The case for smarter pipes

There’s been wide coverage lately of the spate of system failures affecting major internet companies.  For example, in last week's Guardian: 

“A series of system crashes affecting Google, Amazon, Apple and Microsoft in the past fortnight has brought warnings that governments, banks and big business are over-reliant on computer networks that have become too complex”.

The reporting has conveyed an unmistakable feeling that ‘the sky is falling’ on these complex internet traders. 

"The complexity of the systems created to support big data is beyond the understanding of a single person and they also fail in ways that are beyond the comprehension of a single person."

The idea that we may have created Frankenstein systems that are more complex than we know how to deal with is, indeed, a little scary.  But human frailty explains only a limited part of the recent malfunctions. Again, from The Guardian:

“While a malicious attack [on the New York Times] was initially suspected, the problem was caused simply by a scheduled system maintenance… On the same day, Microsoft customers began to report email failures. The outage was traced to problems with the Exchange ActiveSync service which serves email to many of the world's smartphones…”. 

The problem of man’s inability to manage the complexity of his own data constructs, such as high volume securities trading, is ultimately a matter for mathematicians - and maybe even philosophers.  But the robustness of data networks, the so-called ‘dumb pipes’ of internet commerce, is a matter that ordinary mortals can and should address.  Sadly, however, both government and industry have paid insufficient attention to the issue of communications infrastructure policy. Establishing a suitable policy for the UK is not only important for economic growth but, equally, to guard against the economic harm that can be – and now is being - caused by disruptions to that infrastructure.

All aboard for the Ministry of Truth

I return from holiday unsure whether I’ve really been in deepest Sussex or whether I’ve emerged into a regulatory time warp.  I dimly remember headlines in 2006 announcing Viviane Reding’s ambitions for a single EU telecoms regulator to replace the (then) 25 NRAs.  Seven years on, I see that the same European ambition has been advocated, this time by Joaquín Almunia, the EU's antitrust commissioner.  Apparently, he has been critical of the plans put forward by Neelie Kroes earlier this summer for a single market in EU telecoms.  She said then that a new EU telecoms package would be put forward in early September in a bid to ‘make it easier to run a network across borders, with better interconnections and new access products’.  However, Almunia is said to have described these plans as “suboptimal”, that they “lack ambition" and that creating a true pan-EU regulator would be the most effective way of harmonizing national differences in telecoms markets. The latter would clearly bolster the current intent to eradicate high roaming charges but the immediate objections to a single EU regulator are much the same as those voiced in 2006.  James Robinson, telecoms regulation analyst at Ovum, cited two obvious candidates:

"Firstly, spectrum that is currently auctioned on a national basis could fall under the jurisdiction of this new, super-regulator. Governments would certainly be reluctant to let this happen as such auctions have provided valuable revenue in recent years… A single regulator would also face issues with the inherent differences of national markets.  For example, EU member states are at varying stages with the rollout of next-generation broadband networks. The regulation of these networks also varies considerably: fibre unbundling has been mandated in Denmark whereas this obligation does not exist in France where next-generation broadband rollout has been relatively slow”.

As I’ve said, all of this is pretty familiar territory: a single EU regulator does indeed represent a ‘logical proposal’ on economic grounds but what surprises me a little is that I’ve seen no mention yet of the daunting scope of governance such a body might enjoy.  In an age of converged media, I assume that the Ofcom model of regulating telecoms, (postal services?); broadcasting and online media by a single body would persist.  But at a pan-European level, that implies an awesome sphere of influence!

The joys of summer

As widely tipped, the inexorable 2-year Communications Review by DCMS has not produced a White Paper, as originally intended.  Instead, the Department squeezed out a so-called Strategy Paper today, only just in time for the summer recess.  The overwhelming feeling of anticlimax was heightened by the way DCMS trumpeted the publication:

“Putting consumers at the heart of communications policy: Maria Miller announces new strategy, including a nuisance calls crackdown, ending ‘bill shock’ and protecting children online”.

Two years of widespread consultation and a series of silly seminars for that…??!

Happily, there’s actually quite a lot more to the Strategy Paper than those headlines suggest.  In particular, the government finally appears to have taken on board that a broadband objective of ‘the best superfast network in Europe by 2015’ is seriously misjudged, not least because of its narrow focus and its shortsightedness.  At last, there is some prospect of the government aiming to develop the ’all-encompassing vision of pervasive broadband connectivity’ that the House of Lords said was missing from current policy:

“We need to plan long-term now if we are to have the digital infrastructure to support the technological advances that will be the platform for growth and opportunity in the UK… We will work in partnership with industry experts to develop a UK strategy for our digital communications infrastructure from 2015 to 2025... It will be underpinned by a technology-neutral approach, since fixed, fixed-wireless, mobile and satellite communications networks all have a part to play in achieving world-class connectivity”.

Heaven be praised!

Democracy in action

Oh boy, talk about a blood bath…  As if the temperature in Committee Room 15 wasn’t high enough, yesterday’s meeting between the Public Accounts Committee (PAC) and interested parties in the BDUK fiasco generated a good deal more heat than light.  The Committee Chairwoman, Margaret Hodge, was her usual combative self but the other members of the PAC were equally belligerent in their interrogation of the apparent villains in the affair – BT and the civil servants.  The questioning of BT was particularly aggressive, poor old Sean Williams (Group Director Strategy, Policy and Portfolio) having to retain his sangfroid while BT was accused by Malcolm Corbett of acting towards broadband competitors like a “vampire death squid, lurking in the depths, waiting to gobble them up and destroy them. 

Predictably, Williams dismissed most of the flak as unfounded allegations but I was massively impressed with his ability to remain cool and collected under intense questioning.  OK, many of his responses may have amounted to ‘I see no ships’ but he never once ducked against any of the allegations levelled against BT, some justified, others less so. 

As regards DCMS, the meeting recorded a big vote of confidence in Maria Miller, who Nicholas James, (Chief Executive, UK Broadband) described as genuinely keen to foster more competitive outcomes in the BDUK process. The same could not be said for the two civil servants ‘on trial’ - Sir Jonathan Stephens (Permanent Secretary) and Jon Zeff (Senior DCMS Officer), who were accused by Hodge of working in a parallel universe. Their mauling by the committee was relentless but it did at least produce one credible action point: that BT’s planned speed and coverage maps for each local authority contract area should be published – not clear by whom – allowing potential suppliers to address the residual 10% of homes. 

Other than that, the main value of the meeting was in seeing the ‘bad guys’ being hauled over the coals.  Anyone else who relishes seeing them receive a ‘damned good thrashing’ should exercise their democratic rights here.  Enjoy!

Life in the fast lane

It’s quite a while since I last mentioned the thorny topic of net neutrality.  Then as now, however, my view has been that the internet is a quirky (‘two-sided’) economic beast and that the emergence of alternative charging models was both inevitable and welcome – particularly at a time when parts of the internet value chain are facing new costs to upgrade capacity.  It therefore came as little surprise to hear that John Malone, the ‘born again’ cable mogul, is involved in just such a paradigm shift between major content owners and some broadband carriers …. 

According to a recent report in the Wall Street Journal, Malone is urging the US cable operators to act collectively in order to flex their muscles in dealings with the content owners – notably Netflix and YouTube (who together account for roughly 50% of peak-time broadband traffic).  Apparently, Malone’s vision of the future is a world in which consumers are able to buy tiers of broadband connectivity bundled to ‘various levels of access to over the top video services’. 

Clearly, the implication is that content owners would have to pay towards the cost of network capacity, a development that has been anticipated elsewhere but thought not – by me, at least - to have been effected.  However, and again according to the WSJ, such arrangements  already exist, leading Web suppliers such as Microsoft, Google and FaceBook paying the broadband providers ‘to get faster and smoother access to their networks’.

The article confirms that this sort of arrangement, content owners paying for enhanced network delivery, is legitimate under the FCC’S ’open Internet’ rules but would the same apply in Europe – where the net neutrality debate has been a little more opaque?  Happily, Neelie Kroes provided the answer last month in an interesting speech entitled "The EU, safeguarding the open internet for all".  It contained a number of proposals, including the following:

“First, we should allow innovation. The new services round the corner depend not just on content, but on high-quality connections...If someone wants to pay extra for that, no EU rules should stand in their way; it's not my job to ban people from buying those services, nor to prevent people providing them. If you don't want to buy them that is also fine, and you should absolutely continue to benefit from the ‘best efforts’ internet".

With a green light as clear as that, how long before we see two-tier internet delivery in the UK?

Lessons across the pond

Potentially a very big subject this, but I just wanted to mention a minor spat that erupted  recently over differences in broadband policy between the US and the EU… It probably kicked off when Susan Crawford, arch critic of the US broadband duopoly, promoted her latest book with statements like this:

“Investment by the incumbents is shrinking, competition is non-existent, America is falling far behind other developed nations, prices are high, and we have no path to the fiber upgrade the country desperately needs”. 

Unsurprisingly, the incumbents hit back.  David Cohen of Comcast posted this comment last month: 

“82% of U.S. homes have access to speeds in excess of 100 mbps, while in Europe, only 2 percent of the population has access to these speeds… No wonder Neelie Kroes, a senior European Internet policymaker, declared that Europe "needs to catch up," citing the United States as a model”. 

That 2% claim for European access to superfast broadband is of course completely wrong: reliable research confirms that the actual figure is twenty-times that figure.  Nonetheless, a similar statistic was trotted out out very recently by Lowell McAdam. CEO of Verizon: 

"More than 80% of American households live in areas that offer access to broadband networks capable of delivering data with speeds in excess of 100 mbps…Contrast this with the European Union, where innovation and investment in advanced networks have stagnated under an onerous regulatory regime… and where today only about 2% of households have access to broadband networks with 100mbps-plus speeds". 

Well, apart from reiterating the fallacious 2% for Europe, Mr McAdam now talks about US networks capable of delivering 100 mbps, not those necessarily doing so.  As others have pointed out, this US/EU comparison essentially boils down to the different coverage figures for cable technology – and has little or nothing to do with ‘an onerous regulatory regime’.

However, while the quoted statistical claims are simply untrue, I’m inclined to go along with some of McAdam’s other comments, e.g. 

“…European regulators have adopted policies that generally limited network infrastructure deployment to a single facility in a given country or region. Other companies were allowed to ‘resell’ broadband services to consumers, but only if they used the same infrastructure. This ‘retail’ competition resulted in prices that may have covered the costs of operations but left little capital or other incentive for companies to invest in improving these networks”. 

But on the bigger question of whether/how regulation suppresses investment, I leave the final word to a far more authoritative voice: 

“Both AT&T and Verizon proffer Europe as an example of a region that lags in broadband deployment because of overregulation.  Contrary to [the] Bells’ claims, sensible regulation targeted at bottlenecks does nothing to disincentivize network investment. That is the lesson from Europe and the USA”.  

Those words of wisdom come courtesy of Sheba Chacko, Head of North American Regulation for BT.

Train crash? What train crash?

Like so many industry commentators, I’ve been very critical in the past of the whole BDUK process for the distribution of broadband subsidies.  More recently, much of this technocratic criticism has been refocused to question the government worth of DCMS and the political future of Maria Miller herself.  While I take a modicum of credit for anticipating this sorry state of affairs, I have to recognise that others were there well before me.  In particular, I’d like to acknowledge the prescient commentaries of Philip Virgo in his IT/political blog.  As far back as January 2012 he was predicting the fiasco that was likely to ensue from DCMS oversight of a flawed broadband model – while still showing some sympathy for the enormity of the task..

In his blog of 4^th January 2012, Virgo anticipated the almost inevitable fiasco with what is alleged to be a Civil Service Staff College Case Study sent to him by a senior Whitehall Mandarin.  I apologise to those of you who may have seen the supposed Case Study before, and for its length, but - eighteen months on - I think it’s well worth another look… 

The scene

You are Head of Broadband Stuff at the Ministry of Entertainment, sitting in your office one day, idly wondering whether to spend the weekend with Fiona Bruce or with the Duke of Cambridge's mother-in-law, when the door slams open and in strolls The Boss (en route to lunch at the Savoy).  "Here's 10p" he says.  "Everyone is to have 100 Megs by Thursday".

"Right Boss", you say.  "I'm on the case".

You ponder for a bit and then you call Malcolm Corbett, because you've heard he's something to do with broadband.  "Malcolm", you say, silkily.  "I've got 10p for you and I want you to fix us up with broadband stuff.  100 Megs for everybody by Thursday.  Can do?"

"Well," says Malcolm.  "I'd like to, but the trouble is, I've got all these tiny projects and 10p won't go very far.  I really need a quid."

At that you blanche (because you suspect The Boss is spent up on film studios and museums and broadcasting "Strictly" and throwing the javelin in 2012 and other vital stuff).  So you promise to let Malcolm know and ring off.  More pondering and then one of your team lifts his head from the Guardian crossword and suggests that you might get some advice from BT.  "Good thinking," you say and call Ian Livingstone.  "Ian", you begin.  "I've got 10p and if you promise to give everyone 100 Megs by Thursday, it's yours!"

Ian pauses for a couple of seconds before he replies.  "Well," he says, thoughtfully.  "I admit I've got a bit of a problem with my pension fund and Openreach is certainly in need of some support.  So - yes - send it over and I promise to accelerate our existing hyper-speed programme that has been covering 125% of the country since 1991, even though there is no demand and the technology isn't ready and which makes UK the best country in the whole world for everything thanks to BT."

"Great," you reply, and hang up.  "Chaps;" you say, interrupting your team's focus on the latest syllabus for Theatrical Studies and Asian Dance in All Schools.  "I've just done a deal with BT and they'll give everybody 100 Megs by Thursday, so long as I give them our 10p."

One of the guys looks up from his papers.  "Isn't that a bit dodgy?" he asks.  "Won't The Boss be a bit nervous about lack of competition and Brussels and all that stuff?  And won't the small players get upset at being left out?"

But another of the guys also looks up.  "How about divvying up the 10p among County Councils and letting them take the flak?  Only a few of them know what they're doing and so you can give them a bit of guidance, nudge-nudge.  They'll run some sort of competition but end up giving their share to BT anyway.  Takes the heat off you, let's them feel they're in charge - doing Big Society stuff - and you can tell The Boss that the job's done so far as you're concerned and that Dave will be happy."

"Sounds good," you say.  "But hang on, what if there's some more money from somewhere else in government?" 

At this, everyone looks confused.  Even a bit shocked.  "But that's nothing to do with us," somebody says.  "That's their business.  DEFRA and BIS and things.  You'll be talking about joined-up government next!"

"True" I murmur, settling down to think about Fiona Bruce again. 

But not for long.  There's a tap on the door and in marches Neelie Kroes and Malcolm Corbett.  You suspect that your day is only just beginning.

Your Task

You are to produce a comprehensive, funded, broadband implementation plan for the whole of the UK that is: future-proof; exceeds EU targets; based on either infrastructure or service competition (or both); sustainable; attracts maximum private investment, and rewards innovation.

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Exactly.