broadband Business

BT only game in rural town

Rural broadband providers drop out of BDUK competition leaving BT only game in village.

I hear that Fujitsu has withdrawn from the race for the BDUK funding. It always seemed strange to me that Fujitsu would be chasing the contracts in the first place. Someone like Virgin maybe companies with an established network and pedigree in the UK.

Its a shame for rural areas that Virgin didn’t see any economic sense in pursuing the farming market.

Unfortunately we are heading back to a BT monopoly for many areas of the country. The shame is that this doesn’t make it efficient for me and you, the taxpayer that is handing their cash to BT to “service” rural communities. There is no incentive for BT to cut costs.

broadband Business internet

Broadband Fibre Farming Tails – The Happy Ending

Last episode from the broadband fibre network laying story that has gripped the nation (see earlier posts here and here if you missed them). I am pleased to say that it has a happy ending, and Wennington now has two more users connected by high speed link to it’s network. Shame about the 2Mps backhaul.

As I write, I understand that the Digital Britain Report has been completed and is awaiting publication on 15th June. I believe it has the 2Mbps USO clause in it, and also some support for Next Generation broadband access in rural areas. Whether this is new money or simply rebranded existing EU funding remains to be seen. Let’s hope this broadband fibre video story becomes a quaint historical note sooner rather than later.

Anyway here’s the video.

Business internet

Broadband in Obama Stimulus Bill

I note that the economic recovery package proposed in the USA includes between $6bn and $9bn to assist with the   implementation of broadband in rural areas (The Register today). In the UK the Government is also talking about making the provision of universal access to broadband compulsory though I’m not sure whether they are going ot subsidise it.

What is worth noting is that the real debate in the UK is around how the country rolls out Next Generation Access which is fibre to the home and an order of magnitude up from broadband in terms of speed.  This has been costed at £29bn.

There is a scenario where the UK could leave the USA behind in the internet infrastructure game. I imagine that the cost of implementing a NGA network in the USA will be an order of magnitude up again on the UK, just because of the sheer size of the country.

Unfortunatley (depending on your perspective) the USA is far better placed for the stimulus of innovation than the UK when it comes the applications to run over this infrastructure.

Business internet

Digital Britain Interim Report

The UK Government has today published Stephen Carter’s interim report on Digital Britain (see previous post). I am a big supporter of what the Government is trying to do here though it is such a huge task or set of tasks that it remains to be seen how successful they will be.

The report is 80 pages long with an 11 page executive summary so I need here to focus on what matters in my world:

  1. Universal Service Obligation to provide all households with a 2Mbps broadband capability by 2012. This is independant of technology so it could be via fixed/mobile/wired/wireless means (in fact any technology that can make it happen – high speed carrier pigeon flocks!?). The detail of how to fund this will be developed.
  2. Check out the regulatory/government  assistance needed to provide the right environment for investment in a Next Generation Access network. I guess this really is already probably underway following the Caio report. It looks as if it includes making it easier/cheaper to roll out fibre by allowing use of drains etc
  3. Establishment of a Rights Agency to help industry put together a framework for promoting legal music downloading. Also to assist with the education process (eg with parents) to inform of the illegalities of P2P music piracy and to try and facilitate a way for the ISP industry to participate in the policing of this problem. The Government seems to have stopped short of forcing ISPs to cut off the broadband connections or persistent offenders. This has been somewhat of a sticking point for large consumer ISPs who might have incurred considerable costs in having to do this. I should also note that the whole “Rights Agency” proposition is also of concern because it smacks of adding overhead and cost to an ISPs business.
  4. What is also interesting though not immediately directly relevant to me is the idea of setting up a digital distribution platform organisation that could enable content providers to compete directly with the BBC. This might be in the way of an open, standards based iplayer equvalent. 

Also referred to is the establishment of the UK Council for Child Internet Safety  (UKCCIS) as part of the media literacy section. The report is perhaps a little light on policy in respect of the wider online economy. For example new advertising models such as offered by Phorm are not discussed as far as I can see. There is yet time for this to be included in the final report.

The whole document is worth a read for anyone involved in internet and communications markets in the UK.

You can download the pdf here digital_britain_interimreportjan09.

Business internet

The Caio Report – Next Generation Access

The Caio report is in the press at the moment. Commissioned by The UK Government’s Department for Business Enterprise and Regulatory Reform (BERR – neither full name nor acronym really roll off the tongue do they?) the report looks into whether government investment or intervention is required to keep UK plc competitive in the internet access stakes.

The question was posed in the light of fibre rollouts in other countries. The conclusions, simplistically, recognising that the report itself is 100 pages of bedtime reading, told us that due to the health UK competitive market no, Government intervention is not required. Although it might be if industry doesn’t get a wiggle on.

I went to a presentation of the report on Friday at the BT Centre, Newgate in London. The room was full of financiers, network operators and vendors all interested in a piece of the action. Exciting though the prospect of fibre to the home may be, with its resultant lightning speed internet connectivity, what was clear was that nobody in the audience could come up with a business case that would justify the £29Bn bill.

BT is testing the water with a £1.5Bn investment that notionally will reach around 10 million homes. This of course, if successful, will only lead to a problem for BERR in the future. Why should BT have to invest in reaching the other umpteen million homes that are not cost effective to reach/Why should those living in the countryside be disadvantaged.

Virgin already has a fibre network that provides partial coverage. There doesn’t seem to be any money in the pot to extend this based on anecdotal evidence that new housing estates are not getting fibre even though the general area is covered by Virgin.  Virgin is though, I have to say, a business that seems to be fast getting its act together where connectivity is concerned. Amazingly having assimilated £12Bn worth of network by acquisition and merger the company allegedly did not know where it’s connections lay. When the fibre was first put in, speed and low cost were the primary focus of attention. Not the keeping of records. This is changing and the Virgin (NTL/Telewest to business users) are now looking as if they might be a highly competitive player in the fast growing fibre connectivity game.

The mobile network operators are also likely to play a role. After all the vast majority of the costs associated with FTTH are in the digging up of the roads rather than in the network electronics. Someone in the audience quoted a figure of £100 per metre for ducting compared with two pence per metre for the fibre.

The case is, interestingly, different depending on the country you are in. For example in the USA the cable provider is typically also the content provider and experience shows that punters are willing to stump up more ARPU to justify the investment. This is not the case in the UK and indeed BT research suggests that only 20% of its broadband users would be willing to pay more for the speed that fibre would bring. Not at least, I suspect, until someone comes up with applications or content that will need the increased bandwidth.

In a sense the “highly competitive UK market” has shot itself in the foot by reducing revenues per user to a level that makes it difficult to fund new investment.

It seems to me that an element of government intervention is almost inevitable, even if it is only to unencumber industry of the red tape associated with large scale capital projects such as this. Leaving it to free market forces ain’t going to work or is going to result in a two tier internet society – the haves and have nots. 

In leaving the meeting I decided that I would have to invest both in the killer application that would drive the speed requirement (teleporting springs to mind) and in a company called Trefor Davies Fibre Layers in order to maximise my takings from NGA. My pick and shovel await.