Careful what you wish for

In the whole debate about broadband infrastructure, it’s very seductive to follow the logic of the ‘satisficing’ brigade – those that defend the status quo in bandwidth on the basis that ‘it’s adequate for most peoples’ needs’.  I’m afraid to say that I’ve even heard this kind of argument – several years ago - from senior staff at Ofcom.  You know the sort of thing: “so long as it’s enough to download repeats of ‘Coronation Street’, 2Mbps is fine as a minimum threshold… 

I’m glad to say that even the DCMS has seen the weakness in this argument. Not long before he left the department, Jeremy Hunt made a speech in which he rejected the ‘satisficing’ idea, instead comparing the government’s alleged forward-looking broadband strategy to that of the Victorian planners:

“…When it came to sewers, we got it right. In the 1860’s Sir Joseph Bazalgette ignored all the critics when putting in London’s sewers and insisted on making the pipes six times bigger than anticipated demand.  He could never have predicted the advent of high rise buildings – lifts had not been invented then – but he had the humility to plan for the things he could not predict as well as the ones he could”. 

This has to be the right approach – getting well ahead of the demand curve. It was therefore worrying to see a major ISP, Zen Internet, sending out some mixed messages this week: 

“Over half of premises in the UK can already access FTTC broadband, a solution which avoids disruption and guarantees high performance and reliability. Most organisations don’t need the 330Mbps promised by FTTP, and will find 80Mbps more than enough…” 

On closer reading, Zen’s concern appears to be that, possibly unnecessary FTTP aspirations are suppressing FTTC uptake – quoted at just 18%.  Might this evidence of apparently limited demand have the effect of discouraging subsequent FTTP deployment?  Well that’s a tricky one…

The byte balance

Way back in February, I bemoaned the final death throes of Cable & Wireless – the network’s final incarnation being to provide backhaul capacity for Vodafone.  One of the lessons of this story was that, notwithstanding all the excitement surrounding the emergence of 4G, these new broadband services increasingly come to rely on the availability of high capacity fixed networks for their transmission.  I was reminded of this point by a throw-away fact in Ofcom’s recent update of its Infrastructure Report.  The associated headline for this document is that ‘Ofcom unveils plans to avoid mobile ‘capacity crunch’, and it is mostly concerned with the release of new mobile spectrum.  However, tucked away in Section 7 of the Report is the noteworthy fact that: “460PB of data went through the fixed networks in June 2012 compared to 19PB of data on mobile networks”.  (I didn’t know either but a petabyte (PB) is apparently around one million gigabytes).  So there you have it: on the basis of Ofcom’s June sample, the volume of data flowing on fixed lines is roughly 24-times that of the mobile network.  You heard it here first…

Wacky Racers

As this year ticks by, and 2015 looms ever closer, the race to equip the UK with ‘the best broadband network in Europe’ becomes ever more intense.  BT, as usual, appears to have played it’s cards rather well in the country’s adopted form of public-private partnership;  the company announced last week that its overlay, FTTC network will now reach two-thirds of the country - 19 million homes and businesses - by spring 2014, rather than the former objective of end-2015. In reality, and notwithstanding the efficiency claims of Openreach, the repeated announcements of acceleration in FTTC deployment increasingly suggest that the original commitment was something of a soft target.  Nonetheless, BT can clearly claim to have done its bit to honour the government’s broadband ambition. 

Spare a thought, then for Maria Miller.  She got off to a flying start with her announced sweeping away of the ‘swathe of red tape’ that frustrates broadband planning but her feet were barely under the DCMS table when she was landed with the BBC nightmares resulting from the Jimmy Savile scandal.  So it was perhaps understandable that the Culture Secretary would focus outside Westminster for the causes of any slippage in the public sector’s contribution to broadband goals… Yes, you guessed it: the answer is yet more infuriating red tape, but this time in Brussels.  According to The Telegraph last week, the Culture Secretary “has demanded an urgent meeting with Europe’s Competition Commissioner over EU delays that have seen schemes worth more than £530million held up since January”.  (This diatribe against Brussels mandarins draws a convenient veil over the earlier  ‘evidence of failure’ and ‘sclerotic progress’ within Miller’s own team at BDUK). 

​ Anyone inclined to place bets on the broadband contest should probably wait until the end of the year when, according to the Government response to the House of Lords ‘alternative vision’ Report, Ofcom will publish the first European scorecard.  Exciting times!…

And it came to pass….

More evidence has emerged recently to vindicate critics of the government’s broadband investment strategy. First and as widely predicted, BT looks set to achieve a clean sweep of the funds made available through the BDUK procurement process.  As the House of Lords anticipated in its 'alternative vision' Report:

“There are clear competitive advantages in the market for infrastructure provision which accrue to those able to draw on economies of scale and scope. If unchallenged, these may result in the dominance of a single provider”. 

However, it appears that BT’s dominance in this process has now been both accepted and enshrined. According to a report in ISP Review, the Director of a major media research firm has warned that any UK cities which win government backing to boost their superfast broadband availability must pick “safe bet” BT to do the job or risk being left with “networks based on technologies that failed to keep pace with the wider market or devoid of popular service providers “. 

The related fear expressed by the House of Lords was that government dependence on BT’s own investment strategy, in particular its choice of FTTC as the principal superfast technology, could restrict service competition.  Again, ISP Review has picked up on this issue and reports that the same fears are now being voiced more widely:

‘At present the dominant form of superfast broadband delivery on BT’s national UK telecoms network is FTTC, which at best only offers a somewhat restrictive form of virtual unbundling known as VULA. Sadly this doesn’t provide the same level of price, direct control or flexibility as copper LLU services, which is technically difficult to achieve on fibre’. 

ISP Review goes on to record that ‘the CEO of budget ISP TalkTalk, Dido Harding, has warned a Westminster panel session that the UK government should “start to worry” about the lack of competition in the new market for fibre optic based superfast broadband services…Harding added that she had no idea whether TalkTalk was paying a good price for superfast broadband from BT.

"I simply don't know, but there's also no alternative," she said. "Over time, as we consume more of it, I should know and so should Ofcom."

 
So far, full marks to BT!