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

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.