BSG comment

Gigabit Connectivity to New Build

Mandating the provision of fibre connectivity as standard in new build developments has been a longstanding policy priority for BSG and we responded to the DCMS consultation in December 2018. We welcome this week’s announcement that developers in England will now be required to install gigabit-capable infrastructure and, subject to a cost cap, a gigabit-capable connection. This will deliver internet speeds 200 times faster than you would need to watch an HD film on Netflix. (more…)

Ofcom’s proposals for stimulating greater investment in fibre broadband

Ofcom has published its first combined five-year review of Wholesale Fixed Telecoms regulation which maps out how it will regulate Openreach between April 2021 and March 2026 for both the residential and businesses connectivity markets (previously the regulator separately assessed the Wholesale Local Access Market Review of residential, and the Business Connectivity Market Review).

Ofcom’s four-point plan aims to support competitive investment in fibre networks and competition in gigabit capable services, ensuring world class broadband services are available to as many people and businesses as possible.

  1. Improving the business case for fibre investment. In more urban areas, Ofcom proposes that the wholesale price that Openreach charges retail providers for its entry-level (40 Mbit/s) superfast broadband service is capped to inflation. This follows a cut Ofcom made to this product in its 2018 review. Ofcom also proposes that Openreach can charge a small premium for regulated products if they are delivered over full fibre. Openreach’s fastest fibre services will remain free from pricing regulation to support the investment competition between network builders.
  2. Protecting customers and driving competition. Ofcom will ensure that people can still access affordable broadband by capping Openreach’s wholesale charges on its slower copper broadband services. Openreach will be restricted from being able to offer discounts that could stifle investment by its rivals.
  3. Taking rural areas into the fast lane. In rural areas where there is no prospect of multiple networks being built, Ofcom will support investment by Openreach which is the only operator with a large-scale rural network, by allowing it to recover investment costs across the wholesale prices of a wider range of services, reducing the risk of its investment. If BT provides a firm commitment to build fibre in these parts of the country, Ofcom will include these costs in its prices upfront. If not, Ofcom will only allow it to recover these costs after it lays new fibre. The UK Government is planning to invest £5bn to reach the most challenging 20% of the UK and is working closely with Ofcom on its plans for this.
  4. Closing the copper network. Ofcom plans to remove regulation on Openreach’s copper products in areas where full fibre is built to support the migration/switching of customers to the new fibre network. Ofcom will be transferring its regulation – including price protections – from copper to new fibre services.

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Goals for a Gigabit Europe

A WIK conference held last week in Brussels sought to examine the likely impact of the recently agreed EU Electronic Communications Code especially as regards the EU’s goal to be a Gigabit society with greater fibre deployment, in line with the UK’s ambition to see nationwide full fibre roll out by 2033. The Code once fully adopted will have a two year time frame before the new rules will apply across Europe.

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A long read – Forging our Full-Fibre and 5G Future

The Government has announced the conclusion of its Future Telecoms Infrastructure Review. The Review which was announced in the Industrial Strategy sets out the targets and overall policy framework for the sector for the next 15 years.

The headlines are a confirmation of the Government’s targets for full fibre coverage to reach 15 million premises by 2025 and full coverage by 2033, with 5G coverage by 2027. The targets and accompanying policy shifts – in particular the change in competition models – mark a significant evolution in the Government’s approach.

Commenting on the publication of the report the BSG’s Chair, Richard Hooper CBE, commented The BSG welcomes the Government’s publication of its Future Telecoms Infrastructure Review and is pleased to be playing a useful role in barrier-busting in implementing fixed and mobile networks, and in PSTN switch-off which is the important precursor to fibre switchover.”

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Forging our 5G Future: Barriers and Solutions to network deployment

The Broadband Stakeholder Group has published a report on ‘Lowering barriers to 5G deployment‘. It outlines the challenges and solutions to deploying new mobile infrastructure necessary to meet the UK Government’s ambition to be a 5G leader.

The report – ‘Lowering barriers to 5G deployment’ – is the outcome of a study by Analysys Mason researching barriers to 5G deployment from both industry and local authority perspectives in the UK, identifying key challenges faced during the deployment process. The report aims to assist the UK Government in delivering its ambition to be a 5G leader by identifying and proposing solutions to current and potential barriers to network deployment.

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Is there a bigger role for satellite in the UK broadband market?

Satellite broadband hasn’t really taken off in the UK in the way that we might have expected it would 10-15 years ago. There are many reasons for this, both technical (latency issues affecting video calling and gaming applications and the potential for weather related outages) and economic (expensive terminal equipment and relatively high ongoing data costs).

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Silver linings in failure: Benefits of the MIP

I’ve written before about why the Mobile Infrastructure Project (MIP) failed to live up to its expectations. In summary, building infrastructure is hard in any case and it’s even harder when neither the problem you want to solve nor solution are agreed upon by the parties involved. Last week though the Government published the Mobile Infrastructure Project: Impact and Benefits Report so it’s only fair to pay attention to the benefits that it delivered too.

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BSG Comment – What does Brexit mean for the UK telecoms industry?

There is no straight answer to this question. The scale of the risks and opportunities for the telecoms industry depends on the future relationship between the UK, the EU and the rest of the world. The ramifications of decades of EU legislation, policies and initiatives in the UK system are difficult to untangle. However, it is possible to identify immediate concerns for the industry and how these could be tackled.

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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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BSG Comment: Government pushes towards a Fibre and 5G Future

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.

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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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Business rates revaluation will hit broadband infrastructure providers…and ultimately consumers

The Valuation Office Agency (VOA) announced last week a fourfold rise in business rates (taxes on the value of real estates) on some major infrastructure providers’ bills. The revaluation was judged “excessive??? by BT, whose Bill increases from £165m to £743m per annum,  who added that the increase in rates will likely lead to higher prices for consumers and businesses. Virgin Media echoed BT’s concerns on the likely negative impact of the increase on future investment decision in telecoms infrastructure.

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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…