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Next week the Minister will invite “industry” to make suggestions on how it can help Broadband Delivery UK, our newest Quango, to deliver the Universal Service Commitment. Two nights ago I was discussing the fate of past DTI/BIS attempts to invent new ways of addressing old problems, including with Tony Ballard, Partner, Harbottle & Lewis LLP. Tony suggested we bypass BIS, DCMS and all who wish to reinvent square wheels and build instead on one of the UK’s greatest success stories. I asked if he would do a guest blog on the idea. Below is the result.
“Broadband Delivery UK has been created within BIS as a delivery vehicle for the Coalition Government’s policy to bring two things to those parts of the country that are poorly served by the market – superfast broadband access on the one hand and basic broadband at 2Mb/s on the other, the latter having been described in the Digital Britain report as a Universal Service Commitment or USC. It is having an “Industry Day” next Thursday 15 July which 260 people have signed up to attend but to save costs it is holding the event in a room that takes only 150, so some who wished to contribute to the debate, including your blogger, are disappointed.
“If, as we are told, 15% of UK homes are geographically excluded from a 2Mb/s service, how are they to be served to fulfil the USC? The plan is for public money, or at least the BBC’s underspend on its provision for digital switchover in its licence fee settlement, to be made available, probably by BDUK or an SPV incorporated by it, to procure the building of the necessary facilities. If BDUK cannot even afford a large enough room to accommodate industry representatives to discuss the matter it seems unlikely that it will find any finance other than what it can take from the BBC, assuming that the BBC has not spent it and does not decline to hand it over when the time comes. But quite apart from the source of finance, is the project not misconceived anyway?
“It involves a procurement quango. This is no doubt because putting upgrade obligations directly onto network operators would cause difficulties under the European framework regime for telecoms regulation, including the Universal Service Directive. But perhaps officials should think outside the box. The Directive does not apply to the BBC. And the principle of universality is not unknown outside the telecoms sector. Indeed it is one of the guiding principles of public service broadcasting. As telecoms and broadcasting converge, why has this not been brought into the debate?
“BBC programmes are being delivered in increasing quantities over the internet, at least to those homes which have a basic broadband connection. The BBC does not pay for delivery, notwithstanding protests from ISPs about the effect on their backhaul networks, an increasing proportion of the capacity of which is used to convey television programmes to their users. This contrasts with the delivery of the BBC’s scheduled services over the network of terrestrial transmitters, the cost of which falls on the BBC through its contracts with the transmission companies.
“The BBC’s recently renewed Charter commits it, among other things, to helping to deliver to the public the benefit of emerging communications technologies and services in promoting its other services. This is no ancillary matter but one of its fundamental public purposes, embedded in Articles 3 and 4 of the new Charter. And it is reflected in its current Statement of Programme Policy which says that the BBC will ensure not only that all its services remain universally available but also that they will be accessible through new media as relevant technologies develop.
“If, then, the BBC were to pay for network upgrades that would enable the 15% of not-spots around the UK to access its online services, it would be doing no more than it already does in relation to its scheduled services, it would fulfil its Charter commitment to deliver the benefit of emerging technologies and services and its Policy commitment to make its services universally available and accessible through new media. At the same time, the internet being an open platform, it would enable basic broadband access in the not-spots which is one of the objectives of BDUK and the USC. It would have other advantages too.
“First, it would not be necessary to extract money from the BBC and all that that means in terms of a precedent as to ownership of the proceeds of the licence fee and the hypothecation of its revenues. The BBC would be spending its own money on its own project.
“Second, there would be no need to assemble within BDUK or its SPV a procurement group that merely duplicated the group that already exists within the BBC, as well as technical advisers of the kind already in position in the BBC. The creation of an unnecessary quango would have been avoided.
“Third, if the BBC were contracting for the upgrades, it would be increasing the reach of its online services, serving its own purposes as a public service broadcaster and more able and better motivated to monitor delivery as it has an ongoing remit (and funds) to do so.
“Fourth, harnessing the public service principle of universality to basic broadband delivery, in effect using the broadcasting regulatory regime to achieve a telecoms objective, ought to be embraced as an example of convergent regulatory thinking.
“But it is more than this. Looking at Articles 3 and 4 of the Charter, have not the BBC’s public service obligations not moved on so to embrace online delivery as to make funding access to basic broadband in not-spots an implicit requirement, comparable with the funding of delivery of its scheduled services?
“This is not to suggest that the BBC should itself instal fibre, build base stations or rent transponders on satellites, nor that it should become an ISP. What is suggested is that it should devote a part of its budget, beginning with the underspend on switchover, to intelligent (and no doubt competitive) contracting with network operators for them to build or upgrade facilities to enable the general public in the not-spots to access the internet core at USC speeds. How that would be done, whether by way of fixed, mobile or satellite facilities or a mixture of them would be a matter for the network providers. It would to some extent be a pump priming exercise since it is likely that the not-spot service would at some stage become self-sustaining.
“Most of all, it would replace what could be a shortlived and underfunded quango with an organisation with the resources and incentive to make efficient use of the available resources to solve this basic broadband deficit. Among other things, the savings for BIS would enable it to host a larger room in future for ideas of this kind to be canvassed.”