional campaigns by those ISPs.
- Some individuals in the focus groups expressed specific disappointment that the speed of service offered in EA areas did not meet their expectations for broadband services. However, the quantitative research revealed that dissatisfaction with speed was not limited to EA areas.
DIFFERENCES MADE BY BROADBAND
- Community benefits were hard for many people to identify and most of the benefits were focused on households and businesses. However, many people believed that the community was less remote and, therefore a more attractive place to live and work for many.
- Actual use of broadband, for both households and businesses exceeded the levels anticipated by individuals before signing up.
- The biggest benefits for households were acknowledged in uses where there was a need for exchange of data quickly or in big volumes.
- The biggest difference it has made for households and businesses is in the ability to do things quicker. However, and interestingly, speed remains the biggest cause of dissatisfaction in all areas where intervention took place.
- Considerable proportions of businesses reported growth in turnover, productivity and new markets. Some firms reported growth in employment, but this was less widespread.
- Specifically, 42% of businesses reported that there had been growth in productivity with the mean figure for productivity growth being 25%.
- The arrival of broadband was credited with contributing to innovation in around half of the businesses.
- Overall 81% of householders and 83% of businesses reported that they were either very or quite satisfied with broadband.
DRAWBACKS OF BROADBAND
- Community groups were more aware than individuals or businesses of potential negative issues. The large majority of individuals were relatively unconcerned about security or criminal uses of the internet which might be facilitated by broadband.
- Negative issues were limited and the specific impact of broadband was not always clear. Other factors were acknowledged as contributing to the closure of rural post offices and a lack of affordable housing, although some individuals viewed the arrival of broadband as having an impact in these areas.
NON USERS
- There are two distinct types of household non-user. Firstly, there are those who are frustrated with a lack of availability either because they are too far from an exchange or in an Exchange Activate area where the exchange is full. Secondly, there are those who choose not to have access, either because they do not feel a need or because they believe it will be too expensive.
- Businesses that do not have broadband have, at this stage, generally decided that they do not have a business need for it.
- Awareness of broadband is relatively high among non-users and the majority do appreciate that it is available in their area.
CONCLUSIONS
The take up and use of broadband in communities enabled by the Scottish Executive's SSI has been high. Both first time connectors to the internet and those who were previously on dial-up report high levels of satisfaction with the service being provided. Access to broadband has not only allowed individuals and businesses to do things quicker; it has also meant that their use of the internet has expanded. Children and young people are particularly attracted to the social networking aspects of the internet and adults are more attracted by the shopping and learning aspects, although neither of these generalisations is mutually exclusive.
The communities within the intervention area have benefited, in some instances, from the arrival of new families and businesses who would not otherwise have located there, bringing new life and vitality to each affected community. The only direct downside identified is the possible impact of online shopping and services on local providers. Some people believed that broadband was one of the factors attracting incomers to areas and that their arrival was pushing up house prices and reducing house availability.
A large proportion of businesses within the intervention areas have reported commercial benefits from the availability and use of broadband.