Broadband speeds

Ofcom passes the USO back to Government

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.

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The NIC focuses on 5G

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.

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Advertising Standards Authority research confirms need to review standards for advertising speed claims

The Advertising Standards Authority (ASA) published yesterday research into consumers’ understanding of broadband speed claims made in adverts. The study was commissioned following growing concerns that consumers were misled by adverts for broadband services citing headline speeds that customers did not actually receive. The research conducted by consultancy GfK found that connection speeds were still the predominant factor for the majority of consumers when choosing a service and that a majority expected to receive the maximum speed advertised.

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Fibre and 5G are the Future

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.

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Increasing transparency of businesses broadband speeds – Ofcom’s voluntary Code of Practice for ISPs comes into force

Under the new voluntary Ofcom Code, Internet Service Providers commit to give businesses “clearer, more accurate and transparent information on broadband speeds before they sign up to a contract”. If the promised upload and download speeds fall below the guaranteed levels, businesses will be able to leave their contract with no penalties. The Code was launched earlier this year but comes into force today.

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Comparison website finds that 77% of UK businesses are satisfied with broadband but downtime remains a problem

The Broadband Genie annual business broadband report published today found that 1.5 million businesses in the UK (23% of all businesses) encounter broadband issues at least once a week, costing them on average £904 for every hour broadband is down. The broadband comparison website surveyed 500 firms from across the UK and also found that nearly half of businesses have no dedicated staff responsible for resolving issues with a broadband connection despite expenses costing between £1000 and £5000 per hour for 16% of businesses.

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European Commission unveils plans to create a European Gigabit Society

The European Commission published yesterday its proposals to achieve its vision for a European Gigabit society with ambitious targets from 5G coverage to access for all European households (rural and urban) to internet speeds of 100Mbit/s by 2025. Legislative and policy proposals include a review of the EU regulatory framework for telecoms, an Action Plan on 5G connectivity and new financial instruments as well as additional public funding for a WiFi voucher scheme that will benefit 6000 to 8000 local communities in the EU by 2020.

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SME Voucher Connection Scheme – an economic success story?

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:

Adroit E Download Speed of new SME service

 

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…

Digital Economy Bill begins the legislative process with first reading in House of Commons

The Government have today introduced the Digital Economy Bill to Parliament as part of its ambition for the UK to be the most digital nation in the world. The Digital Economy Bill (HC Bill 45) sets out the framework for the introduction of a Broadband Universal Service Obligation (USO), includes new powers for Ofcom, seeks to reform the Electronic Communications Code and also sets out new consumer rights.

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