This week has seen a variety of calls to use infrastructure investment prevent the UK from sliding into a post Brexit recession. Most of the suggestions, (except possibly for an extra runway at Gatwick and restarting the electrification of the Northern railways), are unlikely to produce any results, whether spend or benefits, before the Brexit negotiations are complete.
The exception is investment in upgrading the UK’s Broadband infrastructure. Results could be almost immediate, provided the confused situations on access and wayleaves and on building regulation and planning processes can be rapidly sorted – removing 12 -18 months delay (on average) from almost any project (however modest).
Voluntary co-operation will achieve more, faster than coercion
The most obvious way of achieving this is not, however, government action. It is voluntary co-operation between a critical mass of property owners (wanting a choice of world class access services for themselves and their tenants), network operators (willing not only to be good tenants but to ensure they are not let down by their subcontractors) and local authorities (willing to ensure co-operation between their departmental silos as well as with their peers). Hence the programme of “co-operation between the willing” that I am trying to promote via the Digital Policy Alliance and members like the Federation of Communications Services, SOCITM, JISC and the Grids for Learning as well as those with direct commercial interests as users or network or technology suppliers.
Why not use the “system” to address business rates?
There is a similar case for addressing the disproportionate impact of business rates on small projects. More-over, were the costs and uncertainties of delay and of rates to be removed, the business case is commonly such that there is no need for public funding. Ensuring rapid action on business rates, for example a “de minimis” exemption until there is evidence of income on which a valuation can be based using a predictable formula. The process would, however, be so much simpler if more network operators would supply actual costs and revenues instead of historic fictions. The last attempt at reform failed because so few were willing to do so, despite my attempt to publicise the opportunity in this blog.
Who benefits most from the current confusopoly?
Why is the situation on access and wayleaves, the electronic communications code and business rates and what service can actually be offered where (given the state of the local networks and backhaul available) – so confused?
Partly because, until recently, it was irrational for the largest player to cannibalise its captive leased line and reseller markets or to do anything other that use all means possible to delay investment in rival networks. Supporting the creation and prolongation of a consultant driven “confusopoly” was therefore in its interests.
That may have changed.
What is the evidence for a change in BT’s motivation?
The evidence is not in the BT statements made in response to threats to separate Openreach. The process of separation could be used to paralyse investment for years. More-over much of the BT backhaul infrastructure, critical to both fixed and mobile communications, is not part of Openreach anyway.
The evidence is in BT’s appointment of their top engineer to run Openreach in place of the previous accountants and marketing men.
The evidence is in the doubling of his preventive maintenance budget
The evidence is in the BT programme to reskill its engineers to handle fibre technology and the expansion of its apprenticeship programmes.
Above all the evidence is in the restarting of a fibre roll-out programme that was cut back as unaffordable at the time of the original negotiation of the BDUK state aid programme.
The competitors to BT are, however, highly suspicious as to how far its behaviour really has changed.
The exclusion of public networks from the common access and wayleaves package negotiated so painfully over the past year or so with London’s main property owners is seen by some as a telling sign. More-over few will believe it is serious about allowing others to access its physical infrastructure on equal terms unless and until it has processes in place that enable it to make serious money from doing so – and its staff are motivated and rewarded for helping it do so.
How do we ensure BT has a good business case for to help bring forward investment to bridge the Brexit Gap?
I have been organising meetings to produce a six point plan to present to ministers to use the opportunity of Brexit to transform the climate for investment in full fibre broadband and help reduce the risk of a post Brexit recession. Success requires that BT has a good business case (i.e. not just regulatory pressure) to offer partnership deals to its competitors that enable all sides to improve shareholder return by growing revenues faster than costs and prices are falling.
The need for resilience and security (and therefore multiple sourcing without single points of failure) for a “smart society” should provide a wide choice of business models for achieving this.
Its about culture and motivation not “mere” regulation
My views on the Openreach debate were summarised 280 years ago by Alexander Pope “For forms of government let fools contest, what’s best administered is best”. The form of any separation arrangement is less important that the vigour and rigour with which Ofcom polices the behaviour of BT as whole – particularly the converged infrastructure operations supporting EE and the , yet to be created, local internet exchanges that will be needed by every would-be smart city.
If you would like to contribute for the Conservative Technology Forum “Six Point Plan” exercise why not post a public comment to this blog to help stimulate public debate. I should warn readers that those who e-mail me direct (or contact me via Linked In) are likely to be asked how they will help implement their suggestions.