Brightening the gloom…

The current financial press is of course full of recessionary woes, this week’s news about the likely demise of Blockbuster just the latest in a series of blows to the UK High Street.  Sooner or later, this chill to the retail sector is bound to have an effect on upstream investment, not least in the telecoms sector.  This may be the explanation behind the recent story in 'Wired' magazine that Verizon and AT&T have apparently suspended their investment in deployment of new fibre networks.  Interestingly, the same source contrasts these moves with the continued network expansion by Google:

“..Google saves money on its deployments in various ways, such as piggybacking on existing power line infrastructure and building its own network gear.  [Also] by encouraging people who want home service to get their neighbors to sign-up in advance, lowering the risk of deploying to a particular neighbourhood…”

 

It’s good to hear that these cost-saving ideas, well rehearsed on this side of the Atlantic, have been successfully put into practice. On the revenue side, financial prospects would no doubt be further enhanced if ISPs were free to offer tiered levels of internet service, the sort of customer segmentation widely seen in other retail markets.  Hitherto, many have assumed that regulators would not permit this sort of pricing freedom, judging it to be contrary to the celebrated principles of 'net neutrality'.  There was therefore considerable surprise this week when Neelie Kroes, no less, appeared to challenge that assumption.  Writing in the French newspaper, Libération, she is reported as saying that telecoms providers should be able to sell access to the internet at varying speeds and with differing download limits. Because this appeared to represent a change in the Digital Commissioner’s stance, her official spokesman later clarified these statements:

 

"Neelie Kroes supports people having real choice over their internet subscription. That absolutely includes a right to choose full internet service, but if an operator wants to sell you a basic package for a lower cost, and you want to choose that because it suits your needs or if you have a limited budget, then what is the problem with that?” 

So, a glimmer of light…

 

Christmas list from Ofcom

“In many ways, infrastructure underpins the other elements of the value chain – it enables content and service delivery and as convergence continues it is increasingly relevant to a wider range of devices…” 

It’s so refreshing to read these words, particularly when they come from the industry regulator.  Ofcom’s draft Annual Plan, for 2013/14, published just before Christmas, includes this statement in its commentary on the continuing evolution of the communications environment.  As in previous years, however, Ofcom remains reticent about its precise role in the development of the country’s broadband networks - it is not until the document’s focus on ‘emerging issues’ that we find the following: 

“Another potential work area may be to continue to advise or to provide our expertise to the Government in meeting its targets for UK broadband and superfast broadband coverage”

If Ofcom seems a trifle lukewarm about this potential involvement, I was nonetheless gratified to read that it anticipates doing more in relation to the resilience of our public networks:

“To date our activity has focussed on ensuring that the largest communications providers can demonstrably follow industry best practice. However, as communications services become increasingly important to consumers, citizens and the economy, there may be increasing calls for Ofcom to adopt a more proactive role, beyond our regular infrastructure reports, in securing a resilient critical national infrastructure”

This heightened awareness of network security is well taken: as the ‘Digital Britain’ report noted in 2009: “sudden removal of communications would not only bring business and commerce to a halt, but also our traffic, public services, finance, energy supply and much of our personal interaction.”

Happy New Year, Mr Vaizey

Not for the first time, Telecom Pete finds himself behind the times.  My fascination with the idea of 'the redundant telco' and the rivalry with local authorities to provide ultra-fast broadband access turns out to be an old story in the US.  By way of example Susan Crawford, well-known advocate of the ‘local access as public utility’ school, tells the tale of the struggle to establish a municipal fibre network in Lafayette, Louisiana:

“Push-back from the local telephone company, BellSouth Corp., and the local cable company, Cox Communications Inc., was immediate. They tried to get laws passed to stop the network, sued the city, even forced the town to hold a referendum on the project - in which the people voted 62 per cent in favour. Finally, in February 2007, after five civil lawsuits, the Louisiana Supreme Court voted, 7-0, to allow the network….” 

The conclusion Crawford draws from this and similar experiences is perhaps predictable: 

“All Americans need high-speed access, just as they need clean water, clean air and electricity. But they have allowed a naive belief in the power and beneficence of the free market to cloud their vision”. 

Not sure I totally buy the ‘naïve belief’ accusation but there’s certainly something here to trouble our own government’s thinking on broadband development.  Discuss.