Lots of interesting bits and pieces over the last few weeks. In no particular order:
- Echoing the US net neutrality debate, the FT report Ofcom's announcement that they will begin to scrutinise broadband providers' approaches to prioritising traffic and charging higher rates for guaranteed delivery of premium services (Ofcom set to explore web traffic control). More info in a speech by Ed Richards available here. Thankfully, Ofcom's views seem much more considered than some of the hyperbolic and ill-informed views that have been expressed in the US. There is a recognition that traffic management is a necessary component of good network management, rather than the root of all evil, with the focus instead on ensuring transparency and preventing anti-competitive activities. This second aspect is very interesting in the UK, given how closely broadband provision and broadcasting (Sky, Virgin) are intertwined. The key will be ensuring that traffic management works for consumers rather than against them. My guess is Ofcom will be much more keen to regulate via mechanisms such as codes of conduct rather than pursue a highly interventionist policy, in keeping with the EU's proposals for reform of the current telecoms regulatory framework. This seems much more sensible than a blanket mandate that all content and services must be treated in a non-discriminatory manner.
- Also from the FT (Exodus of the young puts rural life at risk), the Commission for Rual Communities' Rural Advocate Report 2010 flags the lack of broadband access in rural areas as a key issue.
"Lack of broadband access and mobile phone coverage is a factor restricting the growth of rural enterprises. The need for rural business diversification for continuing competitiveness is well recognised but so much of this depends on the ability to communicate online – be it rural tourism, or producing goods and services which can be promoted and sold on the internet. Almost 60% of urban areas are able to receive a cable-based broadband service – in villages and hamlets this drops to 1.5%. The Government’s delivery of Next Generation Access by 2017 must put rural areas at most need at the forefront of targeted delivery. The same attention should be paid to mobile phone coverage."
- Some concerning developments in relation to BT's continuing pension deficit problems. A recent Ofcom press release announcing a consultation on the matter revealed that allowing BT to increase its wholesale charges is being considered to help address the deficit. The proposed increases would relate to Openreach products and services, which could mean further increases in broadband costs for schools. The FT report that BT's pension woes are of their own making (BT ‘responsible for own £8.8bn pensions gap’), meaning that the proposal has understandably provoked an angry response from rivals.
- Shrewd insight from Screen Digest in relation to their reported decline in demand for online films. While online film downloads are a key consumer driver for takeup of next generation services, it seems the rights owners have rather painted themselves into a corner with overly restrictive DRM provisions. From the FT's related commentary (Demand dips for online films):
"...US revenues for 2009 were substantially lower than forecast at $291m.“The market just cooled off,” said Arash Amel, a research director with Screen Digest. “This wasn’t caused by economic factors...the level of interest in digital downloads just isn’t there.” He believes consumers have been deterred by an array of competing online platforms that prevent viewers from watching digitally downloaded films on the devices of their choice. A consumer buying a film from Apple’s iTunes store is unable to watch it on their Microsoft Xbox console, for example. “Digital downloading is characterised by its restrictions – it’s all about what viewers can’t do, rather than what they can do,” added Mr Amel."
I guess the bottom line here is about driving the right consumer behaviours, so that people are dissuaded from ripping movies from copy protected DVDs or using P2P to find what they want...sounds very familiar doesn't it?
- The FCC's national broadband plans have come under some criticism recently. Internet Evolution offer some detailed attacks on the FCC's National Purposes Update, accusing the FCC of "pandering to the media and political interests" and "muddy and deceptive thinking" and arguing that there is nothing in the update that "has anything to do with 100 Mbit/s for 100 percent of Americans by 2015". The author argues that the FCC's vagueness fails to address the real opportunities broadband offers, and, more importantly, that it's avoiding the real issues - how much, and who pays. Network World offer similar critcism, arguing that the plan already appears to be "impossibly broad and technologically difficult to roll out". Fierce Telecom report that the FCC's proposals to reclassify broadband services to enable regulation similar that employed over traditional voice services have also met with opposition, with some of the largest fixed and wireless providers joining with industry associations to write to the FCC to protest at proposed net neutrality rules. They argue that any move to reclassify broadband from an "information service" to a "telecommunications service" would have "far-reaching and destructive consequences." Network World also comment on this, suggesting that the FCC must reclassify broadband services in this way if they are to have any chance of mandating broadband access: "...on the one hand, you have the carriers howling about the impossibility of ubiquitous broadband. On the other, there's the FCC threatening to use the big stick of regulation to make the carriers roll it out."
- Finally, returning to the UK, ZDnet report Stephen Timms' launch of Broadband Delivery UK (BDUK), the body responsible for deploying the government’s Universal Service Commitment and Next Generation Fund (see press release here). The Universal Service Commitment will ensure all households have a 2Mbps connection by 2012, while the £1bn next-generation broadband fund will supplement private-sector investment with the aim of offering next-generation broadband speeds to 90 percent of the population by 2017. This coincides with the publication of a new report prepared by Analysys Mason for the Government which forecasts the future reach of NGA across the UK. The study investigates the expected reach of next-generation access (NGA) across the UK up to 2017 based on three scenarios: a purely market-led approach, a network subsidised by Digital Britain’s Next Generation Fund, and local interventions supplementing a subsidised network (such as the Yorkshire Forward Digital Region initiative in South Yorkshire). On a related note, the Broadband Stakeholder Group (BSG) have issued a call for evidence to help revise its fibre cost model. The intention is to test whether the underlying assumptions and conclusions regarding costs set out in the 2008 report are still valid, or whether they should be revised in light of industry developments. This will inform the BSG's response to the government's Next Generation Fund consultation.