Categories
Business ofcom voip

Ofcom will point to huge VoIP growth in 2009 market review

What is the difference between VoIP and Voice over Broadband? In last year’s Review of the Communications Market in the UK Ofcom specified VoIP as largely PC to PC based services and VoB as a service that looked like a traditional phone line.

The regulator did this because it wanted to characterize the space and understand whether the likes of BT continues to wield Significant Market Power in a fixed line market that is rapidly being replaced by VoIP technology. Fair enough.

The biggest problem was that the market research wasn’t adequately specified and the results suggested that the VoIP market in the UK was going backwards. This is patently rubbish and helps nobody, especially when trying to justify capital expenditure budgets.

In all fairness to Ofcom they recognize that they got their specs wrong and are now keen to remedy this. Yesterday they suggested a get together with ITSPA next month to thrash out ways of better assessing the market size. In the first instance a direct survey of all ITSPA members should cover a large percentage of the numbers.

The next report should therefore suggest a huge, recession busting increase in the number of VoIP users. This is because in the first instance the market will have grown significantly but also the numbers will be compared with an artificially reduced figure the last time round.

In fact it is understandable that the VoIP market should grow in these uncertain economic times. One of the selling points of the technology is cost saving, whether that is by a direct reduction in costs or an improvement in productivity.

What is also interesting is that it is becoming increasingly difficult to differentiate between a service that is overtly not a traditional phone look alike service and one that is. Skype, for example, sells itself as an IP application and therefore claims to be beyond the law when it comes to having to support 999 access to the emergency services. However Skype can now be used from a handset which looks and feels like a normal phone.

How Ofcom determine which camp Skype fits into will be interesting to see.

Categories
Business ofcom voip

Meeting between ITSPA and Ofcom

Had a very interesting and constructive meeting with Chris Rowsell of Ofcom yesterday.  We covered 999 access for VoIP, the Ofcom Communications Market Review and Number Portability. A couple of posts will follow this morning.

Categories
Business internet mobile connectivity ofcom voip

Ofcom advice on use of mobiles abroad

Picked this up on my travels.  It’s a YouTube video posted by Ofcom giving advice on how to minimise your phone bills whilst abroad. You might wonder why, as a mobile service provider, I am pointing you towards a site that will help you to cut your mobile bills.

Actually the philosophy at Timico is that our relationship with customers is a long term one and is based on mutual trust.  This includes making sure that the customer gets the best value out of the services we provide.  Ad over – enjoy the video.

PS if anyone does want advice on cutting communications costs whilst travelling abroad please do get in touch.  Our customers also use their VoIP accounts from their hotel rooms which makes calling home cheap and allows them to keep in touch with their business (spouses permitting).

PPS it is good to see Ofcom embracing this modern internet/YouTube thing .

Categories
End User ofcom Regs

Telephone call charges – you never had it so good

Lots of interesting reading comes out of the European Union (sometimes).  On this occasion I continued to study the report that provided me with the VoIP league tables yesterday.

This time I noted the change in the cost of fixed line telephone calls over the last ten years or so.

call-charge-trends

 

The chart tells me that on average, and making it easy on myself by using a £>E exchange rate of 1 we in Europe were paying around two pounds for a ten minute long distance call ten years ago.  It doesn’t bear thinking about.

Of course it isn’t necessarily easy to figure out how much you are actually paying for a national call these days because for consumers it often comes as part of a bundle.  In fact the long term outlook has to be flat rate charge covering all calls.  It would certainly remove a lot of billing costs.

Categories
Business ofcom voip

EU report indicates UK is 22nd out of 26th in VoIP penetration!

According to the EU the UK is woefully behind the leaders in Europe in the adoption of managed VoIP with only a 1% penetration rate in terms of minutes. In contrast, Holland has 32% penetration , and France and Romania 27.34% and 24% respectively. The average penetration across the EU is 8.33%.

Managed VoIP is defined as PSTN replacement over managed IP networks and does not seem to include hosted Unified Communications services such as offered by the likes of Timico, pure play VoIP providers or P2P services such as Skype.

Click on the chart a couple of times to enlarge – the font is very small.

UK is 22nd in EU VoIP penetration table

One might conclude from this that VoIP is healthy in some countries but not in others and the UK performance in particular being woeful. In fact what the above chart tells me is that VoIP usage has certainly boomed in the aforementioned countries but also that the methodology for measuring in the UK at least is inadequate.

The EU data is for December 2007. Ofcom, with who I have a meeting on this subject next Thursday, is presumably the source of the UK numbers and they are missing a trick here.

The UK numbers, as far as I can see, are based on a survey that asked consumers whether they used VoIP or not. Many people will be unaware as to the fact that their telephone service is actually VoIP. BT Homehub for example is VoIP but not sold as such and this service is known to carry billions of minutes a month, although BT has not published specifics.

So good news in some countries which presumably will have got even better since the Dec07 datapoint and some work to be done in others. I will report back after my Ofcom meeting next week.

Categories
Business internet ofcom

EU threatens to sue UK over Phorm

EU Telecoms Commissioner Viviane Reding has issued a statement threatening to sue the UK over their stance concerning behavioural advertising and Phorm.  I covered this last October – Ofcom was saying it was OK for ISPs to use Phorm provided they were transparent about it despite the fact that the EU was saying it was illegal.

In the UK the use of Phorm is being driven by BT, other ISPs having stepped back, afraid of the negative publicity. The reality is that the whole industry would jump at the opportunity to make more money out of advertising, at least the consumer ISPs who have the volume subscriber bases.

Although there are huge privacy issues involved I think the momentum is beginning to gather to the extent that the use of behavioural advertising is bound to grow.  Facebook, for example, must already use this form of database mining because when I visit Facebook, as I am wont to do,  I often see adverts for golf and guitar related subjects – those being two of my stated interests.  Google is also talking about selling advertising based on a given user’s recorded web searching habits.

The UK Government has two months to respond.  The EU press release can be read here.

Categories
broadband Business internet ofcom

Cisco CEO John Chambers on Broadband

Hot on the trail of yesterday’s post on the Ofcom decision to waive regulations on the roll out of fibre to homes in the UK Cisco CEO John Chambers has written a guest post on Om Malik’s blog on a similar subject.

I had thought that the Obama stimulus package, which contains a substantial sum of money targeted at broadband roll out, was aimed at standard broadband speeds but it looks as if this is not correct.

It does make you wonder whether the government here in the UK will now look to subsidising the £29Bn it is estimated it will cost to get universal fibre coverage in this country.

Categories
Business internet ofcom

Ofcom gives BT green light for fibre investment

Ofcom effectively gave BT the go ahead today for a £1.5Bn investment in a fibre network to provide up to 100Mbps internet access to homes in certain areas. By removing any regulatory barriers that might constrain BT from charging free market pricing for the fibre services Ofcom has set an environment that makes the BT business case for the investment workable.

BT has been involved in a high profile lobbying excercise to get this decision since around the time of the Caio Report last year.

I welcome this move though many people in smaller metropolitan and rural areas unlikely to get access to the service will view it as another step towards widening the digital divide.

Categories
Business ofcom security voip

Skype Security Italian Style

The BBC today has reported that Italian crooks are using Skype to avoid detection by police who use traditional wiretapping to monitor phone calls. The Skype signaling and  media path is encrypted which makes it very difficult to tap into. Also because, as a Peer to Peer protocol Skype doesn’t use any centralised servers that might be able to be monitored it adds to the difficulty for law enforcement agencies.

The whole problem is then compounded by the fact that because VoIP/Skype is a very nomadic service, ie you can use it from any internet connection anywhere, it becomes difficult to track the location of a caller.

This is a problem being looked at by Ofcom as part of the process of caller location identification for the emergency services. Currently if someone makes a 999 call from an unknown address, it is difficult to pin down where that call is being made from, at least in a timely manner.

There was a high profile Canadian case where someone dialled for an ambulance and it went to a location three thousand miles from where the call was actually being made from because the address held by the operator was not the address from which the call was being made. 

When a VoIP call is made the details of the call logged by the Internet Telephony Service Provider include the IP address of the originating party. If you are an Internet Service Provider (note the distinction between ITSP and ISP – an ITSP often does not provide the underlying broadband service) you can correlate this IP address with a physical address (ie house number and street).

The problem is that this is a manual process and would likely take hours at best and potentially a couple of days. This is a process that could be automated but it is something that would probalby cost billons to implement universally in the UK.

I’m sure there will be more to say on this subject in 2009. As a final note it is often said that the security forces, aka GCHQ and CIA et al have not cracked the Skype encryption technology. I find this difficult to believe.

Categories
Business ofcom voip

LLU Lines On The Up

LLU, or Local Loop Unbundling continues to grow in the UK. The Office of the Telecommunications Adjudicator (OTA otherwise it’s a bit of a mouthful) has released it’s latest numbers which are for December.

llu-installed-base-dec08

It’s quite interesting to look at the curve. Can we see a classic product lifecycle curve here? Low initial growth then a steep incline followed by a tailing off that at this stage is barely perceptible. What concerns me somewhat is that I’m not sure that we should see a lifecycle curve for this product. It is a long term commodity play.

Also if you look at the Ofcom data for fixed line market penetration you can see that there is a long way to go before LLU should flatten out. It also means there is a long way to go before any other player’s market share is comparable to that of BT.

uk-fixed-lines

What is also interesting is that the fixed line market has stopped declining in terms of lines and indeed showed a small growth in 2007. We have to wait some time yet for the 2008 results. At 33.7 million fixed lines represents around 16% market share/penetration for LLU.

It would be interesting to understand why the number of fixed lines grew year on year. My guess is that it is the effect of more and more people working from home with companies paying for second analogue lines to carry a dedicated business broadband connection.

Categories
broadband Business internet ofcom

Ofcom Publishes Research on Broadband Speed

Ofcom has just announced the results of its research into consumer broadband speed in the UK. The report says that 93% of UK consumers are satisfied with their general broadband experience although levels of disatisfaction do vary depending on where they live.

Rural users are, unsurprisingly less satisfied than urban users. Also the satisfaction ratings drop to 67%  for those people watching online TV. This is a warning shot across the bows for UK ISPs as using ADSL for watching TV online is going to see a huge growth.

Ofcom used broadband monitoring company samknows to conduct the research which also found that the average UK consumer ADSL speed was 3.6Mbps which is only 45% of the typically adverstised speed of 8Mbps. This is lower than the theoretical average max possible speed across the UK of 4.3Mbps taking different distances from the exchange into account.

The testing seems to have been quite comprehensive with 1500 homes involved running 7,000 different tests, meaning that over 10 millions tests were conducted overall on a range of supplier services. Interestingly the peak usage was found to be between 5pm and 6pm on a Sunday afternoon. I guess everyone is watching Songs of Praise online – assuming they still broadcast it 🙂 .

What would be interesting is if Ofcom were to commission the same testing for business broadband connections. Unfortunately this is unlikely to happen because the original research was conducted as a result of a perceived level of consumer disatisfaction that is not there where businesses are concerned. Although businesses use the same fundamental ADSL technology they typically run with ISP networks such as Timico that are less congested.

Categories
Business internet ofcom

Growth In Internet Usage Since 1995

On a journey around cyberspace came across a very interesting website. It tracks the growth of the internet since 1995. Almost a quarter of the world’s population is now using the internet.

Interestingly what I think these statistics tell us is that the internet age is still only beginning. There are another 4.5 billions users yet to join the community.

Even if you use Ofcom’s UK penetrations statistics of 58% penetration for ADSL and assume that the UK being a fairly mature market, is approaching saturation point, it still leaves us with 2 billion more people yet to connect. That’s a massive market opportunity for online services somewhere.

I have graphed some of the statistics for easy reading:

growth in internet usage since 1995.
growth in internet usage since 1995.

 internet-usage

PS – sorry about the quality of the graphics. I never was any good at art at school.
Categories
Business ofcom UC voip

ITSPA Awards Photos

I mentioned that I would get some photos up once they came back from the developers and here they are. The biggest shock for me is to see how much weight I have put on this year – something to sort out in January!! I also note that I need a haircut.

On the plus side having reflected of the Awards Evening it was a highly successful event from ITSPA’s perspective. Not only was the turnout high but in his speech Ofcom Board Member, Stuart McIntosh, was most complimentary regarding the work that ITSPA has been doing. This is ITSPA growing up.

This is a time of fast moving changes in the industry and it is good to be a part of it.

Tref accepts the ITSPA Award

I accept the ITSPA Unified Award from Dave Axam of BT.

The acceptance speech; erudite, informed, witty yet tempered with the appropriate level of gratitude and humility.

Categories
broadband Business ofcom

Ofcom Broadband Code of Practice

Ofcom’s new code of practice in respect of how consumer ISPs sell broadband comes into force tomorrow. It has been brought about because up to 25% of consumers consider that they don’t get the speeds they expect from a broadband connection.

There has been a lot of controversy surrounding how ISPs sell broadband, specifically in the consumer space as they have been desperately trying to outdo each other with tales of superior performance, unlimited downloads, bigger, faster, better etc.

Whilst the code does not apply to business services it is a good code. Timico has always operated in a transparent way in respect to selling ADSL. For example our 21CN ADSL2+ service in theory will provide download speeds of up to 24Mbps. In reality users are unlikely to get this. I will be publishing the results of our trials after Christmas showing what speeds the trialists have been getting.

The ISPA is issuing a press release today supporting this Ofcom code of practice.

Categories
Business internet ofcom voip

999 Call Traceability

Had a very interesting discussion with Chris Rowsell, Ofcom Project Director, who clarified what obligations the ISP community were likely to have regarding the traceability of calls to the Emergency Services.

Location information requirements for Internet Telephony Service Providers have been covered in a previous post. Ofcom, together with the emergency services establishment, and for obvious reasons, is trying to understand how real time information regarding the location of a caller might be provided.

The only information available that might help pinpoint a location is the IP address from which the call is being made. There are, however, many problems to be over come, and I’m sorry about the technical nature of some of these points for those who just read this blog for the occasional light entertainment. 

  • The IP address might be behind a NAT
  • There might be multiple Internet Service Providers involved
  • The call might be made from a wifi mesh network
  • Many ITSPs are not ISPs  and cannot easily relate IP addresses to locations.

It is physically possible to imaging the process by which this tracing could be done. Timico, for example, has records of where calls are made to and from. These are kept for billing purposes and contain IP address information. Timico can also link the address of a broadband customer to the IP address of that connection.

The act of hooking up both sets of data is far from being real time and  the cost of developing a system to do so would be huge and disproportional to the value. Certainly it would be unlikely to get past a cost benefit analysis. Interestingly the establishment values a human life at £1.4 million for the purposes of these CBAs.

CR accepted that there was currently no practical way of quickly linking the two sets of data. He did intimate that Ofcom would be initiating a project sometime next year to discuss a way ahead. I suspect that this will be a long and arduous process.

Categories
Business internet ofcom

ISPA Conference

Another busy week in prospect starting on Monday with the ISPA conference in the City of London. This is an annual event where the industry gets together to debate “commercial and regulatory issues of today and tomorrow”.

I’m on at 14.00 on a panel that discusses how ISPs can work in harmony with content providers. Other panelists are Feargal Sharkey of UK Music, Jeremy Olivier of Ofcom and Steve Purdham of We7, a music download business that was co-founded by Peter Gabriel.

This is a pretty hot topic at the moment, not only because of how piracy is hurting the music industry but also because of the pressure that legal download sources such as BBC iPlayer is placing on both ISP networks and margins.

Categories
Business ofcom voip

USA FCC Forces Mobile VoIP Providers To Support 911 (ie 999)

In the USA the Government in the guise of the Federal Communications Commission has ordered VoIP providers who allow access through mobile devices to provide their customers with support for calling Emergency Services.

It is perfectly possible for providers to do this. What isn’t possible is the identification of caller location information. In the UK Ofcom has recognised this and specifically exempts users of mobile voip services from having to provide address details. The 999 system recognises a mobile VoIP number as such.

A mobile VoIP user doesn’t of course have to use a mobile handset for this to be the case. A laptop with a softphone is a more likely scenario with users travelling between different office locations.

VoIP providers in the USA are going to have a difficult time of it methinks. They don’t appear to have the same leeway as in the UK and the FCC isn’t telling them how to go about providing the location information.

Categories
Business internet ofcom

UK Parliament and Internet Conference

Had a very interesting day today at Westminster at the 3rd Annual Parliamentary Internet Conference. The event was very well attended with standing room only for much of the time.

There were a number of headline speakers including Ed Richards, CEO of Ofcom and Francesco Caio, author of the report on Next Generation Access. I have commented on the latter in previous posts but this was the first time I have seen Ed Richards in action. His predecessor in the job, Stephen Carter, couldn’t get there on account of his being created a peer today.

Richards was very personable and cited a few facts that I use myself in talks – we obviously read the same stuff. He made one quip regarding what you would have found had you “Googled” iPod 5 years ago. The answer was nothing. “myspace” took you to an Australian home improvement store.

I guess his point was that things moved very quickly in the internet space and the proliferation of matters “internet” brought with it a snowballing set of responsibilities for Ofcom. He didn’t offer any advice as to what we should be Googling now to see the success stories five years down the line.

Categories
Business internet ofcom

Ofcom And Behavioural Marketing

If you are a tecchie you will already know about Phorm and already have formed your own views. If you are not the whole storm may have passed you by. That Phorm storm however is still a blowin’ strong.

Phorm is a system that allows an ISP to monitor the internet browsing behaviour of its customers and to thereafter provide targeted advertising based on your surfing history. The pitch from an ISP to its customers is that it will make advertising, which is going to happen anyway, more relevant and that noone could possibly object to this. The ISP benefits from enhanced click through revenues.

The objection from some consumers is that it invades privacy. It opens the door to potential problems. For example one member of the family secretly looks at pornography whilst everyone else is out of the house. Phorm recognises this and starts pushing adverts for pornography to that computer which is also being used by the kids during the day. Not good.

In principle the government is saying it is not illegal provided consumers are informed as to what they are signing up for and privacy is respected. In actual fact during early trials of the system in 2006 and 2007 by BT customers were allegedly not informed of what was happening and this is potentially being seen as illegal by the EC.

BT seems to have actually started using Phorm in a new trial under a service banner called Webwise. It is based on an opt-in policy but no mention is made, naturally, of the controversy surrounding the technology.

Yesterday a meeting was held between Ofcom and various representatives of Government and the ISP industry to discuss the subject. Present were most of the major consumer ISPs, BERR and Phorm itself. The Government doesn’t really want to get involved here and wants industry to draw up it’s own voluntary Code of Practice. “Helpfully” it has also provided an example of such a Code.

Industry, I sense, is steeling itself for another bout of legislation. It doesn’t really want to get further embroiled in red tape/codes of practice and certainly the ISPA has not begun working on one.

This certainly is an interesting industry. As a member of the ISPA Council I need to look at the subject from the perspective of the ISP membership.  Consumer ISPs will be interested in whether they can upside their margins during tough times, and who can blame them. As a director of a Business to Business ISP I have no interest in Phorm. We provide uncomplicated quality connectivity to our customers without the additional unwanted addons (plenty of wanted addons though 🙂 ). As a consumer I might or might not like the idea of Phorm.

I’ll keep you posted.

Categories
Business ofcom voip

999 Update From Ofcom

A customer of one of ITSPA’s members complained to Ofcom recently. He was unhappy about having to provide his address for the use by the Emergency Services in the event that he ever had to dial 999. His position was that the reason he had a VoIP service was that he was able to use it from many locations. Providing information regarding one location was therefore pointless (he said).

The Ofcom reply said:

“Ofcom’s view on this is that location information should be provided to the emergency services in cases where the service is being used at a predominantly fixed location. As such, nomadic users will not have their address provided to the emergency services.”

This is a useful clarification by Ofcom. VoIP users with an inbound number are in any case flagged as such if they dial 999. The operator knows to ask for confirmation of location.

The problem lies with silent calls or calls to 999 that are immediately terminated upon answer. There could be a totally innocent reason for this. For example my 4 year old son once dialled 999 by repeatedly hitting the randomly selected number 9 on our home phone. I received a callback and rebuke from the operator for letting the little dear waste their time.

However there may of course be reasons why the call was terminated that are of genuine concern. Granny consumed in the flames, attacker putting the phone down forcibly or caller collapsing on top of the phone spring to mind. You can use your own imagination here.

Because of this Timico will at least record the main company address of their VoIP users even though we know that a great many of our customers are nomadic users.

Categories
Business ofcom Regs

New Number Porting Process Thrown Into Disarray

The big news that came out yesterday was about Vodafone’s appeal against the new number porting process. I recently did a post on Portco, the new company being set up to manage an improved number porting process for the UK.

It’s a good job I didn’t give a specific date for the formation of this company because the whole activity is now being called to question. Vodafone successfully appealed against the Ofcom decision to mandate Portco on the basis that it was based on flawed judgement. If you want to read the whole judgement (and I don’t) you can find it here.

Ofcom now has to reconsider its whole approach to number porting. One has to feel sorry for the people involved in putting the whole Portco programme together. They have been hard at it since hte beginning of the year and now do not know whether their labours have been in vain. A meeting is apparently being held on the subject on the 24th September after which I assume we will know more. 

Categories
Business ofcom voip

Number porting

Number porting has always been a hot topic in the telecoms world. Why does it take so long? Why can I move a number from “service provider A” to “service provider B” but not from “service provider C”.

In the “old” world porting was (is) an expensive process involving one provider actually forwarding calls to another. The number is never actually ported, just diverted. Whilst the consumer doesn’t see the costs the network operator certainly does.

Way back in November 2007 Ofcom decided to make it easier for everyone, consumers and networks alike and mandated that the UK telecommunications provider industry sort itself out. What’s more Ofcom gave everyone until 31st December 2008 to get a database populated with numbers so that porting would be made easy – within 2 hours for a mobile number, for example.

This would make switching service providers really easy and provide for a more competitive marketplace etc etc.

A working party was set up that includes all major telcos in the UK together with representation of smaller businesses via ITSPA (Internet Telephony Service Providers’ Association) and others. 

This activity seems to be making progress. Portco,  new company funded by industry to manage the porting process, is on the verge of being set up and a supplier/partner to build the database is near to being selected.

The initial requirement is for mobile numbers to be easily ported. Once the database is available the industry is being given until September 2009 to get it populated after which time mobile number porting should be a cinch.

Fixed numbers don’t have to be portable in the same way until the end of 2012 but I imagine that in reality it will happen a lot sooner because it is in the interest of everyone to make it happen.

Categories
Business ofcom voip

Emergency

Monday 8th of September is an important day for Internet Telephony Service Providers. This is the day by which they have to support Access to the Emergency Services by VoIP phone ie 999 must work when dialled.

There has been much debate amongst the global VoIP provider community as to how much regulation should be applied to VoIP. In the USA it centres largely on commercial issues. In other words telephone calls are taxed but VoIP calls were not taxed, at least initially. The argument was that VoIP calls are actually just computer to computer data traffic and not telephony as traditionally defined.

The incumbent telephony providers have fought hard to have VoIP  calls taxed in order to remove the competitive advantage notionally handed to VoIP companies.  Clearly it is in the interest of the VoIP provider community not to be subject to taxation. The justification for this is that it would stifle innovation amongst new market entrants. There is a case for this.

In the UK the argument is different. Regulation is not so much about taxation as personal safety. In this case Ofcom, the UK regulator, has mandated that if you provide telephony services that allow connection to and from traditional PSTN phone numbers you must provide access to the Emergency Services.

The Ofcom pronouncement comes with constraints including making sure that customers are aware that VoIP calls probably aren’t going to work if there is a power cut of if the broadband connection carrying the calls is down.

I am fully supportive of the Ofcom position.  What is going to be interesting is how the regulator responds to companies like Skype who at this time do not support 999 access and as far as I am aware have no plans to do so. Buyer beware.

Categories
End User ofcom security

Piracy

Oh oh here come the pirates!

What a rogue.

It’s a constant battle.

Everyone needs a little help.

Ofcom to the rescue.

 

Categories
broadband Business ofcom

Ofcom Eases Up on Returns on Investment for Next Generation Broadband

In my post “Who pays for next generation broadband” I mentioned that BT were complaining that the regulatory environment in the UK positively discouraged investment in a high speed broadband network (read fibre) because it did not allow a return on investment commensurate with the risks involved.

Well Ofcom head Ed Richards seems to have made an about turn on this in a speech he made to the “Intellect Conference 2008” on 3rd July.

I’ve pasted an extract here:

“Our position is clear. Ofcom favours a regulatory environment for the next generation of networks and access that both allows and encourages operators to make risky investments, to innovate for the benefit of consumers and, if the risks pay off, for the benefit of their shareholders too.

We are very clear that if operators are going to make investments in new infrastructure, investment that is inherently more risky than developing the existing infrastructure, then they need to know that the regulatory framework will allow them to make and keep a rate of return that is commensurate with the risks they are taking.”

I can’t imagine that anyone will be unhappy about this though we still have to see someone stepping up to the plate with the requisite investment. UK PLC does need to be looking beyond 21CN for the IP connectivity that will allow the true exploitation of the promise of the internet.

Categories
broadband Business ofcom

Who Pays for Next Generation Broadband?

Interesting enough debate at the Waldorf Astoria hotel in London today with the latest Telecommunications Executive Networking bash. The subject was Next Generation (NGN) broadband and specifically who is going to pay for it.

 

The debate was prompted by the BT position that the UK regulator OFCOM does not allow the company to make return on investment to justify spending money on an NGN network.

 

Panelists included Andrew Heaney from Carphone Warehouse, Kip Meek from the Broadband Stakeholders’ Group and David Campbell, Director of NGA at Openreach. It is actually a complex and highly politically charged subject when you take into consideration that BT (Openreach) has Universal Service Obligations.

 

In short the assembled masses, the great and the good of the UK Telecommunications industry, concluded that they wanted an NGN network to be privately funded.

 

A few interesting points came out of the meeting. Of the two hundred or more attendees the majority of them were equipment vendors. There can’t have been more than ten or fifteen hands up from ISPs. I’d have thought that the ISP community would have been more interested than this turnout suggests. Perhaps this is because there are few (if any) ISPs who could afford even to consider investing £12 billion in a high speed broadband network. No one is going to be able to do it alone.

 

There seemed also to me to be a level of ignorance as to why a high speed (100Mbps) network might be wanted. What applications would drive this they were asking?  In my experience at Timico once people get given higher speed access they find ways of using it. The move from 2Mbps ADSL to 8Mbps (up to J ) ADSL Max prompted a large increase in average usage per tail.

 

Andrew Heaney could see that a NGN would be required but that this wasn’t going to be for some time to come. He intimated that he would be looking to begin looking at such a network in a 2 – 4 year timeframe. He also suggested that traffic was doubling every two years. This is slightly slower growth than others in the industry are forecasting.

 

Whilst the chicken and the egg come into this calculation to some extent my rough back of a beer mat calculation goes like this.  Traffic doubling every 2 years is the same as being given double the download bandwidth in the same timeframe. On this basis the arrival in 2008 of (up to) 24Mbps  should prompt the need for 48 Mbps in 2010 and 96Mbps in 2012. This isn’t particularly scientific but it does provide a rough guide to the way that market demand could go.

 

There isn’t a plan on the table today for 96Mbps but 50Mbps is available now from Virgin. If anything would be geared to make the board of BT press the investment button for Next Generation broadband it would be seeing their market share going to Virgin.

 

Practically everyone in the room said they would be prepared to pay the additional £8 a month for NGN broadband that the £12bn investment is supposed to mean. Of course this is easy for a room full of well paid company directors to decide, The Openreach position is that the value in the market has disappeared and that consumers have been lead to expect faster broadband for less money.

 

We shall see. Interesting times ahead.