Digital Region

» see digitalregion.co.uk as it lived, on the wayback machine

~ the last words ~

In 2006 somebody in South Yorkshire looked at the map and worked out that Sheffield, Barnsley, Doncaster and Rotherham were going to be last in line for fast broadband, because the economics of a private rollout put them behind London and behind everywhere else with more money in it. So they decided to build it themselves. Digital Region Limited was formed in April 2009, owned by those four councils and the regional development agency Yorkshire Forward, and it is the only time a British region tried this at scale.

The money came from everywhere public. £44 million arrived as grants from Yorkshire Forward and the European Regional Development Fund, with another £40 million lent by Yorkshire Forward and the councils themselves. A further £10 million came from the technology partner, Thales Transport and Security, which also designed and built the thing. The headline number people used afterward was in excess of a hundred million pounds.

Technically it was a sub-loop unbundling network, which is a phrase that means something precise and unfortunate. They did not run fiber to anybody's house. They ran fiber from the telephone exchange to a cabinet of their own, placed beside the Openreach cabinet already in the street, and then rented the last stretch of BT's copper to carry VDSL2 into the property. Around fifty megabits down, available to roughly 97 percent of homes and businesses in the four boroughs by the end of 2012. Half a million homes passed and forty thousand businesses. It worked.

~ the record ~

~ the arithmetic ~

About three thousand people bought it. The business plan needed a hundred and eight thousand, and at one point the company was losing a million pounds a month.

The reason is not mysterious once you see the sales channel. Digital Region was wholesale: it owned the network and other companies had to sell the service. Not one of the six major consumer ISPs in Britain signed up to do that. What it got instead was a handful of small resellers, among them Chess Telecom and ASK4, with Origin Broadband carrying around seventy percent of every connection on the network. So a household in Rotherham who wanted fast broadband had to drop a national brand they had heard of in favor of a company they had not, for a product the incumbent was about to match.

Because that is the other half. While Digital Region was spending public money putting cabinets next to Openreach cabinets, BT was rolling out its own fiber to the cabinet across the country, at a scale and a marketing budget no county could answer. By 2013 the thing that made Digital Region special in 2009 was available from the company everyone already paid.

~ what a monopoly looks like from the other side ~

I got broadband at home in Turkey around 2006, on TTNet, and TTNet was not a choice. Türk Telekom owned the copper, TTNet was Türk Telekom's retail arm, and whatever alternative ISP you signed with was reselling the same line at a price the owner of the line had set. People complained about it constantly and switching providers changed almost nothing underneath.

So the South Yorkshire story reads strangely from here. Digital Region is what it looks like when somebody actually builds a second network and the public pays for it, and the result was that the public also paid for the failure, because the incumbent simply built the same capability and had the customers already. There is a decent argument that nothing short of BT moving slower could have saved it, which is not a plan.

~ the day it went dark ~

On 15 August 2013 the shareholders announced a managed closedown. The sums at that point were brutal in both directions: keeping it alive was costed at £95.8 million, and closing it was expected to save the taxpayer around £12.5 million against that. The government department that had helped fund it, Business, Innovation and Skills, pulled out.

The network stayed up for another year while customers were moved off, and it was switched off on 15 August 2014. Most of the resellers that lived on it closed with it. Origin Broadband took on a large share of the customers and went on to become an ISP in its own name. Digital Region's domain, digitalregion.co.uk, resolves today and serves a page about little-known UK driving regulations and car insurance.

The final public cost of unwinding it ran into tens of millions on top of the build. For that money South Yorkshire got five years of fast broadband available to 1.3 million people, of whom about three thousand ever took it.

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