BSG comment: Broadband as a utility? Be careful what you wish for
It is hard to overestimate the importance of digital connectivity in today’s society. Expectations of users – be they citizens, consumers, businesses or Government itself – are increasing as the cycle of the extraordinary becoming the ordinary speeds up. Whether it’s the commuter watching iPlayer on the train, a farmer uploading cattle movement forms, or architects storing large files in the cloud, we increasingly expect to do what we want at a time and a place of our choosing. This pull factor is matched by the increasing necessity of users to be online – from small businesses filing VAT receipts, to the discounts available online, to the increasing digitalisation of Government. In order to fulfil our potential as the world’s most advanced digital economy we will have to deliver fast, reliable broadband at near universal levels.
Industry is determined to meet this demand by expanding both the capacity and coverage of the broadband network – indeed it has already made huge strides to do so. Everyone wishes that this could be done faster and cheaper but we should be very careful about accepting that simply by designating broadband as a public utility – and regulating it as such – would assist us on the way to the goal. The UK’s fiercely competitive market has delivered drastic improvements to customer quality, and innovative solutions to boost the quality and speed of connections whilst driving costs down. All of this has resulted in some of the highest levels of take up of smart phones and broadband in the EU.
Of course, it’s important to recognise that more must be done – clearly it is unacceptable that some areas are unable to access basic levels of digital connectivity. But would reclassifying broadband as a utility help address these issues?
It may not guarantee universal availability – it is estimated that some 10% of homes are currently not connected to the main gas grid, with little prospect of many of them being able to do so. It may not deliver on lower prices either. The average monthly household spend for telecoms has fallen from £91 in 2008 to £81 today – all at a time when the availability and take-up of new technologies has increased. For understandable reasons, this is not the case for utilities. Traditional utilities have a single monopoly infrastructure supplier, with services delivered over the top. In telecoms, this may well be sensible in some areas where the infrastructure investment case is more difficult, but would we want to replicate it across the country? Doing so would threaten the competitive environment where it is healthy and undermine investment incentives for BT and Virgin Media, which are expanding their networks, as well as the innovative approaches of CityFibre and others.
Digital connectivity is becoming integral to our lives – indeed it is as important as a utility – but regulating it as such would mark a major intervention into the market, likely deterring investment, whilst adding to the regulatory burden. This is the opposite of what we should be pursuing. We should be making it both easier and cheaper to deploy and upgrade digital infrastructure by reforming both the Electronic Communications Code and providing more certainty in the planning regime.
The Government will shortly publish its Digital Communications Infrastructure Strategy which looks to outline what steps are needed to guarantee the right infrastructure for the next 15 years. If this combines a clear public policy objective with supportive policy and regulatory conditions there is every reason that the market will meet that objective. This type of long-term strategy, developed in consultation with industry, is the way to build a successful network for the future, rather reaching for seemingly easy but poorly understood solutions.
This article by BSG CEO Matthew Evans was published by Total Telecom: http://www.totaltele.com/view.aspx?C=0&ID=489056
