Friday, August 17, 2012

House of Lords broadband report - analyst views & commentary

Both Analysys Mason and Ovum have published their analyses of the proposals set out in the recent report by the House of Lords Communications CommitteeBroadband for all: an alternative vision. The Independent Networks Cooperative Association (INCA) and the Country Land & Business Association (CLA) have also published statements in response to the report.

Analysys Mason focuses its comments on the report's proposals for "a robust and resilient national network linked primarily by optical connectivity, bringing open access fibre-optic hubs into or within reach of every community." Analysys Mason offers some insight into what such an approach might cost, in the absence of any costings in the report, based on their previous calculations for the Broadband Stakeholder Group in September 2008:
"If the Government were to start by building open-access hubs to serve the most rural 10% of the UK – i.e. the part that is least likely to receive superfast broadband under existing broadband plans of local authorities – and if we assume that each hub serves around 300–400 premises (roughly the same number as an existing BT cabinet), then the total cost would be of the order of GBP1 billion. This figure does not include the cost of linking the hubs to each of the premises they are designed to serve."
Clearly if it would cost around £1 billion for the final 10%, extending the approach to include more of the UK would cost a lot more. The statement goes on to point out that this figure is significantly more than the amount of public funding that has been committed by Government in support of the roll-out of superfast broadband across the UK. Analysys Mason believes that little additional public or private funding is likely to be forthcoming, and that such an approach risks delaying further private investment:
"Some additional funding may be available at the European Union level, but it seems unlikely that the operators themselves would contribute to the construction of a new open-access dark fibre network, as they would risk damaging the value of their own existing networks. Furthermore, the proposals might delay the roll-out of commercially funded networks, as operators would be likely to wait to see in which areas their planned infrastructure could be duplicated."
Both ISP Review and ZDnet reported on Analysys Mason's statement. Ovum similarly acknowledges the lack of costings in the report, suggesting in its statement that its proposed solution "has already been dismissed as unworkable." Its statement also claims the report fails to take account of the fact that "access to BT’s network (both copper and fiber) is already available on equivalent and non-discriminatory terms and that winners of government funding must provide open wholesale access to their networks", in its analysis of the reasons for the apparent lack of competition in the marketplace.

In fairness, the House of Lords report does acknowledge the availability of Virtual Unbundled Local Access (VULA) in the form of Openreach's Generic Ethernet Access (GEA), a wholesale  product in both FTTC (fibre to the cabinet) and FTTP (fibre to the premise) versions. ISPs can buy this service from Openreach as an implementation of the VULA requirement established by Ofcom to address the impracticability of Openreach offering full physical unbundling over its fibre local access networks. The report notes that GEA fails in what it regards as a particularly important aspect preventing smaller providers from competing locally with those with national scale:
"The most important criterion which GEA fails to meet—quite fundamentally—is the first (that the standards be open and industry-led) which, by extension, means that it cannot meet the second (be  universally adopted). GEA is a closed, proprietary specification."
The House of Lords report suggests that a set of appropriate alternative open standards already exists:
"While it is outside the scope of this report to define precisely what an open  set of standards should specify, a set of industry-defined standards does already exist which, in our view, provide a very good model. These are the Active Line Access standards (ALA) fostered by Ofcom and defined by the UK’s Network Interoperability Consultative Committee (NICC), a technical forum for the UK communications sector that develops interoperability standards for public communications networks and services in the UK. They are designed to provide a standard interface marrying the needs of  Communications Providers and Infrastructure providers in the UK..."
The report asserts that the ALA standards meet all of the necessary criteria except "universal adoption", going on to suggest that:
"...the universal adoption of an open set of standards like Active Line Access is absolutely crucial in enabling local access network providers without national scale to compete with large-scale national networks like that of Openreach which envelope many parts of the country, and at present apply their own exclusive, proprietary specification, inaccessible to others."
In summary, "ALA seems to provide a good initial standard, and a good model for the open standardisation process which is manifestly required." Returning to Ovum's analysis, it goes on to suggest that the Government should not be criticized for "giving time for market forces to play out", even if it has done so rather inadvertently as a result of delays in Broadband Delivery UK's processes, as this demonstrates that "the private sector is still willing and able to roll out next-generation broadband services to parts of the country that were originally thought of as underserved".

Ovum's statement also criticizes the House of Lords report for failing to address properly the importance of mobile technologies to the UK's broadband future and for suggesting that TV broadcasts should in future be delivered entirely by IPTV without considering fully the impact this would have on both bandwidth requirements and investment incentives.

Ovum suggests that "policy-makers should consider the possibility of mobile operators using existing passive infrastructure for backhauling mobile" and that the infrastructure sharing obligations placed on BT should be extended to other communications providers. Finally, Ovum suggest that a disconnect between Ofcom and the Government has emerged in recent years which needs to be addressed if the UK's broadband upgrade is to get back on track, particularly in relation to the forthcoming 4G spectrum auction.

INCA's statement is supportive of the report, welcoming its highlighting of the importance of open standards and open access and the re-introduction of the concept of local community fibre hubs, something considered in the Government's strategy document Britain's Superfast Broadband Future but largely absent from subsequent policy developments. Inclusiveness is key to future success:
"Many private sector players and communities have the capability and capacity to make a significant contribution to ensuring that we build a genuinely future-proofed next generation network; a 'transformational digital infrastructure' capable of supporting new generations of digital services and the people and businesses that create them. It is important that we adopt an inclusive approach to ensure we get it right."
The Country Land & Business Association statement also welcomes the House of Lords report, particularly its focus on coverage and inclusiveness above speed. However the statement takes issue with the report's assertion that fibre optic technologies are the best option:
"The CLA advocates a patchwork quilt model that uses the most appropriate technologies for a certain area, rather than using a single technology. An over-reliance on a single model is limiting the Government's chance of meeting its 2015 deadlines to provide superfast broadband of at least 24 Mbps for 90 percent of premises, and its commitment to deliver two Mbps to all rural areas."
Finally, it would appear The Register is far from convinced by the report..."Do sheep really need Twitter? And must we pay for their Tweets?"

1 comment:

  1. I'm not sure about the "standards" thing, GEA is a proprietary product but it uses Ethernet, PPPoE and VDSL2+ and other open public standard technologies so it isn't like you have to buy a BT-branded modem to be able to connect to a GEA line.