The community built and funded rural UK ISP B4RN, which has been rolling out a 1Gbps capable Fibre-to-the-Home (FTTH) broadband network to remote parts of Cheshire, Cumbria, Essex, Lancashire, Norfolk, Suffolk and Yorkshire, has launched a crowdfunding drive in the hope of raising £3m to help it expand.
At present B4RN has deployed over 3,000km of optical fibre cable and they’ve connected well over 5,000 premises (live customers) to their network since starting their roll-out in 2012. The majority of the network to date has been funded by local residents investing over £5 million in shares in the company and many of those have done this as part of helping to physically build the infrastructure.
On top of that lots of rural land owners (often farmers) have supported the cause by agreeing to waive their right to payment under a wayleave (access) agreement. Meanwhile any money the service makes is generally reinvested back into their network and used to further improve coverage or connect local schools for free etc.
All of this was working well until recently, when the Government suddenly removed their tax breaks following changes to the Enterprise Investment Scheme (EIS). This came after HMRC deemed their model to be “fundamentally uncommercial” and thus no longer eligible for such benefits (here and here).
As B4RN’s CEO, Barry Ford, told us at the time: “If landowners are going to agree to laying ducts across their fields and waiving any wayleave charges they have to be convinced it’s a community project and no one is going to make any money. The HMRC ruling means that this structure cannot be used if EIS is needed (and 30% tax relief is a big incentive).”
The outcome threatened to slow B4RN’s pace of deployment, but adaptability is the spice of life and the provider has now setup a new crowdfunding drive via Triodos Bank (here). The effort aims to raise £3 million within the next 70 days (i.e. a minimum of £1m and maximum capital raise of £5m is being sought) on a 7 year term, with interest of 4.5% per year being promised.
Barry Forde, B4RN CEO, said:
“Insufficient and slow broadband is a significant issue in rural UK communities, especially where livelihoods depend on operating effectively online. This bond will enable us to expand our gigabit capable network and bring our service to more underserved rural communities.
We are a community business owned by our 2,500 members. Our community approach is the key to our success as we can install a state-of-the-art network for much lower cost than commercial providers. This investment will help to ensure rural UK communities are no longer the poor relation when it comes to broadband.”
As ever with such initiatives the crowdfunding page warns that repayment is due on 30th April 2026 “but is not guaranteed” and the minimum investment allowed is £50. If less than £1 million is raised by 30th April 2019, the monies will be returned to investors with no accrued interest.
The move is certainly an interesting one for a socially structured ISP, where profits are generally reinvested back into the communities they serve, but it could represent a useful way for B4RN to continue expanding at their current pace.
At present the communities that B4RN target are still required to raise up to 50% of the installation cost of the network through shares before they can start working in the area, but the provider still needs money to ensure they can close the funding gap in order to start a build. By comparison, vouchers from the Government will only go so far and can’t be used everywhere.