Tuesday, August 21, 2012

Jeremy Hunt: "to be the best you need to be the fastest"

In a speech yesterday, Jeremy Hunt, Secretary of State for Culture, Olympics, Media and Sport, reiterated his commitment to the UK's broadband strategy.

In many regards, his speech was a direct response to the criticisms set out in the recent House of Lords report on the Government's approach (more on the HoL report here). One such criticism was that the Government has prioritised speed over coverage, disadvantaging areas outside the target for superfast broadband to be available to 90% of UK premises by 2015, as exemplified by the following extracts from the HoL report:
  • Government policy has become preoccupied with the delivery of certain speeds to consumers. This, in our view, has had a detrimental effect on policy-making and the long term national interest.
  • The delivery of certain speeds should not be the guiding principle; what is important is the long term assurance that as new internet applications emerge, everyone will be able to benefit, from inhabitants of inner cities to the remotest areas of the UK.
  • ...it should be a fundamental principle of broadband policy that whatever measures are undertaken to enhance or extend its availability, they strive to bring about equality of opportunity to access broadband across all communities in the UK.
  • ...future broadband policy should not be built around precise speed targets end-users can expect to receive in the short-term, however attractive these may be for sloganeers.
  • We urge the Government to reconsider using speed targets to define the goals of their broadband policy. This would allow them to be more flexible with regard to the technologies used to provide enhanced connectivity, particularly to outlying communities.
However, Jeremy Hunt remains unrepentant on the importance of speed:
"Because of the scale of this opportunity, I have always prioritised this part of my agenda at DCMS. In my very first speech as a Minister I said that I wanted us to have the “best” superfast broadband network in Europe by 2015.  In defining “best” you include factors like price and coverage as well as speed. But over the past two years it has become clear, as Usain Bolt wouldn't hesitate to say, to be the best you need to be the fastest. So I am today announcing an ambition to be not just the best, but specifically the fastest broadband of any major European country by 2015."
Similarly, from later in the speech:
"Probably the best characterisation of my broadband policy has been a relentless focus on speed. Let me explain why. My nightmare is that when it comes to broadband we could make the same mistake as we made with high speed rail. When our high speed rail network opens from London to Birmingham in 2026 it will be 45 years after the French opened theirs, and 62 years after the Japanese opened theirs. Just think how much our economy has been held back by lower productivity for over half a century. We must not make the same short-sighted mistake."
Interesting to see the reference to HS2: there has been much criticism that the money being allocated to HS2 would be better spent on broadband (see here for an example from last years NextGen conference) - an attempt to head off future criticism along these lines (so to speak), by stating the importance of and the Government's commitment to both? The Culture Secretary went on to rebut still further the criticism that the UK's broadband policy is speed-obsessed:
"Which is why when the Lords Committee criticised me this summer for being preoccupied with speed, I plead guilty. And so should we all. Because we simply will not have a competitive broadband network unless we recognise the massive growth in demand for higher and higher speeds. But where their Lordships are wrong is to say my focus is on any particular speed: today’s superfast is tomorrow’s superslow. Just as the last government was wrong to hang its hat on 2 Mbps speeds, we must never fall into the trap of saying any speed is “enough.” That is why, although we have loosely defined superfast as greater than 24 Mbps, I have also introduced a programme for ultrafast broadband in our cities that will offer speeds of 80-100 Mbps and more. And we will continue to develop policy to ensure that the highest speeds technology can deliver are available to the largest number of people here in the UK."
So the >24Mbps figure is "loosely defined". Ofcom's latest research into UK fixed-line broadband speeds found a similar looseness in relation to ADSL2+ services which are theoretically capable of delivering up to 24Mbps: these are now frequently being advertised as offering up to 16Mbps instead.

Jeremy Hunt also hit back at the HoL's criticism that the Government is preoccupied with fibre to the cabinet (FTTC) solutions: "They suggest that fibre to the cabinet is the sum of the government’s ambitions." But I'm not sure the the HoL report does suggest this, in fact? The main argument set out in the HoL report is that the UK's broadband strategy should be based upon a detailed assessment of and proper planning for the kind of broadband infrastructure the UK needs. To this end, it makes the case for a national network of open access fibre-optic hubs:
"…our vision is of a robust and resilient national network linked primarily by optical connectivity, bringing open access fibre-optic hubs into or within reach of every community. This would allow diverse providers, large and small, to contribute to the reach and resilience of our national connectivity and allow all individuals to benefit from whichever services, including public ones, will run over it in time to come...our view is that:  
i) Every community should be within reach of an open access fibre-optic ‘hub’; 
(ii) Every such hub should be fed by ample fibre-optic cable, providing open access to optical links back to the exchange, and back to the public internet—which will not be free, but made available on fair, reasonable and non-discriminatory terms, allowing third parties to build their own local access networks meeting appropriate technical standards, using whichever technologies they choose, from that hub; 
(iii) At the very least, we expect a hub to be able to provide backhaul for a wireless network, where there is demand, so that premises would be able to gain access to a wireless internet service from at least one of these hubs—assuming they can afford to do so."
The HoL report does stress the importance of fibre to the premise (FTTP) to inform the future direction of the UK's broadband policy, acknowledging that current constraints prevent its universal implementation in the current climate:
"We anticipate and recommend that policy should be ultimately directed towards universal, point-to-point FTTP as this is a technology not only able to accommodate current demand, but at current rates of growth, will be able to accommodate the UK’s bandwidth demands for many decades to come. 
In this sense, we recommend that the Government should set out an even bolder vision for broadband policy than is currently the case. 
Given the impossibility, with current constraints on resources, of rolling out universal point-to-point FTTP, we recommend that Government policy should, as an intermediate step, aim to bring national fibre-optical connectivity—which would include, as a minimum, fully open access fibre backhaul—within the reach of every community. This will provide the platform from which basic levels of service can be provided to all, and an improved service where there is sufficient demand.
As a point of principle, we believe it is incumbent on the Government to ensure that policy and regulation in the interim guarantee that there is a clear path from any intermediate steps which may be taken to the roll-out of point to-point FTTP and that, crucially, these steps will not serve to hinder or hold back any future upgrade."
...which reads to me as suggesting that a new approach is needed, not that FTTC is the sum total of the Government's intentions. I would venture that this extract from Jeremy Hunt's speech is a direct response to the concept of a network of open access fibre-optic hubs reaching every community set out in the HoL report:
"Let’s look at the alternative: if the state were to build a fibre to the home network now, it would potentially cost more than £25 bn. It would also take the best part of a decade to achieve. We will get there far more cheaply – and far more quickly - by harnessing the entrepreneurialism of private sector broadband providers than by destroying their businesses from a mistaken belief that the state can do better."
However, in my view, the HoL report doesn't suggest that the state should build a fibre to the home network now, and it also recognises the importance of the private sector and a competitive marketplace:
"..this line of analysis, could prompt calls for nationalisation, and these might well have been deafening in a different era. Curiously, and as a matter of fact, we note that there have been calls, not for nationalisation, but for dispensing with competition and handing to Openreach the necessary public money and the entire job of rolling out fibre. 
We note, however, that one of the advantages of focusing policy around the  promotion of open access fibre-optic hubs, as we recommend, is the credible introduction of competitive pressure to invest in local access networks for the  long term. Public subsidy should therefore be used to roll out open access fibre-optic hubs to within reach of every community; the local access network, given a reformed regulatory and policy backdrop...then becomes a different economic phenomenon to the rest of  the network and one in which competition, and indeed community involvement would be newly stimulated. Under such an approach, it would be possible for technical enhancements to be introduced without specific, centralised mandates for speeds or any other quality, for which demand may only exist in the future. With the middle mile within the reach of individuals and communities, such decisions can be made locally. They can, through the operation of the market, choose the kind of final link or drop which they want themselves and upgrade this flexibly as and when they choose to, or there is need to do so."
The HoL report also suggests that relying on the private sector brings its own set of risks, particularly in relation to the amount of competition in the current marketplace:
"...the danger that results from the lack of competitive pressure in the construction of the UK’s broadband infrastructure lies in the fact that the Government can easily find itself in thrall to the commercial interests of private enterprise, and therefore unable to direct broadband infrastructure in the wider interests of the UK.  
We urge the Government, therefore, to recognise as a general principle that it will be vital to monitor the dominant, national providers vigilantly and to deploy appropriate incentives to ensure they, and the market in which they operate, behave in the public interest as this will not necessarily follow automatically from competitive pressures alone."
In closing, Jeremy Hunt stated that he expects state aid approval to be gained this autumn, after which local procurements will be able to roll out with the view to the majority of projects being complete by 2015. Funding for the Tier 1 cities that have applied for the Urban Broadband Fund will be confirmed in September 2012 with the successful Tier 2 cities being announced later in the autumn.

Coverage of the speech from the BBC here, ISP Review here, Computer Weekly here and the Guardian here.

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