How rural is Smithfield (London EC1)? Where is final 10% which is "uneconomic" for BT?

I was recently contacted by a small firm in the heart of London, under pressure from customers who wanted it to do far more on-line, asking why there was all this fuss about rural broadband and services to farmers when they were stuck with an elderly leased line and no affordable update path. I was then told of a proposal for a group of firms in Shoreditch, supposedly the heart of our digital rennaissance, faced by a similar problem. 

I could not believe what I found when I checked these out. I had hoped that those I asked would tell me that I had misunderstood what is happening. Instead I have been collecting allegations that BT has a policy of not enabling FTTC where the exchange has more than a certain percentage of business lines. The allegations come from those seeking to provide broadband to business centres and parks across most parts of the UK, not just Central London 

I will begin, however, with “the City”, where it appears that that the broadband services available to small firms around Smithfield (for example) are little, if it all, better than those offered to farms rearing the cattle and sheep whose carcasses are shipped from across England to London’s central meat market. According to SamKnows, those served by the Fleet, FaradayMonument and Wood Street exchanges cannot get “Fibre to the Cabinet” while those served by Wood Street cannot even get 21CN. I was told that it was to do with the absence of competition from Virgin – then I started asking around. Apparently those served by the Holborn, Southwark, Wapping and Whitehall exchanges currently face similar problems but can expect upgrades later this year. 

The consequence is that businesses in central London are often forced to choose between SDSL (leased and generally 2 Mbps), ADSL2+ (contended and therefore unlikely to be better than SDSL in practice), bonded ADSL (which tends to be too unreliable for business critical applications), and FTTP: where the Providence Works (Shoreditch) proposal illustrates the likely cost to a small firm. Meanwhile, despite the lack of effective local competition (save in the Moorgate area), Ofcom has deregulated exchanges like Faraday and Monument because they have a least four resellers of unbundled BT lines.

It is not just Banbury, Birmingham, Bristol, Leicester, Manchester and Newcastle that have inner city broadband deserts where businesses are being forced to stagnate or relocate if they cannot afford current BT construction charges for fibre to the premises. Hence the case for an OFT investigation into the business broadband market. If it is true that BT has a policy of not enabling exchanges with more than a given proportion of business lines, then there is also a case for looking at how well, or otherwise, Ofcom has been doing its job with regard to the needs of business users, especially small firms, and not just the needs of consumers.

Hence also the case for the urban broadband fund (which I had not previously understood) and for it to be used to stimulate genuine competition, by making open access inter-operability a condition of the funding. Given the failure of DCMS (and BIS before it), let alone BDUK and Ofcom, to identify and address the problem, hence also the case for handing responsibility to local authorities, whose officials have a greater interest in the effect on jobs with local businesses, on property values and on wealth generation, than on getting jobs with big law firms and consultancies, regulators or incumbent operators.

I should add that I do not believe that the current situation is in the long term interest of BT shareholders.Forcing businesses in Central London, including producers of multi-media content, to relocate stagnate – in order to protect leased line revenues, does not fit well with their quadruple play business model. More-over, their cash cow, leased line business would be at serious risk were, for example, Google, Microsoft or Sky, to invest in providing fibre links to those generating content to service their business models.

I happen to believe that BT is also trapped by regulatory contraints which prevent it from making attractive offers (i.e. different to its published list price) to share the cost of upgrading servies to those willing to help pay. I have blogged before on why no-one should accept a first cost estimate from a telecoms engineer – and the reasons are to do with professionalism not duplicity. Hence the need for a thorough review of our approach to regulation.  

On that note, I plan to accept an invitation to visit the new incubator units along the banks of the Silicon Canal (with the symbiotic Salford/BBC and Trafford/Granada media cities) to see if their fibre links are better than those along the banks of the Fleet River or the Sewer Ditch and if so, why and how best to exploit the differences for the benefit of UK plc.



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