One of the messages from the party conferences and from the last week’s parliamentary debate is that Broadband is the fourth utility, without which modern life grind would grind to a halt and local businesses cease to be competitive. We can see that BT cannot afford the investment needed as the same time as building a TV business and buying EE, without state aid. But BT’s competitors need a level playing field, with political and regulatory stability, if they are to encourage fund managers to invest in future proof, fibre communications in the UK – as opposed to overseas.
At the Conservative Party Conference I was invited to draft an article for Conservative Councillors, to see just how many are interested in working with potential suppliers, as well as their constituency MPs to secure a choice of “world class” services before they are next held to account by their voters. Hopefully this will rapidly lead to a set of inter-locking all-party exercises to build on existing work looking at how to:
1) get full value from existing BDUK contracts, decide whether to go out to competitive tender for the next phase of investment and, if so, who to ask to make serious bids.
2) agree common access and wayleave arrangements and planning guidance – to reduce the time, cost and disruption of local infrastructure build and thus attract a better choice of suppliers.
3) improve information on local supply and demand to enable local consumers and business to make better choices, suppliers to decide where to invest and taxpayer support to be focused where most needed.
With separate groups sharing experience between those facing similar problems: remote rural communities, inner city social housing, business parks, leafy suburbs etc.
I have emphasised local supply and demand because it is becoming increasingly apparent that the oft-quoted figures form national sources are seriously misleading with regard to both what is actually delivered to current customers (or available to new ones) and what they are willing to pay for, including quality and reliability of service, not just headline speed.
But the pressure is on politicians to deliver world class services – and what do we mean by “world class“?
And what will “world class” mean by 2020 when the MPs participating in last weeks debate stand for re-election?
Virgin has just doubled its speeds in the UK and will be offering up to 200mbps but Chattanooga, where 170,000 properties already have gigabit connections, has just wound its offering up to 10 gigs for $299 dollar a month Meanwhile BT cannot supply more than a total of 600 gigs to a planned new technology park intended to compete with overseas clusters which are already served by multiple terabit pipes.
Does “world class” mean “average”: including third world countries?
If so the “superfast” services being delivered to most of the UK currently qualify – they are “average” in the sense of mediocre. By 2020 they will be well below average. The definition of “superfast” is vague. It is supposed to mean a minimum download speed of either 24 (BDUK speak) or 30 mps (EU speak). But the delivered quality of supposedly “superfast” services (allowing for contention at peak times, latency, jitter, network bottlenecks etc.) can be inferior to that of a 10 mbps leased line. The problems are not just to do with nominal line speed and can probably best be appreciated by watching an “Actual Experience” promotional video.
Or does “world class” mean “equal to the best in the world”: e.g. Finland, Hong Kong, Korea, Japan, Sweden etc.?
If so, the current definition should be “local access to IPV6 enabled, point-to-point, fibre networks, whose global connectivity is not constrained by backhaul (and other) bottle necks“. Few parts of the UK yet have such services other than, for example, Aberdeen: where IPV6 services are being offered to the oil and gas industry by IFB over the first phase of the Aberdeen Core . BT formally halted the supply of fibre to the premises earlier this year after dropping plans to make fibre to the premises available to 2.5 million properties in 2013. The announcements made just before the party conferences, including the statements by its CEO, indicate, however, that it may be about to restart the supply of gigabit services as well as winding up the speed of its fibre to the cabinet services.
Meanwhile the members of INCA, including City Fibre, Gigaclear, Hyperoptic and ITS already offer fibre to over a million premises and those that do not already offer IPV6 expect to do so by this time year, Many, including tiny B4RN, use future proof “point to point” fibre with links direct to UK’s main Internet exchanges in London and Manchester to bypass BT’s congested backhaul networks. They also claim that they can collectively use private sector finance to serve over 10 million premises by 2017 – provided they are given a level playing field.
BT has now offered to provide 3 – 500 mbps to 10 million by 2020 using gfast, with fibre to the premises available on demand. It is unclear whether the latter will be “future-proof” point-to-point or the more limited gpon). It it is also unclear whether it is also conditional on using the BDUK Phase 1 underspend and Phase 2 funding without having to bid against others after councils have gone to open tender.
BT’s rivals can currently build new networks for less than BT can upgrade existing ones because they are not shackled by interfacing with a legacy network and can co-operate with local land and property owners and/or re-use local authority infrastructure to bypass the access and wayleave charges which account for much of BT’s costs.
Meanwhile Sky has a national fibre network of its own, based on that created by Marconi using the British Waterways Board wayleaves, but it commonly uses BT unbundled exchange lines for local distribution and.like Virgin and mobile operators often has to pass traffic through regional and national choke points controlled by BT Wholesale. Hence the calls for the separation of Openreach (so that the latter’s revenues are used to improve quality of service rather than to subsidise footballers’ wages) and for reviews of its boundaries with BT Wholesale and BT Retail..
Meanwhile Sky has already transitioned over a million consumers to IPV6, without any of them noticing. It expects to complete the process by April 2016. In parallel it is piloting arrangements with other network operators, like City Fibre,to provide fibre to the home and with alternative national backhaul providers to bypass the BT controlled chokepoints, It is likely to make similar partnership deals with those like Hyperoptic (who work with landlords and property owners to provide fibre to those living in housing complexes with over 50 units), Gigiclear (able to provide rural future proof fibre for less than BT charges for “superfast”) and ITS (Hammersmith and Fulham, WiSpire etc.) now that such operations have sufficient customers to be attractive.
Meanwhile Virgin is extending its network providing mixed coax/fibre to the home, is about to double the speed at which it runs, already provides IPV6 to its business customers and expects to transition all its residential customers to IPV6 by this time next year. BT appears to have a problem with providing universal IPV6 access. It offers IPV6 to business leased lines and expects to transition domestic users of BT Infinity users with its latest routers (Home Hub 5) by next spring. I can, however, find nothing on its plans for those with older routers, “standard” broadband or for SMEs.
More-over the boundary between fixed and mobile broadband has ceased to exist in the minds of most consumers and business users: with the majority of social networking, content viewing and on-line enquiries and transactions roaming over mix of mobile and wifi. Hence the growing number of not spot campaigns and the falling demand for landline based broadband where 4G is now running reliably at 100 mpbs.
IPV6 is important for business users, particularly those producing content or “apps” or interworking closely with overseas clients and ISP partners who have already transitioned (e.g. IPV6 is already mandatory for those working on Apps for Apple ios9). Delays in availability also affect the global high tech or financial services industries because it can take several years to securely transition and test legacy systems. Those who cannot start soon will be at a serious competitive disadvantage in a couple of years as prices for IPV4 addresses (already $10) rises sharply and they are excluded from markets. As one of the UK’s fastest growing multl-media content providers put it “If we wanted to compete with Amazon, we would have to spend hundreds of millions of dollars on IPv4 address space that they got for free. IPV6 gives us a less uneven playing field.”
The advantages for consumers are less obvious although applications which have already transitioned like Facebook are said to be up to 40% faster for native IPV6 users. The same may also apply to other OTT and cloud-based services. Those using IPV4 addresses may soon have to charge extra for slower services. It is also clear that IPV4-based products and services will not be considered “world class” in 2020 .
The overall message is that, unless and until BT expands its own infrastructure investment programmes to match those of its competitors, local authorities looking to provide world class broadband access, fixed or mobile, to their local communities should be going out to competitive tender. We can argue about the competence of central government to help them, but those wishing to bid need to provide much better information than is currently available on what they offer and who has already used their products and services with what success. That information needs to be made available to MPs and Councillors while they are still deciding how to use the funds they currently have available or are about to claw back from BT.
I hope that BT will then respond positively with partnership deals that provide win-win solutions for all, including value for money for the communities currently excluded, its business customers and its shareholders.
I will blog separately on the need for a “Universal Service Obligation”, how it should be funded and the performance measures needed to make it meaningful..