Chapter 3 Paragraph 59 of the House of Lords Communications Committee report looks like the coup de grace for the BDUK framework. “We endorse the Commission’s suggestion that open access to dark fibre at the cabinet-level be introduced as a condition of BDUK’s umbrella state aid permission.” It looks narrowly technical, compared to the call for digital hubs, let alone the headline stories on lack of focus or rural broadband picked by the BBC or Telegraph . It goes, however to the heart of whether the UK is to have globally competitive networks, built, maintained and operated to international standards or is to fall further behind, as a state-planned, regulated and subsidised backwater.
The report continues “Accordingly, not least in order to expedite its own programme, we recommend that the Government incorporate open access to dark fibre voluntarily as a feature of its Framework agreement with suppliers. More broadly we endorse and invite the Government’s view on the European Commission’s conclusion on the broadband investment environment that “securing truly equivalent access by alternative operators to incumbent networks is probably the most important guaranteee of sustainable competition, on existing and new networks”.
At this point I part company with their Lordships. It is not that I disagree with their recommendation or that of the Commission with regard to terrestrial broadband services to the domestic consumers. It is that the world has moved on. Our incumbent operators risk being left dead in the water, leapfrogged by alternative operators cherry-picking financial centres (like the City of London) and high tech hubs (like Shoreditch or Soho), linking them to their global peers but not to the rest of the UK. BT and Virgin also need help – including to share the cost of infrastructure investment with other utilities, from the mobile operators to power, gas, oil, water and transport – all with their own communications networks and plans.
More UK teenagers now access the internet, more often, over Everything Everywhere, Vodafone, O2 and 3 than do so over the myriad of ISPs who resell BT local loops. A mix of Local Authorities, Health, Education and Transport agencies plus players like Arqiva, Babcock, Fujitsu, Sky and Thales now build, own and/or operate at least as much of our communications infrastructure as BT does in-house.
Local and Central Government are looking to move the bulk of its employees onto PSN compliant networks, both fixed and mobile, to help cut 20 – 30% out of service delivery costs. They cannot afford to waste time or money waiting for a dead-end alternative that has been blocked by the Commission and condemned by a Select Committee.
Business has to compete with overseas competitors whose local supply chains are increasingly based on gigabit links, including to their homeworkers.
Now let us add-in the plans for smart meters and smart cities, from the modest UK TSB competition and the EU SETIS initiative to the work of leading edge UK companies with those who take the future seriously, like the Chinese.
To summarise: I believe the Lords are correct in their analysis and have come up with a relatively simple way of enabling ministers to save face by focussing the BDUK framework on access and inter-operability rather than nominal speeds. However the world has moved on and the time has also come for “Infrastructure UK” to purge and merge the relevant operations of DCMS, DECC and BIS and make the UK a location of choice for pension and wealth funds, not civil servants, to pick winners. We need business models that are attractive for the Ruritanian Teachers Pension Fund, the Sheikyamoni Sovereign Wealth Fund and the Borchester 500 Club. In short: we need to allow market forces to compensate for regulatory failure.