Is the great broadband logjam about to break? If so, who will be swept away?

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The weekend press cover for the impact of broadband on house prices came just days after DCMS updated its website on the various funding programmes and the Public Accounts Committee said that BT should be given no new money until it has better accounted for what it has already received. Meanwhile Ian Grant has drawn attention to a Broadway Partners event on innovative funding models, timed to help Local Authorities and Community groups who are scrambling to meet March 3Ist deadlines for bids for public money before it reverts to Brussels.

Why is momentum gathering?

Probably because estimates of impact of broadband on property prices have risen from "up to 5%" to "up to 20% - thus rubbishing previous claims that there is no real business case for fibre to the premises.

The case for leapfrogging BT's deficit funding model for fibre to the cabinet was neatly summarised by a Ventura speaker last year. The Rightmove Broadband Checker and the way in which those agitating for better broadband are beginning to make the necessary information available to heir communities indicate we may be on the cusp of change: with market forces riding to the rescue of regulatory failure. It will probably not be long before a commercial consortium sets about fine tuning the correlation of property valuations and broadband speeds in order to target their pitch for selling fibre to premises on those who will benefit most.   

The death of the South Yorkshire Digital region, arguably killed off by BT's spoiling tactics including the promotion of Plusnet as "Good honest broadband from Yorkshire", should not be used to make the case that a Council is safer with BT. The fibre to the cabinet model now appears likely to be leapfrogged, to short order. Its competition is no longer just Virgin Media. Newbuild players like Hyperoptic (who appear about to acquire codes powers) will increasingly offer bulk deals for fibre to the premises to property developers and housing associations. Meanwhile Gigaclear, being so often screwed over recent rural broadband projects (while winning those which go to open procurement), appears to be exploiting its link up with Fluidata to offer equally attractive deals to the business parks and commercial centres who are being left out of the current FTTC rollout as BT seeks to preserve its leased line business. In that context I note that the enablement of the exchanges serving Wapping and Whitehall has slipped by at least three months (to March 2014) and the exchange serving Smithfield is now "under evaluaton".

But BT has not been idle. It is now a serious contestant in the fight to provide backhaul for the urban wifi networks that already carry over 80% of mobile data traffic. Thus it recently won the Glasgow  contract to provide services for the Commonwealth Games akin to those which O2 provided to Westminster and Kensington and Chelsea in time for the Royal Wedding and the Olympics. I am told that the same consultancy, (not one of the big names but the kind of SME that HMG say it wishes to encourage), advised both Westminster and Glasgow and is currently helping others get value for money, from who-ever makes the best bid to meet their needs: one size of package does not appear to fit all for either supplier or buyer.

In that context, there are repeated allegations that  BT is using its BDUK contracts to cross subsidise "commercial" fibre to the premises, as in Dolphinholme. That may be unfair because it supposedly had to lay the fibre anyway to service a new 4G mobile mast. If that is correct it, in turn, raises questions about where and why state aid is really needed, given the way that  markets are changing.

Meanwhile, it should be a no-brainer for the government to enable and encourage landlords and property owners tenants to club together to cover the cost of providing "fibre to the flat" and "fibre to the workshop"where this is less than it adds to the value of homes or business premises. It risks handing thousands of votes in marginal constituencies to the opposition if it fails to do so. And that is before considering the electoral (as well as moral) value of facilitating the provision of "real broadband" to those in social housing at risk of social exclusion (see "How Rural is Shoreditch").

I remind readers that this blog is called "When IT Meets Politics"  for a reason.

In US pork barrel politics it is common for candidates to use broadband plans to win the support of those concerned about jobs and property values in their constituency. We may be about to see the first local government elections in the UK where the broadband vote becomes a serious factor.   

Those at risk, when the log jam finally breaks, include politicians and regulators as well as those caught defending obsolete business models and technologies rather than finding niches and/or surfboards (large or small) which will survive or ride the waves of change.

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3 Comments

Another blog for our history books. Spot on. When are they going to see the emperor has no clothes and listen to the people they work for?

The wind of change is indeed blowing.

Interesting item. From my work, I think we can expect to see business parks supported by a new range of niche service providers - filling the important gap between inadequate ADSL services and unaffordable private circuits. The Super Connected Cities programme is injecting funding to help this market develop, and that may be sufficient - since there is genuine demand to maintain the commercial model following the funding availability.

Personally I don't think we are close to seeing fttc "leapfrogged" any time soon by better technology. What concerns me is that most alternatives are focusing on the same commercial areas as BT's BDUK funded fttc rollout - arguing about who can have how much of the market share.

Recent reports have focused on how many are going to get superfast speeds from fttc rollout.

The current requirement (in my view) is to establish a commercial model to take superfast broadband into areas beyond the reach of fttc - not simply providing something a bit faster for people with a bit more money.

All the alternatives I know are not focussing on the commercial areas they are trying to help people who still haven't got 1st generation broadband. We have already proved that with support at the start this can be accomplished. We raised the money from within the community, but could do far greater work if we had support from the government. So could a lot of other altnets. So far this has not been available, simply because government has fallen for the BT hype.
Super connected cities is a joke, they shouldn't need funding. Even a small village is viable to connect to a proper fibre network, as gigaclear are proving and as we have done.
The altnets are simply asking for their white areas to be declared so they can apply for the funding for them. The councils won't release the data, so BT have the upper hand and stop all innovation and competition. A log jam.

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About this Entry

This page contains a single entry by Philip Virgo published on March 4, 2014 10:17 AM.

How rural is Shoreditch, our supposed technopolis? was the previous entry in this blog.

The social contract behind the Internet is broken and there is a conspiracy of silence over self-protection against all-pervasive surveillance is the next entry in this blog.

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