When IT Meets Politics

Mar 28 2016   7:42PM GMT

Government Digital Strategy and universal service obligation offer opportunity for rethink

Philip Virgo Profile: Philip Virgo

Tags:
10Mbps
Akamai
Apple
Atos
BBC
Brexit
BT
Camden
Digital strategy
Fintech
GDS
Google
London
Netflix
OTT
Salford
Sky
social inclusion
USO
Vodafone
Zayo

The government has postponed the announcement of its new Digital Strategy immediately after launching a consultation on how to fund the 10 Mbps Universal Service Obligation announced by the Prime Minister in November. Meanwhile Akamai says the average speed experienced by its UK customers is just under 14 Mbps and papers on the smart society of the future, such as the Atos “Digital Vision for London” fail to address how we will create the communications infrastructure necessary to be abreast of where the rest of the world will be in 2020 or 2025, let alone ahead. 

In 1858 after the Great Stink had made the Houses of Parliament uninhabitable,  Joseph Bazalgette was given terms of reference to build a sewerage network for London. He famously said “We are only going to do this once … and there is always the unexpected”, calculated that maximum demand anyone could envisage and then doubled the diameter of the pipes that would be needed to meet that demand.  I have previously described how BT abandoned a similar approach when local loop unbundling destroyed its business case for expediting fibre to the premises and it decided to divert funds to content instead. 

On Tuesday Sir Peter Bazalgette pointed out that Sky, BT and the BBC are spending 24% of their content budgets (over 5 billion) on content watched by 0.6% of the audience . In looking at how we will fund a 10 Mbps Universal Service Obligation we should recognize that those who think ahead (like Vodafone) are already looking at the capacity they will need to cope with a “smart society” and infrastructure providers like Zayo are already building capacity for customers who want it now to support applications, from those infuriating pop-up ads to instant response fintech. That raises the question of how to persuade them to invest in London instead of New York and in the UK instead of Germany or France (whether we Brexit or not).

I have been rightly criticised for my loose comments contrasting the approach of Salford in providing uncharged access to those willing to put fibre into its social housing  with that of London boroughs planning to charge wireless operators for access to their rooftops.The choice should not be an either/or.  The potential income from business users can be significant and used to help fund active social inclusion projects but charges should not be at the expense of the poorest in society. More-over one of the drivers is the failure of BT to provide adequate backhaul or fibre to the cabinet, let alone flat, in areas like the southern half of Camden, where it has been trying to avoid cannibalizing its leased line revenues. Now that others are beginning to install fibre anyway it has made the unsurprising announcement that it is restarting it “commercial” investment programme,   

There are a variety of business models and the return of business rates to Local Authorities  (with pilots for 100% to Manchester and Liverpool and a partial return for London) should begin the overdue process of allowing all councils to benefit directly from encouraging local regeneration.  But  until the benefits begin to flow, they face a dilemma. We need to find other ways of enabling and encouraging those who will reap the benefits to help fund the necessary investment – without further increasing the gap between the digital haves and have nots.

As with the railway booms of the 19th century the biggest benefits are not to the existing operators (whose revenues will be squeezed as were those of the owners of canals and toll roads) but to those whose land and property will increase in value and those whose communications costs  will fall nearly as fast as speed, capacity and reliability improve.
Viewed in this light, the expectations  of  Apple , of Google, of Netflix and of the other “Over The Top players” that some-one else should fund the construction of the communications infrastructures on which their profits depend (alias Net Neutrality) appears as strange as the reluctance to encourage business users and landlords to form local consortium to do so.  This may be changing as OTT players begin to support investment in local and regional broadband and internet exchanges (to improve service and reduce latency)  and network operators, like Verizon become OTT players and co-fund investment in local dark fibre networks underpinned by demand from business parks and commercial centres.
 
We need to use the opportunity of the Universal Service Obligation consultation to also take a new look at the investment needed to transition from the current heterogeneous mix of semi-incompatible, pre-internet-age,20th century fixed and mobile comm unications networks to the reliable, resilient and ubiquitous, fibre and wireless, IPV6 mesh that will underpin the “smart society” for the next few decades. 

The key questions include:

Who will benefit most from pulling forward that investment?

How do we enable and encourage them to cover the cost of doing so – and thus help lift the UK out of its current economic “plateau”?

How could/should Local Authorities balance the potential revenues from opening up access to their buildings, street furniture and other infrastructures with the need to attract those who could invest elsewhere – and what is the role of Central Government?

The exercise regarding the provision of affordable connectivity to those in social housing  which I started before Christmas (which Hyperoptic was the first to support) reinforced my view that the answers will vary – although I need to pay more attention to where wireless fits and balance the need to avoid taxing the poorest in society with the need for Local Government to raise funds from those who are able and willing to pay.
 
Almost the only certainty is that Bazalgette was right – but we do not have the equivalent of the Great Stink to concentrate the mind of Parliament. In consequence the future will belong to those communities whose property owners are in a position to work with providers to install the capacity today to allow for incremental change tomorrow, provided they can agree on mandating adherence to international inter-operability and open access standards.

But what are those standards and who is setting them, where and how?

Hence the need for the Communications Infrastructure sub-set of the Smart Society working group being put together  by the Digital Policy Alliance. The initial aim is “modest” – to identify those willing to work together across political, organisational and sector boundaries to achieve common objectives. The first meeting, hosted by the Wired Westminster Group, will focus on those willing to help encourage, extend and build on the guidance on voluntary access and wayleave arrangements and regulatory and planning advice, on which so much effort has been spent over the past year. 

Readers, especially those who disagree with me, will be pleased to note that my own role is merely to suggest who should be invited and topics that might usefully be progressed while the politicians are pre-occupied with Brexit. 

I then expect to be told, politely but firmly, to spend more time in my favourite not spot. and hope that Gigaplus Argyll will soon be able to provide a level of service at least akin to that a decade ago (before advertising and other bloatware clogged the Internet). Then I could read e-mails and even blog using a 56k modem over a 2G mast on the other side of the Loch.        

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