Reports of poor internet connectivity for startup tech companies in London’s Tech City have been circulating for some time.
The lack of high-speed fibre-optic broadband is said to be having a dramatic effect on the prosperity of Tech City’s startups.
Back in May, Computer Weekly asked whether Tech City was capable of delivering reliable, fast internet connections for startup businesses. But the problem still continues, as startups told The Guardian last week, bringing the subject to the fore once again.
But who is to blame? The government? The broadband suppliers? Property managers or even the startups themselves?
Where is the problem?
The problem is affecting a cluster in east London, surrounding the Old Street roundabout. The Tech City area – or Silicon Roundabout, as it is known – has been reported to be suffering a severe lack of high-speed internet access.
Anthony Impey, MD of Optimity and a Tech London Advocate who runs the network’s infrastructure group, has been based in the centre of Tech City in Shoreditch for 10 years. He has seen the area change from a warehouse district to a high-tech centre over a short period of time, and many people have complained to him that the broadband connection is not fit for purpose.
“People are making their decisions over whether to move in or out of the area based on whether the buildings have high-speed connectivity or not,” said Impey.
“Some of the buildings can’t get even basic connections. Some people have been struggling with 400Kbps upload – that’s back to the world of dial-up connectivity.”
Suppliers speak out
Suppliers of internet services often take most of the blame for poor connectivity, but many say they are in talks with government over to how to get faster internet into the capital.
Virgin Media Business is in discussions with the Department for Culture, Media and Sport and the Department for Transport about moves to allow more innovative deployment of broadband networks, such as narrow trenching, a technique of installing fibre-optic cables in a much less costly and labour-intensive way by digging shallower trenches in which the cables sit.
More on Tech City and startups
- Can Tech City deliver reliable fast internet for startup businesses?
- Talent shortage is threatening growth of London’s tech sector
- Tech City: 27% of London job growth comes from technology
- Tech City startups looking elsewhere due to London costs
- Tech City startups struggling to acquire capital for further growth
- Tech City needs second-stage investment and more space, says Huddle CEO
- Startups will struggle outside London, says Mind Candy
- Interview: Gerard Grech, CEO, Tech City UK
- Joanna Shields joins the government’s digital revolution
- Interview: Joanna Shields, CEO, Tech City
“Narrow trenching would cut the cost of deployment by one-third, and micro-trenching would reduce it by two-thirds,” said a Virgin Media Business spokesperson.
Meanwhile, the telco provider has partnered with Hackney council to launch free, unlimited public Wi-Fi in central areas across the borough, as well as THECUBE initiative, which provides SMEs with flexible access to business-grade internet.
But the startups that can actually access fibre-optic connectivity may not be on the right package, said Joe Garner, CEO at Openreach at a roundtable last week. Startups are suffering with poor connectivity in Tech City because many are buying consumer products and packages, he said.
“This is primarily an issue of price,” said Garner. “And I do understand that a startup would rather pay £25 rather than £250. But I would ask: isn’t your internet access worth that?”
BT told Computer Weekly it had no plans at present to offer a cheaper business product at a price that would be more attractive to smaller startup companies.
Tech City and BT
In May, Gerard Grech, CEO of Tech City, said he was aware of the problem affecting this area of east London and was talking to suppliers on behalf of local businesses. He met 70 members of the tech community and the CEO of Ofcom to collect data to build a clear picture of the broadband black spots and encourage telcos to fix the problem quickly.
Telecoms giant BT believes fibre to the remote node (FTTRn) could solve Tech City’s problems and a trial of this technology in the area has just been announced.
Fibre is more commonly delivered either to street cabinets (FTTC) or direct to the premises (FTTP), with FTTP generally offering faster speeds. A smaller version of a cabinet, FTTRn is essentially a halfway house between the two, and can be mounted on existing street furniture to bring faster connectivity to premises on long lines in rural areas or ‘exchange only’ lines in rural and city centres.
FTTRn may be able to get fibre broadband to black-spot areas, but it is too soon to tell if it is the right solution, so BT plans to conduct a small-scale trial in the autumn with selected Tech City startups.
Tech City UK said the trial will be completely owned and managed by BT, which will decide on the location and number of companies involved in the test. But Tech City will ensure digital businesses are aware they can apply for the trial and ensure their needs are well understood.
But FTTRn, like FTTC, still relies on copper to complete the last part of the journey to premises. Fibre is used to take the internet to the remote node, and then copper is used towards the end of the broadband journey.
As much fibre as possible
Julie Kunstler, principal analyst at Ovum, said she is seeing many combinations of fibre and copper in broadband offerings, but to get the most improved bandwidth, as much fibre as possible should be used along the line. “But if the last 100 metres needs to be copper, at least you’re bringing more fibre closer,” she said. “Fibre all the way is best, but it gets very expensive to do it after buildings are built.”
Kunstler pointed out that in China, the government insists that all new buildings are built with fibre.
She added that it is important for technology startups to have very high-speed bandwidth to have a competitive advantage. “This is why some governments have really pushed for broadband from telco providers, because they understand the huge competitive advantage it gives them.”
She also said there is a debate about what should be a standard superfast speed, with some countries, including the UK, describing superfast as 24Mbps, while others believe 50-100Mbps should be the standard. In the US, Google is deploying fibre to the home in some cities at 1Gbps.
“Every person has their own opinion on how much is needed,” said Kunstler. “But for high-tech companies, 30Mbps is not efficient.”