Digital Britain Report: Chapter 3a
Chapter 3a: A Competitive Digital Communications Infrastructure
AMBITION: TO STRENGTHEN AND MODERNISE THE COUNTRY’S COMMUNICATIONS INFRASTRUCTURE, EQUIPPING THE UK TO COMPETE AND LEAD IN THE GLOBAL DIGITAL ECONOMY.
This is a lofty aim, especially when you consider how other countries (both within and outside of Europe) have managed the evolution of their communications infrastructure over the past decade or so.
- The report rightly points out that backhaul (“the middle-mile”) is a problem.
- Cable fares a lot better than BT’s offerings, thanks to widespread early investment in better-performing technologies.
- Both universal access to current-generation broadband and rapid progress to next-generation broadband are important.
- USC “might” provide access to up to 1.5 million households who currently have little or no broadband.
- Mobile broadband will have a part to play - specifically LTE (WiMAX gets a mention later on, too).
- The Ofcom will be directed to adhere to the recommendations of the Independent Spectrum Broker (ISB) in terms of moving to “next-generation mobile services”.
- The sub-1Ghz bands will be liberalised, with Ofcom coordinating. Specifically, the current GSM900 band will be “liberalised” (that is, existing license-holders will be permitted to re-use the spectrum for other things), and there will be an auction for the 800MHz band.
- Immediate release of the unpaired 2.6 GHz spectrum (suitable for WiMAX) for auction.
- No operator participating in the proposed auctions can hold more than 2x65 MHz of sub-3 GHz bandwidth (they must relinquish blocks of 2x5 MHz that they already hold in order to meet this requirement)
- Operators will have to give up a certain amount of 900 MHz spectrum for any 800 MHz blocks that are picked up at auction.
- In terms of access in general: No mention of latency or upload bandwidth, throttling or caps (except in very general terms as a potential consequence of under-investment).
- Government help will be needed to provide broadband Internet access to those “hard to reach” areas of the UK.
- In order to fund this, a “supplement” of 50p per fixed telephone line per month will be payable to consumers and business.
- Independent localised networks will have a part to pay, though there’s a very small amount of money committed to encouraging their uptake.
- For mobile, the USO is actually reduced to 1Mbps, as 3G can’t realistically sustain 2Mbps across the board.
- Some talk of satellite, but not a lot. For most people, satellite is an absolute last resort. Presumably the hope is that sub-1GHz 3G (and beyond) will render it unnecessary.
- There is a recommendation for mobile operators to provide mobile Internet access on the London Underground in time for the 2012 Olympics.
- Ofcom will be charged with keeping an overall eye on our “communications infrastructure” in general; presumably major network and datacentre operators will be encouraged to liaise.
We will therefore take action on two fronts. First, we will ensure delivery of the Universal Service Commitment at 2Mbps, and second we will take action separately to address the issue of next generation broadband availability.
We welcome the substantial investment already taking place, and are confident that the UK’s competitive markets will provide the stimulus for further investment without any Government intervention, providing competitive coverage of superfast, next generation broadband for between half and two-thirds of the population.
Other developed economies are recognising the importance of investment in next generation broadband and, as we set out below, are pursuing different strategies to achieve this. In the UK we will achieve wide-scale next generation coverage first through market-led investment and, to a smaller degree, through targeted intervention.
The increasingly widespread conclusion from industry and economic analysis is that there is no obvious means whereby the market, unaided, will serve the final third of the population. We therefore propose a Final Third Project to deliver at least 90% coverage of Next Generation broadband for homes and businesses by 2017 (and, it is hoped, accelerate the expansion of the boundary of market provision from 50% to the two- thirds coverage level).
The Government intends to propose a small general supplement on all fixed copper lines (that is, residential copper lines, the equivalent business analogue and ISDN2 lines and cable telephony lines) from 2010 for a Next Generation Fund. Such a model would be the communications sector equivalent of the Renewables Obligation, which is paid for through household and business energy bills to deliver an objective which the market otherwise would not. It would apply to fixed line rather than mobile because mobile operators already contribute with licence coverage requirements for mobile telephony and broadband.
We envisage that the Next Generation Fund supplement would be collected by all fixed line operators, including cable. It would not be consolidated for accounting or tax purposes by those operators.
The Government envisages that the Network Design and Procurement Group responsible for delivering the Universal Service project would then hold tenders to which all operators (including cable) proposing to install a next generation service would be eligible, on a reverse auction basis to provide next generation broadband to the Final Third.
A key part of the programme will be to ensure a coherent framework for network designs, operating systems, common processes and regulatory requirements so the next generation access networks across the country work as effectively as possible for all parties. In particular, the networks need to offer all end users an optimum level of service quality and choice.
The Government will consult on the detailed design and implementation of such a measure in the normal way.
The Government proposes to amend the Communications Act 2003 to make the promotion of investment in communications infrastructure one of Ofcom’s principal duties alongside the promotion of competition, to meet its overarching duties of securing the interests of citizens and consumers in the provision of communications services.
Localised and community network developments have a role to play in developing next generation broadband, and where we can we should look to support their capacity, scale and expertise. Work on standardisation and inter-operability between local networks has already commenced. The Government will provide further support through a £150,000 grant to support the Independent Networks Co-operative Association (INCA).
Although the effects might immediately be marginal, there is still value in maximising the possibilities for alternative means of deployment of fibre. We therefore propose action in four areas:
The Government believes that, as demand for next generation services develop, commercially-based wholesale access to the cable network could benefit both the market and the consumer. At this embryonic stage of the market’s development, regulatory action would be premature and market-led approaches to access are preferable. The Government will continue to monitor closely developments in this area.
We are asking community broadband groups to provide evidence of where access to existing primary infrastructure or shared ‘digs’ could accelerate their deployment.
We will investigate as part of the scheme design for the Next Generation Fund means of maximising the future potential commercial access to primary infrastructure.
We will continue to work with utilities and public authorities to facilitate better use of existing mechanisms. By 2012 our goal is that information on all street works planned for 1-2 years ahead is made available to all those likely to work in the highway. We would like to move to a system in which all utilities offer to share works with other interested parties, with the option of enforcing a ‘must offer’ system if necessary.
[In terms of white-space utilisation]: The Government will therefore encourage Ofcom to carry out the necessary technical work and testing to establish the parameters for use and will support Ofcom to achieve the international harmonisation that is required.
[Transport networks]: The Government is therefore considering how best it might support the availability of these services in a cost-effective manner – one option is to make the provision of high speed broadband services part of the rail franchise requirements for train operators or to integrate the requirement to provide mobile broadband services into the next Network Rail control period funding.
On the underground, the London Olympics in 2012, which will be the most digital Olympics in history, seems a particularly good reason for the Mobile Network Operators to work with the Mayor of London to provide and fund solutions to take the initiative to improve the broadband mobile access for mobile customers travelling by Tube – including the huge influx of international visitors to the London Olympics. If regulatory or other similar constraints turn out to be a barrier the Government is willing to address these.
We will ensure the Board of Ofcom has a statutory obligation to write as necessary to the Government alerting Secretaries of State to any matters of high concern regarding developments affecting the communications infrastructure and in any event to write every two years giving an assessment of the UK’s communications infrastructure.
The report talks in terms of BT and Virgin Media being competitors with one another, but in reality this isn’t strictly true. In technical terms, Virgin Media’s broadband network is years ahead of that widely-deployed by BT.
For a variety of reasons, BT and Virgin Media “compete” only in very superficial terms: customers don’t switch from an ADSL-driven Internet access product to a cable-based one or vice versa with any regularity.
Thanks to massive consolidation in the cable access market there is precisely one major player: Virgin Media. In terms of cable-based Internet, there is no competition to speak of. Virgin Media’s preference for selling multi-platform services rather than simply an access product means migrating away from them is far harder than, say, switching between ADSL providers.
While BT (as an ISP) does not have a monopoly, BTopenreach—which provides the backhaul for the majority of ADSL ISPs—certainly does, and competing with BTopenreach on any meaningful level is difficult without significant levels of capital investment.
The Digital Britain could have taken the opportunity to recommend unbundling the cable “local loop” and separation of backhaul provision, which would potentially have more wide-ranging and beneficial effects on the UK Internet access market than when the same conditions were imposed upon BT. Instead, Lord Carter deemed such action “premature”.
Arguably, “other developed economies” are doing this right: Back in 2007, it was stated at Telco 2.0 that BT Openreach will only offer FTTP/FTTH when it can do so ubiquitously and profitably. Its position may have changed since then, but the fact that it’s still conducting trials (the name “Ebbsfleet” is well known to any industry watcher) doesn’t bode well for the immediate future.
The 50p supplement idea is one I’m not sure about: I don’t really understand why it’s only those with fixed lines who pay for the remainder. This doesn’t make a huge amount of sense to me whichever way I look at it.
On the one hand, why restrict it to those with fixed lines, when it’s a public service for all? On the other, fixed line ubiquity means that almost everyone will pay anyway, so why not obtain the money through ordinary taxation? I suspect the answer lies in ease of legislation and channelling funding, though that’s purely an educated guess. In practical terms, it won’t make much difference to most people, and is far less contentious than, say, a hike in income or council tax.
Encouraging community broadband groups and other localised access schemes is undoubtedly a good thing (especially when people are increasingly living in flats, which provides an opportunity for shared access schemes). I’m disappointed by the paltry funds being offered here, though, in comparison with other aspects of this chapter.
Better planning of street works is very sensible, though without taking steps to reduce the ongoing financial burden upon would-be competitors for BT Openreach’s backhaul offerings, its usefulness is perhaps rather limited.
Liberalising the radio spectrum is also good, though I have a feeling the Government’s hand has been forced somewhat by the incumbent mobile operators. I can’t see them being unhappy with the proposals by any means. That said, dropping GSM sooner rather than later, and making use of sub-1GHz blocks for newer (higher-bandwidth, in terms of access) technologies is broadly a win for consumers.
I’m not entirely sure how London commuters will take to widespread availability of mobile broadband on the tube. I suspect Tube Etiquette will dictate that phones are kept in silent mode and are for SMS/Internet access only.
From this chapter alone, I’m fully expecting to see a massive increase in Ofcom’s funding remit for the coming years.
This chapter contains zero—count ’em—mentions of IPv6.
I’ll cover the television part of this chapter separately.
