City Centre creative Industries crippled by crapband as the rural revolution begins to gather pace

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My recent blog entry on the way BT is cutting its spend on broadband  roll-out in order to fund its price war on content triggered some interesting feedback. I was told that since then Whitehall has been given a date for Fibre to the Premises but not to the Cabinet. Presumably that is to meet the needs of Government and the Cabinet that meets in Number 10. But Bloomsbury (aka Howland Street, beside the BT Tower), which serves the engineering practices and design house of Fitzrovia and the film-editing and multi-media cluster of Soho, still has dates for neither. Meanwhile Mayfair, serving the wealthiest community in the UK, including the homes and  headquarters of several of the worlds largest investors), now has a date (end September) for fibre to the cabinet, but not for fibre to the premises.

BT is not class conscious in its decisions as to which communities to exclude from the global information society.  It does, however, appear that I should have taken more notice of those exchanges where BT has plans to enable fibre to the premises but not to the cabinet: i.e. where we can assume it plans to leapfrog the obsolescent 21CN infrastructure that is the basis of the current BDUK contractst. It also gives me even more interest in hearing from those who see BT's slowing upgrade plans as an opportunity for themselves and not just a  problem for UK plc at the INCA conference next week.

The source who briefed me on the Soho situation was stuck with 2 - 3 megs from BT and prohibitive volumes charges from the alternatives and is moving to where he has been able to get fibre to his penthouse flat as well as to the multi-media editing suite on which his global competitiveness depends. He was vitriolic about how the current situation has come about and I am trying to persuade him to respond to the long overdue Ofcom consultation on the Business Broadband Market . Unfortunately, now that he has found a solution for his own business, he says he is too busy making up for lost time. He also tells that his competitors are also more likely to move than to "waste time and effort complaining". 

Menawhile the residents of Ravenstondale have been able to contribute an average of £1,500 per head to get fibre to the home. That is less than 10% of the value which Dunkerton believes it adds to average property values. I also find I ironic that the fibre to home exercise under way at Underriver in Kent is barely ten miles from West Malling, one of the few areas where BT offers fibre to the premises: presumably to those on Kings Hill, which was (two decades ago) to have been BT's first community-wide fibre network, serving both the industrial estate and the accompanying new-build housing developments. That project ended when local loop underbundling destroyed the business case behind BT's original broadband strategy.   

This set me to wondering what the point of leverage might be to get the UK back into the Broadband premier league. I am therefore sending a link to this blog entry to the Duke of Westminster, via the Grosvenor Estates . Leading a consortium to bring fibre to his urban, as well as his rural, properties would be an excellent (and profitable) way of not only better serving his current tenants but also benefiting future generations. It may that because he no longer sits in the House of Lords that he, and his fellow Dukes, have a longer investment perspective than any government placeman (the unelected members of the House of Lords as opposed to the elected hereditaries) or the members of the House of Commons who cannot afford to think beyond teh next elrction.

An exercise led by the Grosvenor Estates (whether or not the Crown Estates and the Portland Estates followed suit)  could enable Soho to leapfrog Shoreditch (where those over the road from high rent blocks of Tech City still have crapband) and perhap even catch up with Salford where John Whitaker's vision of using fibre as the backbone for a Silicon Canal to attract new industries and bring about urban generation was shared from the far side of the political spectrum by Ian Stewart before he became the local MP, let alone Mayor. But London has a long way to go and faces even greater challenges. In the meantime it is not just the BBC that has moved multi-media production and editing facilities to Salford.

Hence the need for an alliance of landlords and tenants to organise an all-party crusade to use the opportunity of a new Secretary of state at DCMS, a new Chief Executive at BDUK and a Chancellor who is committed to investment led economic recovery, to bulldoze the obstacles to investment in broadband infrastructure out of the way.

One of the more interesting of those obstacles is the current obsession with cross-subsidised packages of access (line, mobile or wifi) and content (sports, film, broadcast channels), the so called quadruple play, to lock customers in. We can see from the USA that without infra-structure competition the result is regulator-connived way one-way only (i.e. upwards) price revisions. We should not be deluded into thinking that the current UK price war, as players invade each others territories (Viacom's purchase of Channel 4 heralds the latest invasion), will lead to better service at lower cost - unless customers have the regulator enforced opportunity to purchase unbundled packages of access and content. That will only happen when business also has the opportunity to purchase world class access in an open market.
   
The original objectives of the organisers of the INCA event next week were relatively modest. But the juxtaposition of speakers (e.g. the new CEO of BDUK, the Head of Digital Distribution for the BBC, the Heads of Public Affairs for BSkyB and Alcatel Lucent, the CEO/COOs of City Fibre, HyperOptic, Fluidata and Gigaclear) gives the opportunity for a much more profound discyussion  I am therefore hopeful that the INCA event on 8th May will prove to be one of those seminal events which not only provokes thinking across economic boundaries but also enables players to meet and recognise the opportunity to make serious money from unleashing change by removing bottlenecks in the way of economic growth.

That said, I also look forward to seeing BT being freed from its current shackles and broken up, in its shareholders' interest (I declare an interest as shareholder since privatisation) into utility, content and systems operations.  I would, however, like to see the break up brought about by market forces, (e.g. HMG making clear that it has no objection to such a move, provided the utility operation remains UK-owned), as opposed to regulatory intervention. It was the latter which created the current fudge of semi-separation and concealed cross subsidies which deceives management, let alone shareholders, as to the true profitability of the parts.

Unless and until that break up happens, I believe that the overdue recabling of most of Britain, to enable fibre to the femto (whether wifi hot spot, street lamp, mobile mast or business or domestic router) and fixed business or home connection, is likely to be done by its competitors.  
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3 Comments

Interested in the response from the Duke if you get one!
His country seat already has a gigabit fibre from B4RN as do all his properties in Abbeystead.
Its a shame the rest of his portfolio is still stuck on copper?

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About this Entry

This page contains a single entry by Philip Virgo published on May 5, 2014 10:10 AM.

Is BT postponing broadband roll out to fund a content price war? If so, is it about to be leapfrogged by better funded competitors? was the previous entry in this blog.

If fibre to business communities has payback in months not years, why is it not happening? What is missing? is the next entry in this blog.

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