Crisis….what crisis?

I wrote recently about the ‘Connecting Europe Facility’, previously earmarked for the subsidy of new broadband networks, and the news that this source of European largesse had been more or less wiped out by enforced EU budget cuts,  I was rather surprised to see that what I saw as a passing reference was cited in so many subsequent articles – as if the Brussels fund was the only and last source of broadband investment.  I have since noticed that, on the contrary, there is still plenty of money being ploughed into the networks of tomorrow.  The EU itself has reportedly set aside €700 million in grants over the next five years to develop so-called ‘5G’ wireless technologies; perhaps more surprisingly, the (relatively) new French government appears to have pledged £17bn for deployment of a national superfast broadband network.

These developments may bring little cheer to aspiring communities in the UK’s ‘final third’ but the good news has to be that, whatever its form, the importance of new investment in Europe’s digital infrastructure has at least been fully recognised.

Comfort crumbs

There’s been much moaning and gnashing of teeth this week because EU budget cuts have slashed the Connecting Europe Facility (CEF), some €9.2 billion of which was previously earmarked for subsidising superfast broadband networks in member states.  No one likes to lose a potential hand-out but I do wonder whether largesse from Brussels is the best funding model for the UK’s broadband development.  For similar reasons, I’ve always had some reservations about the abstract performance targets set by the Digital Agenda. 

This touches on a difficult debate: should broadband provision be driven by what’s technically possible or by what’s envisaged from current needs? In the language of elementary economics, are we talking about ‘supply-push’ or ‘demand-pull’?  I freely admit that I’ve long been an advocate of the former: let’s build networks now that are resilient enough to cope with unforeseen demand. But there’s a good argument, too, for linking broadband objectives to some kind of long-term view of the type of network provision that makes sense as an aspiration for the market in question.  This was a central argument put forward in last year’s report by the House of Lords Select Committee on Communication, ‘Broadband for all - an alternative vision’: 

“In this report, we propose an alternative vision for UK broadband policy, which, rather than being target driven, makes the case for a national broadband network which should be regarded as a fundamental strategic asset, to which different people can connect in different ways according to their needs and demands”. 

Is there a risk that this ambition of ‘knowing where we’re going’ might be harder to maintain if both the performance metrics (targeted download speeds) and network funding (subsidies) originate outside the UK?  Or am I just making the best of bad news?

The right knight?

Fascinating to see reports that Liberty Global, the US-based cable company, may be about to bid for Virgin Media.  Having swallowed all its UK counterparts to become this country’s sole cable operator, Virgin seemed to lose some of its testosterone.  While it may be winning on the technology front, it often seems that Virgin fails to punch its weight in other battles – either against its formidable rivals, BT and Sky, or against some of the dafter ideas of the industry regulator.  Liberty’s chairman, John Malone, is well known for being a feisty character, not least in his former confrontations with Rupert Murdoch.  He just might be the man to help raise Virgin’s game.