What can I get, when can I get it, what will it cost me,
and is it worth it?
These are questions CIOs are asking themselves following a
blizzard of reports last month on the future
national broadband network.
Businesses are concerned that the failure to develop high speed
national networks would compromise their ability to run their
increasingly global, collaborative businesses. Fast broadband would
enhance R&D, speed up logistics, promote innovation that leads
to more knowledge-intensive goods, and ultimately create more
high-paying jobs.
The UK communications regulator, Ofcom, proposes to leave the
development of broadband to the market. But Ofcom needs to address
the concerns that a laissez faire approach will lead to limited
competition with only two national core networks - BT and Virgin
Media.
Will Roebuck, a consultant for the
Communications Managers' Association, fears that such a
duopoly, left unregulated, will drive smaller network operators out
of business. This will lead to higher prices, slower roll-out of
services and poor service, he says.
Network competitors say it is hard to justify duplicating BT and
Virgin Media's networks. Because 80% of the cost is in digging up
roads to lay ducts, the incumbents' physical infrastructure gives
them an overwhelming competitive advantage.
Mobile network operators, which offer the reach, cannot offer
the transmission speeds that BT and Virgin Media can. Only when
they implement so-called Long Term Evolution (LTE) technologies
will they get up to 100Mbit/s. But LTE is still some five years
from commercial launch.
Andy Evans, CTO of Cable & Wireless, a telco, says BT and
Virgin Media are the only network owners with physical networks
that have the "capillarity" to reach most of the UK's
population.
Broadband supplier Geo operates a 3000km national broadband spine
and runs a fibre network through London's sewers. CEO Chris
Smedley says the fastest and probably the cheapest way to get the
next generation of broadband services to most people's homes will
be to spend more building out BT's and Virgin Media's networks.
Smedley and Evans say Ofcom should enforce an open access policy
on network providers, especially BT and Virgin Media. They want the
right to buy capacity from the expected duopoly at regulated
prices, and to connect private and regional networks that they run
to the backbone networks under a standards-based transparent
interconnect regime. This will ensure a speedy roll-out, greater
product choice and lower prices, they say.
What this means for the average CIO depends on how they set up
to maintain a fast reliable IT service to the business, and in how
the business wants to communicate with suppliers and customers.
One powerful trend is to save operating costs by centralising
computing operations in datacentres located in countries or regions
where land and electrical power are cheap. Another is to improve
the reliability of systems through remote back-up sites and
alternate-route networks. High speed networks make these options
possible competition makes them more affordable.
Automating the supply chain takes cost out of the transactions
in the chain because it reduces time and errors in it. It also
encourages some firms to find innovative ways to satisfy customers'
needs.
Some CIOs, typically those who work for producers of mass
entertainment products, will be keen to see such networks rolled
out as fast and cheaply as possible. Others, possibly working for a
manufacturer who has only a handful of suppliers and customers in
his vicinity, are unlikely to fret.
The recent Caio Report, which looks at inhibitors to UK
broadband networks, says there is no immediate need to change the
status quo. Any network user can get any network capacity if they
pay the price, and UK prices are, by and large, lower than in
competitive economies. But this breathing space will not last.