subject: Industry 'must pay for super-fast broadband' posted: Fri, 12 Sep 2008 19:31:05 +0100
[The latest in the ongoing imbroglio over who should pay for the
construction of next-generation broadband networks. The model
suggested below will result in multiple networks. This is certainly
good from a redundancy perspective, and might even keep traffic
flowing better, but that's gonna mean a lot of disruption, as roads
are dug up multiple times, to put in another network. Also, the plan
does nothing to address the 'digital divide'. As this is not a
government-based proposal, there will be no guarantee that the
resulting services will be affordable. - Stu]
Richard Wray
guardian.co.uk, Friday September 12 2008 16:51 BST
The telecoms industry, not the government, will need to stump up the
billions of pounds needed to rollout the next generation of super-
fast broadband networks across the UK, according to the former boss
of Cable & Wireless, who was appointed earlier this year by the
Department for Business, Enterprise and Regulatory Reform and the
Treasury to look at the UK broadband market.
But Francesco Caio said the government can help reduce the estimated
£5.1bn to £28.8bn cost of installing super-fast broadband, by
coordinating the digging up of streets so that fibre optic lines can
be installed, opening up national infrastructure such as sewers so
cables can be laid and relaxing the rules on where overhead wires can
be erected.
His recommendations, which the government welcomed, come ahead of the
publication of regulator Ofcom's initial thoughts on next generation
broadband networks - which will allow consumers to download songs in
seconds and movies in minutes - later this month. The regulator is
expected to re-open its consultation with the industry by asking what
sort of regulatory regime is required to ensure next generation
networks are built over the coming decade.
Caio said there has yet to emerge a service that cannot be delivered
over current broadband networks but as more and more devices are
produced that can access the internet, the need to install networks
that can run at much faster speeds will increase. The government
needs to keep a watchful eye to ensure investment is made, but does
not need to bankroll broadband.
"In my view the case for major intervention now is weak at best," he
said. "It is true that the UK has a lower number of homes connected
through fibre (optic cables) than other countries, but I think we
should take a rather more articulate view of how broadband is used,
what there is today and how the system is evolving, as opposed to
just counting the number of fibres there are in the ground."
He said next generation networks will be a mixture of fibre-optic
cabling, either to individual homes or street-side cabinets, and
wireless broadband. BT, which welcomed the review, has already said
it plans to spend £1.5bn running fibre optic cabling to the
streetside cabinets that ultimately connect 40% - 10 million - of the
UK's homes.
Earlier this week, the government's own independent advisory panel,
the Broadband Stakeholders Group, estimated that rolling out such
fibre optic cabling to all the UK's cabinets would cost £5.1bn, while
putting cabling all the way into every home in the UK would cost
£28.8bn.
Virgin Media, meanwhile, is already rolling out broadband at up to
50Mb per second - 10 times faster than the average connection -
across its cable network which covers half the UK.
Caio said such moves prove that competition, not intervention, is the
way to go. The market is also changing so fast - wireless networks
today can offer faster broadband speeds than were possible over a
fixed-line connection a decade ago - that the government should keep
an open mind on what technology gets used.
"My recommendation to the government is don't commit to anything
today because the technology is changing," he said. "You might find
yourself having committed a lot for something that could have been
done by the market".
As a result he said the government should not look to extend the
universal service obligation, under which BT must to provide a basic
phone line to every UK household, into the provision of fibre optic
cabling.
He gave the current state of the broadband market - which covers
99.6% of UK households - a relatively clean bill of health. But he
added that current 'bottlenecks' in the system, which reduce the
speed of internet access, are appearing in the telecom companies'
backbone networks rather than in the 'last mile' connection between
telephone exchanges and people's homes, which is where next
generation networks will be installed.
As a result he wants Ofcom to demand that the ISPs give their
customers more detail of how they manage their internet traffic,
especially at peak times. The regulator has already pushed for a
voluntary industry code which gives customers more information about
the average speed they can expect on their line. But Caio believes
some customers may be willing to pay more in order to have dedicated
bandwidth, once they fully understand how their line is managed, so
they do not see their speed dip at any time of day.
Caio's recommendation that telecoms companies be able to carpet the
countryside with overhead cables is likely to alarm some rural
communities. But Shriti Vadera, parliamentary under secretary of
state for business and competitiveness, said local communities will
have to weigh up the benefits of super-fast broadband against the
impact of overhead cabling. "It is a matter of ensuring that people
have a say," she added.
Business secretary John Hutton added: "We want to create the right
conditions for private sector investment and stand ready to play our
part in ensuring the UK has a competitive infrastructure in the years
to come."
