Day 2 kicked off with a keynote from YouView Chairman Kip Meek on how the service formerly known as Project Canvas is developing. He was keen to distance YouView from perceived competitors like Google and Apple TV: "Google is providing the Internet on television, YouView is an enhanced television experience". It's planned to launch in June 2011, later than intended as a result of the level of regulatory interest in the project.
To me, it was the wrong presentation for this audience. We know streaming TV services work, the iPlayer and others have proved this. We also know that people would prefer to watch TV on, well, their TV, rather than their PC - obvious really; lean back vs lean forward content and all that. YouView's "clever bit" is managing to negotiate the commercial and regulatory minefield that is broadcast TV to develop an aggregated catch-up service. Impressive, but hardly a subject of much direct relevance to NextGen10 attendees. The technology in the set-top-box is quite clever, in that it records most popular content from broadcast so it can be served locally rather than delivered via the Internet, to reduce the load on ISPs' networks. But I imagine other providers' boxes will do this as well?
But the claim that the service will help to address the digital divide seemed entirely misplaced, especially as while the set-top-box includes browser functionality, it only allows access to a "controlled environment". Sounds like a missed opportunity. YouView looks to me to be essentially a retail platform to sell Sky+ equivalent devices to people who don't want a Sky subscription. Rather like Freeview, which was often described as offering digital TV to people who didn't want a satellite dish (or, to out it another way, Radio 4 listeners). Nothing wrong with that as a business model of course, and I think they're probably on to something, just don't pretend it's something it's not. Given the BBC's involvement, isn't there something missing here about the provision of Internet access through the device being in the public good, in keeping with the BBC's principles?
This was followed by a choice of three workshops, I attended the one on NGA network roll-out. This involved a presentation by Keymile on the opportunities offered by hybrid copper and fibre roll-outs, to maximise bandwidths and performance at the same time as minimising costs, an important consideration in the current economic climate. The presentation raised the practical question of whether current application usage really requires FTTH bandwidths. I can see the point, but such a view risks a step backwards, given the growing impetus around broadband provision generally (and the commitment in other countries such as Australia to FTTH). An interesting point was made about backhaul costs though: whereas capex costs mainly comprise installation costs, opex costs are dominated by backhaul costs - which is where infrastructure sharing (if you can of course, see my notes from day 1) and re-use of existing networks has such a potentially important role to play. Reducing backhaul costs in this way could make fibre installation more viable?
There followed a panel session with representatives from the four BDUK superfast broadband pilots, as announced in the October 2010 Comprehensive Spending Review: North Yorkshire, the Highlands & Islands, Herefordshire and Cumbria. Still early days, all are at different stages and considering different approaches. The point was made that to the Highlands & Islands, the "big society" is nothing new - they've always had to get on with things themselves. NYnet are leading in North Yorkshire, with the region in a strong position thanks to NYnet's infrastructure already providing backhaul into rural areas (via a school in one instance). Cumbria flagged the importance of aggregation, suggesting their approach would be "PSN Plus", where PSN refers to the Cabinet Office's Public Sector Network programme. Herefordshire seemed to have the most to do, by its own admission beginning with a "blank sheet of paper". This elicited a rather cutting comment from one member of the audience: that securing public funds with such a blank sheet was a very impressive achievement. Ouch!
Three more workshops followed; I chose the one on the regulatory environment and state aid, as these aspects present key challenges to the potential repurposing of existing networks (for example, using schools' broadband connections to provide backhaul for rural broadband projects). Complicated stuff for sure; Paul Brisby of Towerhouse Consulting LLP began by highlighting the importance of regulated products and servces: they account for more than 50% of ISPs' opex, and Openreach generates over 30% of BT group EBITDA (earnings before interest, taxes, depreciation and amortization). The key regulatory issues and challenges in 2010 include physical infrastructure access (PIA, or duct and pole sharing), sub-loop unbundling, FTTH regulation (fibre unbundling) and generic ethernet access.
Ginny O'Flinn, Senior Associate in the Olswang EU and Competition Group, provided a very detailed overview of state aid issues for NGA networks, her presentation is well worth a look. She flagged the EU's September 2009 guidelines on state aid in relation to broadband networks, as well as the EU's state aid decisions in relation to NYnet (N746/2006 published in February 2007 and N559/2009 published in June 2010) and Cornwall (N461/2009, also published in June 2010). The EU fully recognises the benefits of broadband and bases decisions on balancing positive and negative effects, as well as proportionality, or the extent to which any aid provides the minimum necessary to achieve the intended objectives. There was some discussion of the practicality of BDUK's intention to obtain a blanket state aid approval for broadband projects (possible and is being explored currently, but individual regional assessments will still be required) and the timescales involved in obtaining decisions. These can be lengthy but not too ridiculous; Cornwall applied in July 2009 and was approved in May 2010. NYnet has been involved with three state aid applications, the two mentioned above took 4 and 12 months respectively, while the application for the South Yorkshire Digital Region Broadband Project (N157/2006) took 14-16 months.
And so we headed into the final straight...Dale Barnes, Acting Director of Advanced Technologies and Innovation at Virgin Media gave an overview of their NGA activities and pilots. Virgin Media downstream traffic has increased by over 215% in three years. 750,000 customers are paying for 20Mbps+ services, and almost 100,000 homes are connected at 50Mbps. Virgin Media are looking to ensure a 10:1 contention ratio across all services in future and have established the Stop the Broadband Con website to encourage greater honesty and transparency in relation to connection speeds...or to throw the bandwidths of competitors' offerings into sharper relief, depending on your point of view. Half of the UK will have access to their 100Mbps service by 2012 which will cost £35/month as part of a bundle or £45/month as a stand-alone service. 10,000 registrations for the 100Mbps service were received on the first day registration opened. Challenges identified by Dale included business rates, wayleaves and the PIA product set as currently proposed by BT (see my notes from day 1 for more on this). There is an opportunity for power companies to play an important role by opening up their infrastructure, and Openreach needs to accept inputs from community networks as well as larger players.
The last keynote of the conference was from Simon Towler, Head of Broadband Policy Programmes at BIS, who reiterated Ed Vaizey's remark from the previous day that the government's broadband strategy paper would be published soon. This will bring all the current strands of activity together. He also explained that the government's definition of the "best superfast broadband in Europe" would be about more than download speed; this of itself doesn't illustrate the actual user experience and having an effective, competitive marketplace is another important facet in describing "best in Europe". The government doesn't want to constrain technology choices as it sees all having a role to play. The private sector should lead investment while the government's job is to get the regulatory and investment framework right. BT's reference offer for access to its ducts is due in January 2011 with a similar offer for access to poles to follow in May. The audience expressed further concern over the potential disconnects between the procurement exercises for BDUK's pilots, BT's infrastructure sharing offer and the timing/availability of European funding, an issue that will require further deliberation I think.
Of the three remaining workshops, I chose the one exploring different ways of extending fibre to the community, which included delivering town centre and wider NGA via a CCTV fibre optic network, further insight into the PSN and solutions provided by Rutland Telecom, who cited an instance of a village with a population of 104 being quoted an excess construction charge (ECC) of £166K to deliver broadband, which clearly is simply not viable. An option Rutland Telecom can provide is installation of a DSLAM on a telephone pole, to deliver broadband to the premise over the remaining copper loop.
Unfortunately I missed the final panel session and conference close, but I'm not sure I could have taken in much more anyway, as my brain was already full ("every time I learn how to set the video I forget how to drive the car" - a Homer Simpson quote I have much sympathy with). In summary, it's clear that while we're moving forward in many regards, some serious issues remain to be addressed, mainly in relation to funding (the current amounts committed aren't sufficient) and continued obstacles from BT which could severely hamper progress. The next few months are going to be crucial, with BT's reference offers particularly significant, and plenty more fun and games to come I'm sure. Watch this space.