This weekend saw two big developments in the bid to create a Broadband Universal Service Obligation (USO) with the Government launching its consultation on the design of a USO and BT making a voluntary offer to deliver this service.
Last week Ofcom published its first report to the European Commission under the ‘Connected Continent’ Regulation (2015/2120) on how UK operators are complying with the new Net Neutrality rules. The report was split into five sections on; quality of Internet Access Services, safeguarding open internet access, traffic management, transparency measures and complaints and remedies. Overall, Ofcom found no major concerns although it did highlight some points that merit further examination. (more…)
Universality and Value for Money: Government Options for Designing the Broadband Universal Service ObligationMatthew Evans
The Broadband Stakeholder Group (BSG) publishes report on the design considerations for a broadband Universal Service Obligation (USO)
- Designing the USO is extremely complicated but the cost threshold for each premise is extremely sensitive
- BSG research shows that a cost threshold of between £1500-3000 maximises the net public benefit to the UK
- To maximise the number of premises that can get access to good quality broadband through the USO demand, aggregation is needed
- Where the cost of connecting premises is above the cost threshold then an alternative measure should be made available
The Broadband Stakeholder Group (BSG) has today launched Impact of a Broadband USO in the UK, a report commissioned from Plum Consulting to analyse the impact of the design considerations of a potential broadband USO in the UK. This report complements the technical advice produced by Ofcom in December 2016 for Government.
The Government today launched its Digital Strategy that aims to create “a world-leading digital economy that works for everyone???. The overarching goals of making Britain the best place to start and grow a digital business, trial a new technology, or undertake advanced research are admirable and ones that the BSG supports.
Ofcom today published their technical advice to Government on the design of a broadband Universal Service Obligation. Ofcom were instructed to deliver its “views, evidence-based analysis and…recommendations??? by John Whittingdale, then Secretary of State for DCMS, in March 2016. It has certainly delivered on the first two although in making clear that designing a USO is complex, it only offers a few recommendations. It will now be up to Government to make some of the thornier policy choices.
The National Infrastructure Commission today reported back to Government on how to ensure that the UK can become a leader in the deployment of 5G and take early advantage of the applications that it may enable.
The core finding of the NIC is that mobile connectivity is essential and that the market, as currently structured, will struggle to meet these two objectives on its own and that the whole of Government must work with industry to deliver on them.
Ofcom announced this morning that it was going to force Openreach to legally separate from BT Group.
The Government has briefed that it will be unveiling two new programmes in tomorrow’s Autumn Statement to make good on its view that the future is fibre (to the premise variety) and 5G. The BSG welcomes this focus on digital connectivity. All BSG members believe that good quality broadband underpins, drives and improves our society and economy.
It’s fair to say that the UK’s experience of community led broadband schemes has not been evenly distributed. The work of B4RN and others is nothing sort of transformational but there have been other examples of networks collapsing under financial strain or more often simply never getting off the ground. Their reputation was further tarnished by the unsuccessful Rural Community Broadband Fund. One of the complaints from communities was that there were few easily accessible case studies and tutorials. BDUK have now rectified this with a good portal containing case studies and guidance.
The first lines of Matt Hancock’s speech to Broadband World Forum last week weren’t shy in setting out the general theme. Hancock’s previous speeches had shown that more than most, he ‘gets’ the role that technology can, does and may play in all of our lives. So did his predecessor Ed Vaisey. But what marked this speech out was an unapologetic focus on fibre; as he described it, the future.
A recent study (h/t Computer Weekly) on the economic impact of London’s superfast broadband connection voucher scheme shows that it could bring a £3bn boost to London SMEs within two years. Carried out by Adriot Economics, and supported by Point Topic, The Fifth Sector and Manchester University, the evidence comes from around 500 of the 12,000 London businesses who benefited from the scheme.
The SME Connection scheme was launched in late 2013 as part of the Super Connected Cities scheme. Despite some initial teething problems it quickly picked up speed, benefiting from an advertising push and a streamlined application process that included the ability to aggregate vouchers. When it closed in October 2015 55,000 vouchers – a one-off grant of up to £3000 – had been issued to SMEs in over 50 cities with over 700 suppliers taking part.
This report is the first to attempt to undertake an economic analysis of the scheme – something which the BSG called for in our Small Business Connectivity Requirements Report last year. London’s scheme allocated £18m over the two years with an average cost of £1,500. This resulted in an average speed increase from 15.9 Mbit/s to 86.6 Mbit/s. The range of services delivered can be seen in the graph:
In the short to medium term this resulted in increased efficiency and sales. It also resulted in productivity gains from staff time savings and increased ability for home and mobile workers. The report also identified longer term gains in terms of using this time to increase skills – and having better access to online courses.
On a conservative basis this should provide a boost of £3bn in the first two years and an additional £4bn over five years if the latent productivity gains are realised. In terms of Gross Value Added, the economic benefit is estimated to be £430m for Greater London and an additional 8,118 jobs. That’s an extremely impressive £23 GVA per £1 invested and a cost per job of £2,200.
The report doesn’t cover additional economic benefits such as those delivered to the suppliers, nor the extent to which it stimulated the market to deliver superfast broadband services (in fairness a non-trivial task).
Whilst the report was just focused on London and, by the author’s admission, survey results are still coming in – it does seem to beg the question of should Government have stopped the scheme when it did?
In fairness, Ed Vaizey made clear to the CMS Select Committee’s Inquiry into World-Class Connectivity he wanted the scheme to carry on – he was just unable to get the Treasury to agree. That’s not to say the scheme was perfect – whilst it was born out of the Super Connected Cities Programme, SMEs in rural areas would arguably benefit even more from such a scheme. But it was still a scheme that seems to be delivering economic benefits, popular amongst SMEs and broadly welcomed by the telecoms industry. With loud noises of industrial strategy and regions pushing the message that they are open for business, don’t be surprised if we see this revived in some form…
Urban Connectivity: The Demand and the Challenges
12 October 2016 10.00-17.00
techUK, 10 St Bride St, London, EC4A 4AD
The UK’s cities are determining factors in our economic well-being, helping to drive growth and create jobs. By their nature they require resilient, high capacity and high quality infrastructure. This applies to digital communication networks as much as it does to transport infrastructure. Indeed, it may shortly matter more.
The Digital Economy Bill was announced in the Queens Speech today, intended to “make the UK a world leader in digital provision – a place where technology ceaselessly transforms the economy, society and government???. For the telecoms sector it aims to make it easier to deploy communications infrastructure whilst empowering consumers.
The European Commission today announced that they were blocking the proposed takeover of O2 by Hutchinson (Three’s parent company) due to the strong concerns that it has over the impact that this merger would have on competition in the UK market.