Friday, July 26, 2013

Municipal Broadband Sometimes is Not a Good Idea

Digital Region Limited was set up in 2006 by "Yorkshire Forward" and four south Yorkshire local authorities--Sheffield city council and Barnsley, Doncaster and Rotherham--for the purpose of providing Internet access in the area.

The intent was to provide access to about 20 percent of households, or about 108,000 people. The project has cost almost £100 million. 

But Digital Region has managed to sign up just 3,000 customers, and spends about £10 million each year serving those 3,000 customers.

Some might say there was little demand for Digital Region's services.

The area already was served by Virgin Media, where adoption of Virgin Media access services was about 75 percent.

Those customers had access to 30 Mbps speeds at competitive prices. 

Digital Region was supposed to use fiber to the curb to provide faster speeds, but wound up delivering just 16 Mbps or so. 

Demand matters, even when intentions are good. 

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