Thursday, January 07, 2010

Next Generation Fund consultation begins

The Department for Business, Innovation and Skills (BIS) has today launched a consultation on how the Next Generation Fund (aka the 50p landline levy) described in the Digital Britain final report should be deployed. This follows on from a Treasury consultation lauched in December about how the levy itself should be implemented.

On a positive note, it's good that local authorities get a couple of mentions as important delivery partners, but no recognition of the potential to extend the reach of existing education networks (as provided by RBCs, JANET, local authorities etc) to support currently un- or underserved areas. A shame, as is the fact that the author clearly did more homework on NGA's potential to support healthcare rather than education: the examples given are much more detailed.

Some specific comments:

68. Whilst in time, next generation mobile and satellite broadband services may start to match the headline speeds of fibre-based connections, we do not believe the overall service levels will initially be of the same quality. Inherent problems with backhaul capacity, contention in the network and latency will mean an inferior service compared to a fibre-based connection.

...backhaul and contention will continue to be issues regardless of what technology is used in the last mile? A satellite connection with high latency has limitations sure, but it's it's still much better than dial-up or no connection at all (how long before these two equate to the same thing I wonder).

69. Coupled with the fact that the Fund will be created by a landline duty on fixed lines, we believe it is right that solutions provided by the Fund should be fixed line, fibre connections only.

...yeah right. Obviously this is the same logic that ensures our road tax is used solely to maintain the road network. This seems like a thinly disguised ruse to ensure the money goes to the incumbents to me? Surely ruling out a set of technologies from the outset is stupid in such a fast-moving area - talk about stifling innovation!? This completely contradicts para 60 on page 19, which states that "Government’s approach is, as far as possible, to remain technology neutral and focus more on the services, applications and content that we would expect to be delivered through an NGA network, through specifying service quality criteria rather than the underlying technology".

70. In addition, the European Commission State Aid Guidelines for intervention in NGA markets state that “NGA networks are mainly fibre-based or advanced upgraded cable networks that are intended to replace in whole or to a large extent the existing copper-based broadband networks or current cable networks. ”

...I'm sure the EU folks that came up with this definition would be appalled to see it used as a get out of jail free card in this context. Also a bit rich if you don't specify what minimum bandwidth constitues NGA access?

81. The decision on which approach to use will be based on which approach has the potential for attracting the most bidders, and providing value for money for the landline duty payer, along with factors such as speed of deployment and the technology solutions posed in any bid.

..."value for money for the landline duty payer"...hmmm. I'm sure that the 35% or so of households that don't currently have broadband (many of whom have chosen not to have it, and are quite within their rights to continue to not to want it) will be very interested in the value for money that ensues from their £6 per year contribution.

85. An “inside out” approach has the benefit of deploying infrastructure closer to where the market is delivering, and therefore it is likely that the business case will stronger in these areas (primarily due to density of population and ease of deployment), with the subsidy provided by the Next Generation Fund. The economic impact of NGA roll out is also likely to be greater in these areas.

...but what about the social impact on delivering NGA where the market won't ever deliver? The areas that are worst served by a market led approach to NGA are the areas that stand to benefit the most in terms of improving people's quality of life?

All in all, not sure whether this represents progress or not. We certainly still seem to be an awfully long way behind Australia, New Zealand, USA etc?

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