Monday, June 22, 2009

Painful adventures with next generation networks?

I’ve seen recent developments in Australia cited in several pieces of Digital Britain coverage, usually along the lines of “if they can find the money to invest in broadband infrastructure down under, why can’t we?”
So this excerpt from the Economist Intelligence Unit & the IBM Institute for Business Value’s 2009 E-readiness rankings, as reported by, provides an interesting alternative take:
"Boosting investment in telecoms infrastructure should also be a boon for service providers and good for long-term digital development. If not handled well by government, however, such programmes can cause more grief than goodwill. A case in point is Australia, where the government recently set itself in opposition to the country’s main operators and various state governments in a contentious tendering process for a US$5bn fibre-to-the-node (FTTN) national network. While seen as a boon to Australia’s residential—and particularly rural and remote—Internet access markets, the government irked existing industry participants as they spent considerable time and money on tenders, only to find out that the government did not select any of them and opted to build the network itself—at a projected cost of six times the figure in the original tender. This created discord where stimulus and co-operation were sought."
But how much of a problem is "irking" industry participants, in actual fact? Is it arguable that they could do with a good irking, once in a while?

Friday, June 19, 2009

Digital Britain reactions

Much discussion of the proposed £6 per year landline levy, much of it negative, with the only real winner likely to be BT, whose share price rose following the announcement.
This from Computing:
"The government's intention to levy a 50p per month "tax" on most UK phone lines to fund the country's broadband expansion has one big winner in BT. But there are also hundreds of thousands of small losers among telephone subscribers uninterested in using broadband services. Ostensibly, the levy is intended to make sure that everybody in the UK that wants it will have access to next-generation superfast broadband services. But it effectively represents the subsidy long sought but never received by telcos, which will help them roll out a high-speed fibre-optic network more or less directly to UK residents' doors, something BT and others could never previously afford to do...Industry analysts agree that BT, as the incumbent telecommunications operator, has more to gain than any other company. The telco's share price rose by more than three per cent on the news, according to analyst Bernstein Research."
In the FT, BT chief executive Ian Livingstone, unsurprisingly welcomed the announcement:
"BT is the prime candidate to benefit from the proceeds of the "broadband tax". Mr Livingston said in an interview with the Financial Times that the levy meant BT could seriously consider expanding its superfast broadband network to run past 90 per cent of homes by 2017. "What this might well do, and has a good chance of doing, is providing enough support to make the risk and rewards of doing this programme acceptable," he added."
The Telegraph welcomed the principle, but questioned the mechanism:
"A levy that is currently just £6 per year now may increase in price over the coming years, while a recent Ofcom study suggests that of the few million people who currently do not have internet access, most never want it, while relatively few are forced to make do without the web as a result of their location. In effect, this levy means the many are being asked to pay for the few, and a seemingly reluctant view at that."
The Guardian shared this concern, and also highlighted a more fundamental issue with the proposal:
"To be sure, Mr Bradshaw is taking a risk in imposing a £6 annual poll tax on all fixed-line phone users to pay for extending the broadband pipe network - but it is the wrong kind of risk. Some will question the fairness of Aunt Agnes in Liverpool paying higher phone bills to enable her teenage nephew in the Scottish Highlands to download games. But there is a bigger problem with this proposal: the public is subsidising private companies to gain greater market access - with no public returns. When the government pumped money into the banks, it took a big chunk of equity for the taxpayer; here it is pumping money into the broadband network and taking nothing in return. There will be no equity stakes (which would at least have been fair), nor is it easy to regulate what goes down those broadband pipes. This amounts to an unconditional transfer of resources from the very poorest to the big technology firms."
This issue (which reminds me of NESTA's previous proposal for a "spectrum for speed" swap) was summarised by this tweet reported by the Guardian earlier in the week:
"so the govt to add surcharge to a private service to create new fibre nets that then those private services will charge us money to use?"
NESTA have also published an interesting new press release about children wanting more technology in the classroom:
"The research, carried out by Ipsos MORI, questioned 2,447 young people aged between 11 and 16 years old and reveals that over half of the students surveyed want teachers to use computers and the internet to help advance learning techniques (55% and 51% respectively). Two in five (40%) students also believe that an increase in the use of DVD players and iPods or mp3 players would help learning, while similar proportions would be interested in greater use of smart boards, games consoles and mobile phones."
Anyway, back to the report...speaking in the Commons on Tuesday, Shadow Culture Secretary Jeremy Hunt shared concerns about the levy, and also questioned its likely efficacy:
"Today’s solution, according to the Government, is a broadband tax, but rather than taxing, should the Secretary of State not be seeking to stimulate investment through the regulatory structure? The cable revolution happened without a cable tax; the satellite revolution happened without a satellite tax. Everyone recognises that some public investment might be necessary to reach the more remote parts of the country, but simply slapping on an extra tax is an old-economy solution to a new-economy problem. Unfortunately, the numbers do not add up either. The tax will apparently raise about £150 million per annum. Will the Secretary of State confirm that at that rate it will take 20 years to cover the estimated £3 billion cost of the broadband roll-out?"
It would seem the levy came as a surprise to all, which rather suggests, given how few other surprises the report contained, it was a last-minute addition, the implications of which weren't been fully considered? And will schools and other areas of the public sector be able to benefit from the Next Generation Fund created by the levy? Ben Bradshaw stated in the Commons in Tuesday, in response to a question about affordability of NGA, that schools "will of course have to be a priority". A rather ironic reply, given the Digital Britain report's failure to even acknowledge school broadband infrastructure issues and opportunities, let alone consider how they might be addressed.

The Guardian also questioned the report's recommendation that certain public services (including those relating to education) begin to move exclusively online:
"By 2012, according to chapter eight of the paper, some services should be available primarily online although with an offline safety net, through what it calls a Digital Switchover of Public Services...transactions mooted for the digital switchover...include school registration, which should be equally open to everyone: making online the main method seems likely to favour the better-off...It makes sense for the government to try to increase people's use of online transactions – in many cases this will save money. But it should do so by providing good online services that people want to use, rather than pushing them into it. That's the service ethos of a cheap and nasty airline, not of public service."