Official Report 243KB pdf
Good afternoon, ladies and gentlemen, and welcome to the ninth meeting of the Enterprise and Culture Committee this year. I have received apologies from Jamie Stone and Christine May, and Richard Baker has said that he will be slightly late.
Convener, before we start, I ought to declare an interest. Castlemilk Economic Development Agency is in my constituency and I have fairly regular contact with it.
Okay, but I suspect that that is not a registrable interest.
I see benefits in how organisations in Castlemilk are making progress in their use of technology, and I see benefits in how that technology is used to provide services to the local community. For example, a small business called Red Hot Comics provides a mail-order service using e-commerce. Putting in broadband has enabled that business to provide a more efficient service to its customers. Compared with broadband, dial-up offers slow internet access. Broadband can meet customers' needs more effectively.
I am still struggling to see how that would make a significant difference to the economy of the area. Perhaps I am looking for too much in that respect and we are talking about only small improvements.
At this stage in the game, it is too early to say. Many organisations are just beginning to dabble in broadband technologies and will evaluate service delivery by using the technology over the course of a year or two to demonstrate it and see if it is having a significant impact on the economy. That might be something to keep a watchful eye on. At this stage, because many of the organisations are just beginning to use the technology, it is a wee bit too early to see how much of an impact it is really making.
I pick you up on one of the words you used. You said that organisations are beginning to "dabble" with the technology. Is that the most sensible approach? Might a more structured approach deliver better dividends?
Sure. Small businesses with two or three members of staff might prefer to take a more informal approach to get to know what the technology can do before they use it in a structured way. For example, I have used laptops to train people in what broadband can do, give them an overview and then start them on using the technology. That is not intended to give them an economic result in terms of how the organisations deliver their services; it is to get the members of staff used to using the technology.
BRAG Enterprises—the Benarty regeneration action group—runs a business and community learning centre, and it is a small business in its own right.
I will ask about the practical use of broadband. You say that in Castlemilk a number of community organisations and businesses are using broadband, but what are they using it for? Is it part of the great development of websites, and what are they using them for? Are they using them to market their goods and services? Has that made any difference to their businesses? Alternatively, are they using broadband to deliver training to their employees or to attract new employees?
Broadband is mainly used for the internet per se. Many of the social economy organisations rely on research for funding. If you are researching and downloading applications using narrowband, it can take an age and a day. Using broadband, multiple staff members can research and download, which is a lot more effective. Increasingly, our organisations are looking at online learning. CEDA is a learndirect Scotland learning centre, and promotes learning services throughout the community through an e-mail newsgroup.
Is there much domestic access to broadband within the target area?
Are you talking about public access or residential access?
I am not talking just about having the opportunity to come along to the local project and make use of its broadband, but about whether many individuals have subscribed to broadband. If you are targeting a market and using high-speed, all-singing, all-dancing websites, and the target audience is still on modems, or not on the internet at all, that will be of limited value.
Yes. Many organisations are just beginning to get to grips with broadband technology. They are using it in different ways, for example to design websites and promote their services online. Our customers have yet to generate much feedback on whether the service is really working and providing a beneficial service to our client groups.
So you both argue that the extension of broadband would be helpful in delivering lifelong learning, in particular to deprived communities, provided they have access. It is not just a question of the businesses and projects having access, because surely the target market must also have access.
Absolutely. Public internet access points are dotted about Castlemilk. We are fortunate that we are on an ADSL network, so we can provide broadband services. More and more public internet access services are encouraging distance learning opportunities, whether through BBC WebWise, learndirect or the college, so the broadband infrastructure can be used to enable communities to access lifelong learning opportunities.
Have you had any feedback from people who are still using dial-up modems, who have said, "You have far too much on your system. I can't cope. It is taking me an hour and a half to download just the logo"?
Absolutely. There are extremes. Some organisations continue to use just dial-up, and they see no benefit in moving to broadband. They are quite happy to send their two or three e-mails a day, and that does them; it is the way they work. They cannot justify paying a fixed-rate fee each month for broadband, because they are not using the internet enough. It is different strokes for different folks. The technology is being used by some small businesses and by community organisations. They are getting to grips with it and are working in different ways to deliver services, for example through websites.
Obviously, Glenrothes College supports activities other than education, but on education, how easy do students find it to access material if they do not have broadband, either because they cannot afford it or because it is not directly available?
That question raises wider technology issues about secure access to the website. We have a VLE—a virtual learning environment—in the college network, within which students can access securely a range of learning materials. At present, students cannot log in remotely to access that material.
From listening to the witnesses and reading their submissions, I am struck by the fact that, unsurprisingly, a number of the issues on which they touch are generic and have been raised by a range of people from different places. However, some aspects of what they are involved in—particularly Paul Cassidy and his organisation—are specific to the needs of communities, groups and individuals who might be regarded as excluded, to use the jargon. I would like to explore that latter bundle of issues. I am not terribly comfortable with the jargon, but I am interested in issues that come under the umbrella of the digital inclusion agenda. I would like the witnesses to try to home in on where they think broadband fits, analytically and practically, in that agenda, as distinct from the need to close the digital divide more generally. My question builds on points that other members have touched on.
That is a complicated question. Broadband has a role in communities throughout Scotland, for example in providing community access to lifelong learning or in promoting business development through e-commerce or in promoting e-empowerment. As more and more Government services come online, people will need to have access to broadband technology. To use learndirect Scotland as an example, if a person is working through an online learning course with a modem and finds that a task that is meant to take five minutes to complete takes an hour and a half, they will lose interest in the technology altogether. Society is becoming faster paced. Broadband technology allows us to keep in touch and informed, through e-mail or the internet.
In your experience, has what we recognise as the digital divide shifted at all? I am not asking you to back up what you say with a pile of statistics—unless you want to do that—just to give me your practical view of the issue. I understand that the term "digital divide" was coined to illustrate the distinction between those who had access to ICT and those who did not. Are there different divides nowadays or is the issue more about the type of technology that people have access to?
I think that there is a digital divide. There are people who want to use the technology and who will actively go out and use their community website, community access points or learning centres. They might then go out and buy a personal computer and install broadband in their households. There are other people who need our support: we can raise their awareness, tell them about the benefits and yet they will not bother to take it up.
Although I am happy to move on if you ask me to, convener, I want to tease out the issue a little further. I am playing devil's advocate with this question. In the social circumstances that we are talking about, is there a danger that, if we put a lot of time, energy and effort into pushing forward the boundaries of the range of available technology, we could increase the divide? I am thinking of the number of people who are not even at first base.
Sure. There is also the social divide. Are people going to use the cafés to interact and communicate or are they just going to e-mail one another and get involved in videoconferencing and posting messages on website message boards? We have to take on board all those issues when we consider the use of broadband, particularly at community level. What we are trying to do is roll out the infrastructure in community venues that are well used. We are trying to give people a face-to-face interaction.
I have two questions, the first of which will not detain us for very long, I think. I understand that the second panel includes people from rural communities. Some of the evidence that we have received goes along the lines of, "Broadband is very important for rural Scotland in particular because of the need to develop teleworking." People in rural and remote areas need to be able to work from home and so forth. Is it your contention that it is as important for urban Scotland to have broadband access as it is for our remote and rural areas? I imagine that that is the case, but it would be helpful if you could back up that supposition with evidence.
I do not see why we should exclude one or the other: everybody is equal and all of us—whether we work in a rural village or a city centre—are entitled to access services online or by e-mail. I believe that everybody should be able to access the technology if they want it.
It could be argued that there should be a greater focus on intervention by means of agency support in rural communities, simply because the market in urban communities will look after itself to some extent in respect of the roll-out of ADSL. If a mass of people are willing to take it on, roll-out will happen, whereas people in rural communities will struggle for it. Perhaps there should be more focus on intervention in such communities, but it is just as important in both communities.
You make a good point about intervention, which leads me to my second question. We have heard from other witnesses, and we accept that some Government intervention is probably required to try to enable access to broadband for the whole of Scotland, if that is deemed a desirable objective. How valuable is broadband to business, compared to, for example, money being invested in better transport infrastructure or better skills and training? We all know that Governments have a finite amount of money to spend on such projects and business support. Is broadband as important, more important or less important than those things?
I suppose that that depends on the business that one is in. For some businesses, it is certainly as important, if not more important, for money to be spent on broadband and the training that goes with it, or the training that it can enable, which is essential. Broadband is essential for communities that, given their rural nature, already have difficulties with a whole range of other services. Those communities will be further disadvantaged if they do not have access to broadband.
Does what you say apply more to rural communities or urban communities?
To rural communities.
I back up what has been said. In urban communities, the importance of broadband depends on the type of organisation. Small businesses will not make best use of the technology. In general, in our business park in Castlemilk, small businesses have from two to five individuals and a computer with a dial-up connection. Most of the time, people are out on site, earning the bucks. It is difficult to justify broadband or to ask whether we should spend money on broadband or transport.
I have a joint question and then specific questions for each visitor. What seems to be common to the Castemilk and Glenrothes examples is that communities have been chosen in which there are high levels of disadvantage, and there has been an attempt to use broadband as a means of helping people to help themselves. Paul Cassidy outlined quite well how that works in Castlemilk. I ask Mark Cullens how that approach has worked in the area of Fife that BRAG covers. Do the points that Paul Cassidy made also apply to Fife?
In short, yes. BRAG has been in Lochgelly and a string of former mining villages. We try to provide access to the business centre tenants, which is a new initiative. Wireless networks are used in the business centre to demonstrate what the technology can do—people can roam around the centre using laptops and so on. The project and the internet cafe in particular have made a huge difference.
In arguing for the extension of broadband, a useful tool is to show what life is like without it and what the immediate benefits are. Do the witnesses take the view that their communities would be significantly restricted if they did not have broadband, in terms of the work of local community organisations, both voluntary sector organisations and small businesses?
That is certainly true of Castlemilk. My experience of dealing with such organisations is that many of them would lag behind in skills if they could not use distance learning to develop their ICT skills or increase their general awareness through using websites and e-mail bulletins. The skills gap is the big issue. Mark Cullens mentioned media-rich online learning materials. If people are using dial-up connections, they can forget about accessing the vast majority of content that I have used through the learndirect website. The ICT skills gap facing many staff in the voluntary sector and in small businesses in Castlemilk is still a big issue.
Learning and skills are the areas that suffer most if one does not have access to broadband. I would like to touch quickly on the use of technology in the future, particularly in adult literacy—we all know that there are huge issues with that in Scotland. Adult literacy and games technology in the learning environment are the two most exciting areas in which to engage with a range of people, including young people, who will not engage with traditional learning techniques. One needs to have broadband to access games technologies and multimedia technologies, and that will be particularly true in the future.
At the end of his paper, Paul Cassidy says:
There has been an uptake in Castlemilk, but there is still a lot of work to be done to help organisations to get the most out of the technology, whether they use the internet to access information or to fill in online learning applications or funding applications. For small businesses, is broadband just a tool for developing websites and looking at e-commerce? There is still a lot of work to be done to educate such organisations to make them aware of the opportunities and what broadband technology can do for them.
So the issue is not necessarily about taking the first step but about maximising the use of broadband.
Yes. It is evident that the organisations are beginning to embrace the technology. Three years ago, the vast majority of voluntary organisations would not have thought about putting in a network. Now, networks are going in and websites are going up—the whole mindset is changing.
You are exactly right to say that the next challenge is the use of technology rather than just getting it. Glenrothes College has a mobile learning initiative bus—known as MOLI—which has been instrumental in going around rural exchanges, drumming up interest and promoting the use of broadband. A particular example, which is given in the paper, is that within a fortnight of its visit to the village of Ceres in Fife, the village hit its trigger level. That is a good-news story, but the next part of the story is that after MOLI has visited a local community and demonstrated the use of broadband, the take-up is often higher, in terms of exchanges that are enabled, because people have seen its benefits being demonstrated. They have seen the websites from which one gets the most use of and the most benefit from broadband access. The future for MOLI, beyond converting exchanges, is to demonstrate the benefits to businesses and to say, "Okay, you've now got broadband. Let's look at how you can use that most efficiently." If they would like to do their banking on line, for instance, we can show them how to do it securely. If they want to develop a website, we can show them how to do that. The next challenge is to maximise the benefit.
The mobile learning initiative is an interesting project. How did you get the Scotland-wide remit for that? There must be plenty to do in Fife, but you have obviously extended well beyond that.
It is a partnership with Scottish Enterprise national and local partners, and is funded through the European Equal programme. We operate the vehicle on behalf of Scotland.
We heard evidence last week about the triggers and the operating base, particularly in rural areas, so there is still a bit of work for you to accomplish.
One issue that I would like to pick up again relates to the Glenrothes College evidence about BRAG. You were quite well down the way towards beginning to develop a wireless broadband system when British Telecommunications decided to jump in and do the same. What was your reaction to that? Were you gratified that your pressure had stimulated BT into providing it, or were you a bit hacked off that you had done all the work just to be gazumped near the finishing post?
It depended on the time of day, to be honest with you. Initially, I was particularly unhappy because we had done a lot of our own research, gone through some training and bought some initial test kit, and then BT said that it was going to test its system. BT was only going to do a test—a three-month pilot—and it selected two exchanges, one in Ballingry and one down in Wales, from thousands of exchanges. I could not honestly say how it decided on the Ballingry exchange.
That was going to be my next question. Why, out of all the exchanges in Scotland, did it have to select Ballingry, which is the one that your area covers?
That is an excellent question, but it is one for BT.
We may come to that. Was BT aware of what you were going through?
Yes. We set up a similar registration scheme to BT's, whereby we invited the local community to pre-register with us so that we would have our own trigger point and it would be worth buying the kit and ordering up the backhaul for the main part of the internet, or making leased-line arrangements. We had just about hit that trigger when BT said that it was going to test the new technology out on that exchange. Perhaps we acted to some extent as a pressure point and triggered—
So BT was aware of what you were doing.
Yes. It was in the public domain.
There are no further questions, so I thank Mr Cassidy and Mr Cullens for their evidence.
The Scottish estates business group represents the progressive business estates, predominantly rurally based. It promotes good practice, circulates new ideas and represents estates to business and other groups.
I am a chartered structural engineer and provide engineering services to various types of development, especially rural architects. I am now more widely based, with the benefit of broadband internet access.
Plexus Media is a small media company based in Cromarty in the Highlands. We specialise in creating web-based software, websites and other media elements.
My first question is addressed primarily to the representative of the Scottish estates business group, but all the witnesses may have an opinion on the matter.
Few businesses that currently operate in the countryside do so very profitably. There is poor trading performance in, and poor markets for, most of the traditional rural enterprises, so redistribution of support might mean robbing Peter to pay Paul. However, I agree completely that money to support the countryside must be used to best effect. For that to happen, one would hope and expect that a slightly wider overview will taken of the greater good and of strategic objectives for the rural economy, post CAP reform and changes in forestry businesses and working methods generally. I agree cautiously that there may be an opportunity to consider ways in which support is provided to the Scottish rural economy, but no one should be of the opinion that an awful lot of money that is currently given to the agriculture sector is spare to be given elsewhere. However, that may be a prejudiced view.
There is a worry that the roll-out of broadband technology could be done piecemeal by taking resources from different pots. It is far too important for that. I am worried about where the money will come from.
I have nothing to add to what has been said.
In its submission, Plexus Media indicates that it previously used other forms of connectivity and that it had an ISDN line before moving to ADSL. In the case of Plexus Media, will broadband be insufficient in the near or foreseeable future?
That is a very good question. Over the past few years, we have witnessed that technology is always changing. As a nation—and probably as a world—we must get used to the fact that it will change from now on. We are no longer dealing with change over periods of four or five years—we should keep an eye on the situation all the time. The issue is too important for us to think that if we solve a problem one year, that solution will do for 10 years. Those days are gone.
Do the rest of you think that it would be great just to have broadband, and that you will worry about the other technologies when they arrive?
Possibly not, unless I have misunderstood the question. I agree with David Newman that if we focus simply on the current or next phase of broadband connectivity we will be in the same situation in five years' time. It is possible that in the countryside competitive markets will never be as efficient as they are in urban centres. We need a strategic overview so that options and agendas for solving today's problems also take the next step into account.
I want to ask about the move between the different technologies. Plexus Media's paper says that, "due to latency problems", you decided that satellite was not appropriate for the kind of work that you do. Can you spell out in a little more detail what those latency problems were? Will such problems have wider implications, affecting more than just the media business?
The problems do not affect other businesses in the same way as they affect us. In our case, we are constantly moving large numbers of files around. Having proper ADSL coverage, or a proper broadband connection, enables us to do that very easily. The problem with satellite is that packets of information are sent up and then down again, which disrupts and somehow corrupts the signal. Even I am not sure of the exact technicalities, but it causes major problems for companies such as ours. I believe that people who use satellite systems sometimes have problems with online banking and things like that. People should be aware of those issues.
The problem is not unique to satellite; all these systems fall over from time to time. That will always be a problem.
We were very impressed by the quality and quantity of information produced by Scottish Enterprise for the event that was held a couple of weeks ago. Even though we had been working very closely with Scottish Enterprise in developing the event, it was still an eye-opener for most of us who attended that the technologies, and even the availability of services, were far more developed for the extension of ADSL beyond enabled exchanges than we were previously aware. The price was also reasonably affordable, given a reasonable local demand.
It is fair to say that a number of the alternative proposals are perhaps aspirational. Some of them are at the pilot stage. However, as yet there is no evidence that they will have the widespread availability of the current BT arrangements.
Yes. In response to your last statement, I would say that an element of that work needs to be borne by developers, but if that element were too significant, it would become commercially unviable and there would be stagnation. It is an undeniable reality of the countryside that a lot of opportunity is missed simply because of the additional cost that any development faces outside urban centres. Many good things do not happen in the countryside because not enough forethought is given to reaching objectives—or a view is taken that is not wide enough. People often look at things through telescopic lenses rather than globally.
Do you agree that there are some practical difficulties with that? Some rural areas will set aside only enough land for a small factory. Are you saying that whoever takes on such development will have to deliver what might be a unique connectivity solution for that particular piece of land before they are granted planning permission?
No—it is a question of horses for courses. A small piece of land in a fairly remote area might not be the right place to put a hi-tech industry point. However, the structure plan and the local plan will identify more appropriate areas where the potential warrants investment. I am led to believe that the use of fibre optic cabling will produce long-term benefits that will possibly lead to the development of technology over quite a significant period of time. That investment by the private and public sector might well be the long-term planning investment that some areas of the countryside need to deal with regeneration and redevelopment. That was the case at the Crichton centre in Dumfries. Regeneration and redevelopment are desperately needed in some cases and might be needed more after the effects of CAP reform kick in during the next few years.
I will ask Mr Armstrong about the pilot scheme that his paper says was launched in June 2002. The paper does not suggest that the pilot is complete. What is its status? Has it been rolled out further than Crieff and Campbeltown?
I do not know the status of the trial. I have not had a part in running it; it is run by the telecoms arm of Scottish and Southern Energy. The trial in Crieff is complete and was regarded as a success. The scheme has moved on to a commercial phase and commercial trials have been run in Stonehaven. I do not know how far the company has gone in other areas. The committee would have to speak to the company about that.
I would like to respond, but Brian Adam has a follow-up point.
You suggested that broadband has made a big difference to your business. You often deal with rural architectural practices and send them drawings. You now have the capacity to send information, which is fine, but what proportion of your customers have the capacity to receive it? As I said to the previous group of witnesses, if you have lots of big gizmos, your customers will not sit to wait to receive them, or their system will fall over. How useful is broadband to your customers?
That is a good question. In the conclusion to my paper, I said that if Alexander Graham Bell had been the only man with a telephone, he would have been a lonely soul. I say to the Scottish Executive, "Go forth and ensure that as many people as possible have broadband."
I am interested in the extent to which ADAC and Plexus have benefited, not only from the pilot study that involved ADAC, but from the fact that Plexus was the first company in its area to have wireless broadband. Without the two initiatives in that region, would the two companies now be connected to broadband?
No, absolutely not.
No.
The Plexus paper states that BT initially said that Plexus would not be connected through ADSL, although it has changed its position. We received evidence to that effect last week. Does Mr Newman know of other businesses that have put pressure on BT, having received a negative reply in the first instance? Is there evidence that small companies such as Plexus have worked together to apply such pressure?
Yes. Plexus has been involved in arguing for better technology for years. I participate in a group of technology-based companies from all parts of Ross-shire, from the west coast to the east coast. Some of the companies in the group are experiencing the same problems at present. They are trying to put pressure on and are hoping to get help from the enterprise company. The various forms of assistance that they receive from time to time have been absolutely invaluable to them, as they were to us.
I was not aware of power line communications before now. Mr Armstrong's submission states:
Yes, there is a reason. I will explain how the system works, to the best of my understanding. It will be a crude explanation, as I do not have an IT background.
Thank you. That explanation from a non-IT person was very helpful for another non-IT person such as me.
Murdo Fraser will ask the next question.
Mike Watson has rather stolen my thunder and has asked Mr Armstrong all the questions that I was going to ask. As I have nothing to add to what has just been said, I will happily pass to someone else.
In his submission, Angus Armstrong mentions that a symmetric digital subscriber line delivers broadband to the substation. Is the quality of service received from that any better than the service that would be received from an ADSL broadband service?
I have absolutely no idea. I have not been able to compare the two systems.
We will ask Scottish and Southern Energy about that. Chris Ballance is next.
I find myself in a similar position to that of Murdo Fraser, in that most of my questions have already been asked. However, I have one small question. Have any of the businesses that the three witnesses represent costed the benefits of broadband? For example, have you ever worked out the ratio of the financial benefit that you gain from broadband to its cost per annum?
Since we got broadband, our business has completely transformed over the past year. I know from looking at our figures prior to the end of the financial year that we have done considerably well this year. I can put an awful lot of that down to being able to work more efficiently.
Is everything a benefit? After all, we have heard of technologies that have changed one's way of working, but businesses have had to run to keep up with those technologies and to be able to utilise their benefits fully.
A moment ago, I talked about the way in which we work and play. Indeed, I was thinking about this matter on the train on my way to the meeting. I am sure that I speak for my colleagues at Plexus when I say that we all enjoy coming to work in the morning. In addition, we do things throughout the day that we would not have done before. My partner and I are both film fanatics and while we work we swap questions about, for example, bit-part players in certain movies. While one hand is working, the other is trying to find out the answer from Google. It is interesting. I like the interaction that broadband has led to. The way we work is very different from how we worked before.
I will add to that from a slightly different perspective, although largely I agree with Dave Newman. Broadband makes business in the rural community more viable. I think that it was Alasdair Morgan who asked the previous panel whether it was just a case of grabbing hold of the latest technology. I do not disagree that there is a danger of that but, if someone is looking for a person with whom to do business, an ability to project a positive, up-to-date, modern image will help in securing the work. Securing work in the rural environment is difficult enough, because it is hard to convince people who are 50 miles away—perhaps even people from the town—that they can get just as good a service from a rural company as they can get in town. If I did not have a telephone, I am damn sure that such people would not do business with me. These days, it is not an optional tool. Having broadband capability gives a business in the town an edge; a rural company without such a capability is made to resemble the country cousin, with the result that it might not be able to convince people that it can do the same job for them as the business in town can.
Paragraph 6 of Mr Bruce Wootton's submission includes the comment:
Okay. Such a model can work in situations in which there is an enacted exchange that extends out of the central village for nearly 4 miles and which covers a proportion of the exchange's business users—although not all of them by any means. Crieff has dealt with that by extending the service through the power lines. Such a set-up can cover the same sort of distance as an enacted exchange.
Is that beginning to happen already?
It is happening in the Borders quite a lot. The matter depends on whether further exchanges are rolled out. A huge number of exchanges have come online in the past year and, if more come online, that will reduce the number of situations in which the wireless option is sensible. However, some wireless systems exist and the more models are rolled out and the more service providers come online to provide competition, the more viable wireless systems will be. From what we have been told about some of the existing pilot projects, the capital costs are not terribly excessive when compared with the other options.
As there are no more questions, I thank the witnesses for their evidence.