Wednesday, September 22, 2010

European Union policy update: universal broadband service requires public investment

Neelie Kroes' speech to the Nordic Broadband Forum on 15th September put an interesting perspective on the UK government's view that the market is best placed to deliver the broadband infrastructure the country needs. Her speech focussed on approaches to funding a universal service obligation for broadband:
"In this debate, considering the large investments involved, it is crucial to determine where an extended universal service obligation should be funded by the telecoms sector or rather a broader base, such as by the State budget. In my view we should keep in mind that universal broadband offers benefits beyond the telecoms sector. The others who benefit range from currently uncovered citizens to companies offering internet services, content and applications. So while it is right to expect telecom companies to invest in new and more efficient networks, and it is right to have a socially inclusive system, it might be unfair to force the telecoms companies to fund the entire exercise. Telecoms companies should be able to realise reasonable profits from their investments at the end of the day. We must also be mindful that cross-subsidisation – very often from smaller challengers to historic incumbents - can lead to higher retail prices and competition distortions. It is best to avoid such outcomes. I therefore think that, in adapting or developing our universal service rules to the broadband environment, we need to be careful to avoid putting the entire burden on the telecom sector."
Seems a pretty clear acknowledgement of the need for European governments to invest in broadband to me? This recognition puts the limited public monies so far committed in the UK to universal service and next generation access into rather sharp relief. I would venture that funding of at least an order of magnitude greater is needed if the UK is to implement what Neelie Kroes envisages in her speech. She set out four possible approaches to universal service:
"First, to move away altogether from sector-specific universal service funding towards a publicly financed system. This would be recognition of the fact that ensuring universal broadband access, also covering remote and scarcely populated areas where the market alone would not deliver, is today a basic need. Under this option, such needs would be guaranteed by the public authorities.
A second option would be to establish a harmonised universal service obligation at a very basic speed level as a minimum EU standard. This could be financed through a sectoral fund, with the speed level being updated from time-to-time in the light of technical and social developments. The telecoms sector contribution would remain proportionate and the EU safety net would remain a real minimum safety net. At the same time, this would leave the way open for Member States to set higher national universal service standards, or promote more ambitious broadband roll-out by using general taxation (without sectoral funding). This would of course need to be in compliance with the innovative State Aid rules we adopted for broadband in 2009;
A third option is setting a cap to the funding contributions of the telecom companies. This would allow a more flexible approach that takes into account the financial strength of the companies in a given Member State while creating funds for broadband roll-out at a proportionate rate, thus avoiding undue distortions of competition. Public budgets could supplement the capped sectoral funds.
Finally, we could simply complement the EU Universal Service Directive with a guidance instrument regarding the telecoms legislation. This would guide Member States to use universal service obligations funded by the sector only where there is a true risk of social exclusion, and no risk of undue competition distortions."
So there is a clear expectation that public funding should play a major role in all four approaches, depending upon the amount (if any) of sector-specific (i.e. money to provided by telcos) funding applied as well. came to a similar conclusion in their coverage. Hot on the heels of the speech came an announcement on 20th September (and welcomed by the FTTH Council Europe) of three measures "to deliver fast and ultra-fast broadband in Europe":
"This package comprises a Commission Recommendation on regulated access to Next Generation Access (NGA) networks that provides regulatory certainty to telecom operators, ensuring an appropriate balance between the need to encourage investment and the need to safeguard competition, a proposal for a Decision to establish a Radio Spectrum Policy Programme to ensure, inter alia, that spectrum is available for wireless broadband and a Broadband Communication outlining how best to encourage public and private investment in high and ultra-high speed networks."
More on this last one here; an interesting and timely extract from the full text, on ways to promote investment and reduce investment costs:
"Local authorities should also consider using fibre core networks that have been or are being constructed to link up public entities (schools, libraries, clinics) in order to bring high-speed connections to unserved communities. Where appropriate, Member States should consider setting up broadband funds at national level on which local authorities can call for the construction of such passive infrastructures."
A nice coincidence with the key message from Rory Stewart's recent broadband conference - re-use existing public sector infrastructure to deliver in rural areas. So at least the UK appears switched on in terms of possible approach, if not finances. So, time for a look down the back of the Treasury's sofa perhaps?

Broadband for telehealth and telemedicine: lessons for education?

While focus of this blog is primarily education, there are a number of ongoing developments in telehealth and telemedicine that underline the importance of broadband generally and next generation access in particular and which are simply too interesting not to cover here.

In August the FCC published an excellent report, Health Care Broadband in America, with a detailed analysis of health care broadband requirements set out on pages 5-7. For example, exhibit A sets out health data file sizes and the bandwidths required to support particular download times:

Click on the image for a larger version. Some rather startling figures here I think. The report goes on to describe a number of scenarios illustrating different health care use profiles and their associated bandwidth requirements:

I strongly believe that this is exactly the kind of detailed analysis that all end-user sectors need to compile, to make the already compelling arguments about broadband's importance even more so. Clear, factual analyses like these change the dialogue about broadband from the theoretical to the specific, which in turn helps to convince those currently sitting on the fence, as well as refute the claims of doubters who suggest that all next generation broadband will be used for is entertainment and downloading illegal content. See this previous post for further thoughts along these lines, together with the beginnings of a similar analysis of educational broadband usage.

To return to telehealth and telemedicine, I've come across a number of very interesting examples and articles about how broadband is currently being or could in future be used in these areas:
  • Google has teamed up with Spectrum Bridge and the Hocking Valley Community Hospital in Logan, Ohio on the deployment of the first TV white spaces broadband trial network for healthcare providers;
  • A thought-provoking article about how people without broadband may be left behind as more and more health care services move online;
  • Details of the funding currently being committed to telehealth in the US (more on this here and here);
  • An article in the Telegraph about UK telehealth trials;
  • An FCC blog post about the role of policy makers in realising opportunities in this area;
  • Broadband for America's assessment of the telehealth opportunity;
  • A report on the launch of the California Telehealth Network;
  • An overview of the FCC's rural telemedicine plan;
  • A recent Radio 4 Case Notes programme focussed on telemedicine;
  • An analysis of the potential of broadband to reduce health care costs significantly;
  • Finally, an excellent telemedicine blog is available here.
I'll keep adding to this list as I come across further examples and articles of interest, have a look here for more of the same.

US National Broadband Plan: E-Rate revisions so schools can use dark fibre

Revisions to the US E-Rate funding mechanism are likely to result in schools being able to access dark fibre, saving money and delivering better broadband services. From the FCC's statement by Chairman Julius Genachowski:
"This Thursday, the Commission will vote on, and I believe adopt, a major modernization of the successful E-Rate program. These changes will help bring fast, affordable Internet access to schools and libraries across the country, and help ensure that America’s students have the high-tech skills they need to compete and succeed in the 21st Century...The program has met its original goals set in a dial-up world, but needs to be taken to the next level. It needs to be updated for a broadband world...The FCC E-Rate Order will also help deliver on the Broadband Plan’s goal of super high speed anchor institutions in every community. We will give libraries as well as schools the ability to use E-Rate funds to connect to broadband in the most cost-effective way possible, giving schools and libraries the choice of contracting to light dark fiber already in the ground, or with existing state, regional, and local networks. With these fiber networks, schools and libraries can provide students and communities with cutting-edge connectivity - and save millions of dollars...the Tri-County Educational Service Center in Wooster, Ohio, which serves more than 30,000 students in 19 school districts, was able to save 50 percent through the use of dark fiber, while increasing network performance by 750 percent...E-rate has been a success, but it’s time to reboot it for the 21st century."
This opportunity was flagged at Rory Stewart's rural broadband conference on 18th September, with further coverage from the BBC here. The proposal underlines the benefits that ensue from grasping the nettle of local connectivity, as I've said before in a previous post:
"...the more you can get your hands dirty in planning and implementing your WAN, the greater the cost savings you can achieve by negating the need for more expensive managed services (which are themselves based on the same underlying products anyway). Folks "on the ground" have a detailed appreciation of local circumstances and opportunities, which can result in innovative bespoke solutions which wouldn't necessarily even have been considered by a telco."
Let's hope the FCC votes in would seem unlikely that it won't in the face of such evidence?

Broadband Commission for Digital Development: September 2010 findings

The International Telecommunications Union's (ITU) Broadband Commission for Digital Development, first covered on this blog here, has now published its findings.

The Commission was established to "define strategies for accelerating broadband rollout worldwide and examine applications that could see broadband networks improve the delivery of a huge range of social services, from healthcare to education, environmental management, safety and much more." From the press release announcing the Commission's findings:
"ITU Secretary-General Dr Hamadoun TourĂ© today challenged global leaders to ensure that more than half of all the world’s people have access to broadband networks by 2015, and make access to high-speed networks a basic civil right...“Broadband is the next tipping point, the next truly transformational technology. It can generate jobs, drive growth and productivity, and underpin long-term economic competitiveness. It is also the most powerful tool we have at our disposal in our race to meet the Millennium Development Goals, which are now just five years away,” said Dr TourĂ©."
A clear fit with the UK government's 2015 intentions for universal broadband service and next generation access. The Commission's findings are in the form of two reports, the first, Broadband: A Leadership Imperative, provides a high level overview while the second, Broadband: A Platform for Progress, examines financing models, return on investment, technology choices, and strategies for deployment across a range of different types of economies. A list of key findings from the reports is available here.

Monday, September 20, 2010

Rory Stewart, Ed Vaizey & pigeons: must be a rural broadband conference then!

Here's my report on Rory Stewart's broadband conference, as mentioned in my previous post. I make no apologies whatsoever for the length of this, so read on at your peril - you have been warned. And what a marvellous venue! I've driven past it loads of times on trips to the wonderful North Lakes, but I've never been inside before.

Anyway, to business: following Rory's welcome, Ed Vaizey, Minister for Culture, Communications and Creative Industries, set out the government's broadband policy to put the day into context. His speech echoed the announcements made at the previous BDUK industry day in July, but with some very interesting additions:
  • The government is committed to the rollout of NGA/USC as quickly in rural areas as in towns;
  • The government believes the market remains the best delivery vehicle, but defines "market" in its broadest sense to include communities as well as major players, with the government only intervening where absolutely necessary (for example, where the market won’t ever deliver);
  • With regard to existing networks, the re-use of public sector infrastructure is a key enabler, with the government intending to issue guidance for local authorities in the next few months to set out this opportunity and encourage this approach  further;
  • The government is committed to open access in all senses, for example, through consideration of how to enable access to electricity pylons as well as telcos' ducts for routing fibre, to reduce the cost of new investment;
  • 63 proposals have been received in relation to the three proposed superfast broadband pilots, 11 are being taken forward with the three final projects expected to commence in mid-2011;
  • Broadband Delivery UK (BDUK) will become more outward-facing, publishing a paper before the end of the year on where the UK stands in terms of broadband and the government's intentions going forward (re-use of existing public sector infrastructure got another mention here too).
Ed had also made himself useful the previous day as well, switching on a new fibre optic link for Alston's Cybermoor project in Nenthead. He also revealed during his speech that Rory the carrier pigeon (who was in fact a girl!) had won a race against rural broadband by delivering a USB memory stick more quickly than a computer was able to download the same data - more here, with the photographic evidence here.

Next up was Adrian Wooster, JON Exchange Director, to kick off the first panel session on not spots, rural needs and the potential of broadband. Adrian painted a rather bleak picture of what the market is (or rather isn't) likely to deliver of itself: 36% of the Penrith & the Border constituency is likely to receive a broadband service below the 2Mbps USC, considerably worse than the national average. Competition is limited, with BT the only option outside Penrith across the entire constituency. Data from the department for Communities and Local Government (DCLG) shows that 75% of the population is deeply unlikely to get NGA under current provision, ranking 609th out of 650 constituencies. Interestingly, other countries' USC plans would also struggle in the region: Finland has committed to providing fibre to within 2km of every community (where community is defined as anywhere with population of more than 70 people per square km), but this would make little difference to Penrith & The Border, as the population is too sparse for even this to have an impact.

Stuart Burgess, the Rural Advocate, then reported that broadband access and mobile coverage are now the second most important issue (after affordable housing), with estate agents revealing that broadband and mobile access are the first things enquirers ask about in relation to rural properties. The 2010 Rural Advocate Report sets out the huge economic benefits broadband can bring to rural areas. Richard Walters, CEO of Commendium, was unequivocal: the emerging demand for NGA is clear and we must invest to solve tomorrow's rather than today's problems. The sign Richard wants on the Cumbria/Lancashire border by 2015 received a very warm response: "Welcome to Cumbria, the 100Mbps county".

William Davies, Vice President of Technology Policy for RIM, said that a combination of technologies are required, as mobile/wireless can’t fix problems by themselves. He attributed the overwhelming of 3G networks being due to incorrect tariffing: all you can eat data tariffs can't and won't drive the necessary investment in upgrading networks to cope with increasing demand; if you use more, you should pay more (see this post for my thoughts on differentiated services and pricing, in the context of the net neutrality debate). The first panel session closed with a presentation from Andrew McClelland, Director of Operations at the Interactive Media in Retail Group (IMRG) on the ever-increasing importance of e-retailing to the economy.

Bill Murphy, Managing Director for NGA, BT, then gave an overview of BT's NGA activities and plans, re-stating BT's commitment to delivering NGA to 66% of the UK by 2015. There was some vigorous disagreement with BT's claim that 99% of the UK has access to broadband, a disagreement borne out by the data presented by Adrian Wooster earlier in the day.

The next panel session focussed on solutions for the backhaul, the most difficult element to provision in rural areas. Barry Forde, Director of the Storey Creative Industries Centre in Lancaster and architect of the CLEO broadband network, set out the very strong case for using existing education networks to provide rural backhaul. For further information about the broadband infrastructure currently serving schools, see the 2009 National Education Network Services Survey, these case studies prepared as part of JANET(UK)'s local loop unbundling project and this previous post. Education broadband infrastructure is facing some threats at the moment though, as I mentioned in this previous post, with further detail in this report I prepared for the Education Network Governing Council earlier this year. A crying shame if these issues were to derail such an important opportunity? Chris Smedley, Chief Executive of GEO, then re-stated the importance of NGA but queried how much it should cost and how it should be paid for. His view was that public money should support investment in fibre builds that can be used and re-used as widely as possible, endorsing Barry's suggestions. Chris also suggested that the last major investment in national infrastructure was the building of motorway networks, which were built despite few people (at the time) having cars...can you see what he did there?

Aidan Paul, Chief Executive of Vtesse Networks, delivered a very interesting overview of their approach to provisioning the final third, citing developments in Hatt and Saltash in Cornwall, Broughton near Huntingdon and Birch Green in Hertfordshire. Aidan stated that the final third exists in areas served by market 2 & 3 exchanges as well as market 1 exchanges (according to Ofcom's classifications, where a market 1 exchange is one where the only broadband services available are based on BT Wholesale's offerings, so an exchange that hasn't been unbundled, whereas market 2 and 3 exchanges offer a choice of 2-3 or 4+ operators respectively). The final third is spread right across the UK, broadband availability being dependent upon distances from exchanges. He also asked why Vtesse pays 20 times more tax than BT on its infrastructure, a problem that is apparently (much to Rory Stewart's delight) all Henry VIII’s fault, in that he established the basis for the current rating system (more on fibre tax issues here). Aidan also asserted that BT supplies dark fibre to itself under terms that it won’t provide to others, and flagged the opportunities for low cost fibre deployment (“slotting”) as an important  part of a shopping list for what needs to be in place to facilitate NGA.

Gareth Davies, Competition Policy Director at Ofcom, wrapped up the morning with an update on Ofcom's wholesale local access and wholesale broadband access market reviews (more on these here). The conclusions from the local access review are due at the end of this month with the wholesale broadband access findings due in November. Encouraging effective competition in all areas is a priority for Ofcom.

After lunch, the focus turned to the US, with updates on broadband policy developments from Susan Walthall, Acting Chief Counsel for Advocacy of the US Small Business Administration, and Erik Garr, now of Diamond Management and Technology Consultants and previously General Manager for the FCC's National Broadband Plan ("365 pages of good, clean telecommunications fun", apparently!). See this post for further details of the economic impact of broadband, and here, here and here for more on the National Broadband Plan, with some important input from EDUCAUSE described here. Erik set out the rationale for the plan, reporting that the the US faces similar rural challenges to the UK in many areas, with similar difficulties in establishing the business case for rural broadband investment. He sees spectrum policy as crucial, in that effectively deployed mobile networks could offer real competition to fixed line (DSL) services, driving further investment and innovation as a result. He also flagged the plan's proposals to make changes to the e-Rate funding mechanism to support schools and districts to build their own networks (more on this here).

The final panel session focussed on community build out, with input from Malcolm Corbett, Chief Executive of the Independent Networks Cooperative Association (INCA), who provided an overview of some of the "JFDI" projects (Digital Region in South Yorkshire, FibreSpeed in Wales) that INCA had been set up to bring together. Lindsey Annision, Marketing and Web Consultant made an impassioned plea for "gigabuckets" to supply all rural communities with broadband in a way that fixes not just today's but tomorrow's problems as well, and rightly asserted that the savings (at all levels) that will accrue from broadband investment will far outweigh the installation costs. Lindsey also later made the important observation that consumers don't just want to "lean back and take Hollywood content" - they want to make and share their own too, underlining the importance of symmetric bandwidth. Next Daniel Heery, as founder and manager, gave an overview of the Cybermoor project, inviting people to visit on the national Social Enterprise Day on 18th November 2010.

Nicholas James, CEO of UK Broadband, then described the opportunities for using wireless in the backhaul. UK Broadband are the largest national holder of spectrum, which can be used for wireless backhaul of up to 1Gbps. To counter claims on the unsuitability of wireless, James commented that 500+ 4G networks are being built around the world at the moment, which will deliver reliable services. UK Broadband are prepared to provide services at or below cost with appropriate revenue sharing agreements in place, and want to work with local projects and communities. His view is that wireless complements fixed line and he also queried how long it will be before all TV is delivered over broadband, rather than broadcast, as is already starting to happen in other parts of the world. He flagged the importance of separating local access from backhaul and ensuring that backhaul is offered on open access basis. Chris Conder, advisor on community broadband, then introduced a video that was in many ways the highlight of the day: JFDI again - just farmers doing it, a DIY fibre installation with the backhaul provided via wireless.

In summing up, Barry Forde re-stated that while backhaul is the key problem facing rural communities, the solution is already in place – re-use the public sector broadband infrastructure currently serving schools, local authorities, healthcare and other services. Rory Stewart then closed the conference by reiterating his intentions: he wants the USC to be in place for everyone in the region and for NGA to be available to the majority by the end of 2012, three years ahead of the government's targets.

Videos from the day are available here, a replay of the day's live blog is here and other reports of the day are available here and here. The twitter hash tag for the event, #rbc10, is still getting plenty of traffic almost 48 hours after the conference closed, and an interesting way of gathering together information from twitter is here. The Country Land and Business Association have issued a statement praising the event:
"The CLA says that the Penrith and the Border Broadband Conference, held on Saturday 18 September, was a major step forward in the battle to bring broadband to rural areas, and particularly welcomed the pledge by Broadband Minister Ed Vaizey that Government would allow rural communities to connect to existing public sector fibre networks."
Coverage from Computer Weekly here, here and here, with much more to follow I'm sure - here's coverage from the local News & Star paper.

Loads and loads to think about, but for me the main take-away was the need to firm up the opportunity of using school broadband infrastructure. The potential is there, and is increasingly being recognised, which is great, but what needs to be in place to make this happen? There are issues to resolve at all levels - from how to square such an approach with state aid requirements at the top, to how to "plug in" to school networks at the bottom, with many additional issues at all points in between. But none of them are or should be show-stoppers, especially if the enthusiasm and can-do approach so much in evidence on Saturday can go on to infect a wider audience.

When and where is the next one going to be then?

Friday, September 10, 2010

Rory Stewart MP on rural broadband

A very interesting post on Rory Stewart's (MP for Penrith & the Border) blog:
“My Cumbrian constituency is so sparsely populated that government could not afford to deliver broadband to everyone in the next five years and businesses or charities or individuals wouldn’t either (laying the fibre-optic cabling alone could cost 40 million pounds). But in a Big Society model the government could build a high-speed cabinet in each parish (which would just about be affordable) and encourage the community to take it from there. Each parish could then choose its own system, choose between a cheaper wireless system or a more expensive fibre system, ask local farmers to dig the fibre-optic trenches themselves (which would cost a fifth of BT doing it) and run their own network (or get a contractor to do so for them). Government could play an important role by opening access to primary schools' cables, helping communities to fire radio signals from mobile telephone masts; asking favours from railway companies to access their fibre and making soft loans (allowing a householder to repay a thousand pounds investment in broadband over twenty years not one). But government would then be contributing a public asset rather than cash; political support rather than instruction; a loan not a grant and it would be abolishing laws rather than making new ones. And the end result is not a ‘cut’ but instead a community getting something which the government would never have delivered: an opportunity for Cumbrians to consult a medical specialist in Kent or learn about new approaches to grass management from an expert from Wales down a live video-link without leaving home.”
I've discussed the opportunities that the re-use of school broadband infrastructure offers in a number of previous posts (see here, here and also here). This was also flagged by ministers at BDUK's industry day in July which I was lucky enough to attend, while this previous post describes a project in Lincolnshire already implementing an approach very similar to what Rory envisages above.

It will be interesting and hopefully encouraging to see the extent to which industry responses to BDUK's USC theoretical exercises address re-use of existing public infrastructure. The recently announced cuts to the Harnessing Technology Grant, the principal funding stream for schools' ICT, are a concern here though - for the details see here and also this commentary from the TES.

While further information from the Department for Education (available here, see the Q&A download) accurately describes existing contracts for school broadband provision as "a call on revenue, not capital, funding" (the Harnessing Technology Grant is a capital grant, with the same Q&A document reporting that "schools revenue funding has been protected"), these funding cuts have nevertheless created complications in sustaining crucial ICT infrastructures that schools and local authorities could well have done without. And clearly the cuts could also jeopardise the potential for re-use of school broadband infrastructure in rural communities, which I'm sure is the last thing anyone wants.

I'm also attending Rory Stewart's now sold-out broadband conference in Penrith on 18th September, which is shaping up to be a very interesting event. Ed Vaizey MP, Minister for Culture, Communications and Creative Industries, is attending as well.

Some potential here to join priorities up across different government departments perhaps? A full report to follow here as soon as possible after the event.