Tuesday, July 03, 2012

Broadband for businesses - not just a a rural issue


A new report from think tank The Centre for London into East London Tech City, "a vibrant high tech cluster in East London", offers some interesting insights into broadband connectivity and its importance for businesses (coverage from the BBC here). The report reviews the success of the initiative to date and offers recommendations for future development in the light of identified issues and concerns. From the  introduction:
“Since the late 1990s, a vibrant high-tech cluster has been growing in Inner East London, focused on Shoreditch and Clerkenwell. Since 2010 the UK’s Coalition Government has led a high profile drive to accelerate its development – the ‘Tech City’ initiative – taking Silicon Valley as a model...We believe the Government is right to be ambitious for the UK’s digital economy. The future of advanced economies like Britain lies, in important part, in growing research-intensive, innovative, high-value digital companies. Britain’s digital economy already takes the biggest share of national GDP in the G20, and may increase that share by a third by 2016.”
Broadband connectivity was identified as one of seven main areas of concern in the cluster, with connectivity seen as a constraint by businesses, both in terms of reliability and speed and broadband connection times. Over a third of businesses mentioning broadband or wifi as an issue; one respondent had this to say: "It’s not so much that there isn’t good broadband here, it was more of the 6 weeks to 8 weeks time-lag before it’s actually installed." Bandwidth isn't an issue for all companies, but for some, especially those working in video or media, high-speed connections are critical. More broadly, interviewees felt the lack of connectivity was "detrimental for an area selling itself as the digital capital of Europe."

The report offers the following recommendations in relation to connectivity:
  • ISPs should try to guarantee a two-week connection time, where cabling and landlord permissions allow;
  • Workspace providers should consider integrating broadband into their basic rental packages, or include permission for connection within lease agreements;
  • GLA (Greater London Authority) monitors connectivity in Inner East London and other digital hotspots in the city and seeks to ensure (possibly using the Urban Broadband Fund) that they have a rich network of wifi and 4G transmitters.
The UK has some catching up to do in terms of broadband:
"Our findings chime with wider evidence on the UK internet ‘offer’. By international standards, UK broadband speeds are not the worst, and have been improving over time. However, Britain needs substantial future investment in its broadband network, over and above funds currently announced, to approach world leaders such as South Korea. There are also persistent concerns that the UK regulatory framework, which has focused on retail price competition, has been less successful at improving minimum service standards, encouraging investment and technological change. Disputes over 4G roll-out are the most recent example of this, with 4G now not arriving here until 2013…US experience suggests that 4G will become an important complement to wifi, but won’t supplant it. Digital economy firms will need smooth access to both technologies."
Another recent report also highlighted the importance of broadband for businesses - but this time in relation to rural areas. In The missing links – revitalising our rural economy, published in May 2012, the Federation of Small Businesses (FSB) reports that six in 10 rural businesses are suffering with the slow speed of their broadband (the report is available here with a press release here). From the forward:
"However, rural businesses face challenges not encountered by their urban counterparts. They struggle against the odds of poor communications, unreliable broadband services, and patchy transport services that exacerbate the distance they often are from their markets."
Broadband access is increasingly important for rural businesses:
"According to the FSB research, 85 per cent of rural businesses and 84 per cent of urban businesses expect their reliance on the internet will increase. Yet, 34 per cent of small rural firms have said that they are dissatisfied with the reliability of their internet services and 24 per cent are dissatisfied with the value for money their internet service provider offers...63 per cent of small firms are dissatisfied with the speed of their broadband connection compared to 48 per cent of businesses in urban areas."
The FSB makes the following recommendations:
"...the FSB calls for the delivery of high speed broadband (20Mbps) to 98 per cent of rural communities and businesses by 2015. Internet Service Providers should prioritise areas for network expansion by not just the number of households, but by the number of businesses weighted to reflect the economic potential of those businesses to the national economy. This is an ambitious target but one that must be met if the needs of rural communities and businesses are to be met."
The FSB also acknowledges rural mobile connectivity issues and the importance of the technology for rural businesses, with the following recommendation:
"The forthcoming spectrum auction is a golden opportunity to redress this issue. An improved and consistent 4G network is crucial for small businesses and is expected to provide a significantly superior service to current 3G network offered in rural areas. This technology has the potential to place small businesses at the forefront of digital and technological development, giving them a better chance to grow, diversify and overcome the barrier of greater distances to markets. Government should urgently proceed with the Spectrum auction to allow small rural businesses to benefit from a full range of 4G services."
There are some interesting similarities in the issues identified and recommendations made in these two reports, despite their focus on very different geographical areas. Broadband disadvantage is clearly a challenge for businesses but it seems it is not unique to those in rural areas.

1 comment:

  1. Not sure the FSB is adding anything by introducing yet another definition of high speed broadband !

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