End of term report

I’ve not always been a big fan of Neelie Kroes, largely because of her fondness for consumer-centric views on competition – see, for example, here  and here.  But as Neelie approaches the end of her term in office, even I was taken aback by the venom of Andrew Orlowski’s damning assessment in The Register.  The title of the piece  gives you the general idea: 

“So, farewell then Steelie Neelie: you were worse than useless”.   

Orlowski accuses Kroes of ‘a wide-eyed pandering to fads’ and, as a result of paying too much homage to Silicon Valley, a failure to establish ‘a distinctly European vision’.  There’s certainly some truth in that but I thought the following was unjustified: 

“”If anything Kroes has made progress more difficult by polarising debate and institutionalising stupidity”.

Whatever else she did, Neelie always had her eye on the need for new investment in network infrastructure and she regularly made attempts to understand the obstacles to that (such as her series of ‘round tables’ with European CEOs). Just this week, her Office drew attention to new rules on state aid, aimed at reducing red tape and easing the provision of public support for investment in broadband projects.

 

So, perhaps less effective than she wished but Neelie was consistently well-intentioned.

Waiting for Dido?

Typical! You wait years for a new fibre initiative, then two (three?) come along together.... OK, the old adage may be a bit overworked but I was genuinely pleased to discover this week that the prospect of widespread gigabit networks might have come just a little bit closer.

The exciting news in the UK was of course the announcement by TalkTalk that it wants to extend the fibre network planned for York to reach more than 10m homes.  When news of its York joint venture with Sky and City Fibre first emerged, TalkTalk said it would be followed by at least two other cities but the company now says it wants to enlarge the fibre network substantially.  It apparently plans to do this by launching a national city competition along the lines of the strategy adopted in the US by Google Fibre.  According to Dido Harding, the CEO: 

“We believe the economics of our approach to FTTP could prove highly attractive, with a combination of scale and low cost build technology delivering a significantly lower cost per home passed than for the current FTTC infrastructure.” 

Sceptics have been lining up to pour cold water on the announcement.  They point out that similar claims in the past by CityFibre have come to nothing, or that the trial is really just a negotiating tactic in TalkTalk’s continuing attempts to challenge BT’s wholesale charges.  But I for one refuse not to be encouraged by Ms. Harding’s bold assertion that ‘We have a long term vision to build infrastructure’. 

Elsewhere, the ‘fibre initiatives’ I’ve spotted are a little more obscure.  The first popped up amid the ongoing media consolidation in the US.  There, AT&T has offered a number of commitments to regulators to sweeten the pill of its proposed acquisition of DirecTV, and one of these is to provide broadband access to 15m new customers – including homes outside its existing footprint (partly using fixed wireless technology).  A pious hope, maybe, but perhaps the combination of this US initiative and TalkTalk’s fibre project here will persuade Liberty Global (Virgin Media) to consider new broadband coverage in the UK… 

Finally, I must acknowledge the Labour Party’s new on-line policy and discussion forum, Labour Digital.  Already, a loyal supporter has proposed a ‘national Scheme to deliver 1 Gbps broadband to all’.  Maybe he should speak to Google…

 

 

 

Postscript

I referred in the last posting to the FCC’s proposed new rules on network neutrality.  Predictably, there has been a huge amount of comment and criticism of the proposed new regime but by far the best analysis I’ve seen is quite a short article by Kevin Werbach and Philip Weiser. Its main conclusion is as follows: 

“How to defend and implement network neutrality is not as simple as banning all forms of paid prioritization… What really matters is ensuring that the broadband environment continues to provide space for tomorrow's innovators to develop new, disruptive offerings. When the FCC releases the proposed rules for comment, we should all focus on that criterion to evaluate whether they are sufficient and effective”. 

I thoroughly recommend reading the rest.

Regulator speak

I’m always hesitant to raise the subject of net neutrality here, not because I doubt its huge importance but simply because of the yawns it tends to evoke on this side of the Atlantic. Ofcom has long argued that this lower priority stems from the relatively high levels of retail competition for internet access in European markets – a questionable defence.  But sometimes the subject just can’t be avoided, and Ed Richards felt obliged to tackle it when, in early April, he addressed the (newly-formed) US Chapter of the International Institute of Communications in Washington DC.  Trying hard not to patronise his American audience, he explained the gist of Ofcom’s policy as follows:

“After due consideration, we concluded that there were benefits associated with both the ‘best-efforts’ internet and the provision of managed services… and that one key aim was for a framework which enabled both of these simple concepts to be accommodated… In a sense that does amount to a form of discrimination, but one that is normally efficiency enhancing and ultimately better for consumers.” 

After more warm words about the value of the internet, he ended on this, less than resolute note:

“The internet is an enormously complex and dynamic ecosystem, where the law of unintended consequences looms very large indeed… as we finally move towards a collective view on the matter, it may be that the most apposite adage is “more haste less speed”. 

Speedily or not, the FCC came up with a further modification to its own regulatory prescription on 24^th April and, guess what, it looks remarkably like the Ofcom compromise solution.  Here’s how FCC Chairman, Tom Wheeler, describes the latest proposal (which goes to a vote on 15^th May):

 

“The proposed rule is built to ensure that everyone has access to an Internet that is sufficiently robust to enable consumers to access the content, services and applications they demand, as well as an Internet that offers innovators and edge providers the ability to offer new products and services… If anyone acts to degrade the service for all for the benefit of a few, I intend to use every available power to stop it.” 

So, both regulators envisage a possibly two-speed internet, a ‘form of discrimination’ in Ed Richards’ words, but the best efforts version to be afforded some regulatory protection (and related competition issues to be decided on a case-by-case basis).  Predictably, the net neutrality camp in the US has been howling in protest at the FCC’s intentions.  One of the more articulate critics is Tim Wu, a professor at Columbia Law School.  I happen not to agree with him but this comment of his directly challenges the UK/US regulatory consensus:  

“The new rule gives broadband providers what they’ve wanted for about a decade now: the right to speed up some traffic and degrade others. (With broadband, there is no such thing as accelerating some traffic without degrading other traffic.) … This is what one might call a net-discrimination rule, and, if enacted, it will profoundly change the Internet as a platform for free speech and small-scale innovation.” 

As Ed Richards almost said: “There may be trouble ahead…”