Friday, June 29, 2012

Everything Everywhere 4G trial update


Further to my posts last month (here and here), Everything Everywhere have now published further information about their 4G trial in Cumbria (commentary from ISP Review here). From the Everything Everywhere press release:
"Employees of various local businesses in the Threlkeld area are testing 4G LTE using both dongles and routers. The trial is achieving speeds of 20 Mpbs, allowing the businesses to achieve new levels of productivity. The area was selected as the location for the trial as it currently has insufficient or unreliable broadband. As data speeds can vary due to a number of factors including the number of people using the network, physical factors such as distance to a mast, building density and geographical terrain, the live network trial in Cumbria will be key to understanding how this LTE technology will perform in real life conditions. The triallists include a regional office of United Utilities, the Blencathra Centre field studies educational facility situated on the side of Blencathra Mountain, the King Kong Climbing Wall, a manufacturing company and multiple web developers."
A few days earlier the company issued this video describing their 4G trials in Cornwall, in collaboration with BT Wholesale:
"Everything Everywhere and BT Wholesale have collaborated to conduct the UK’s first live customer trial of next generation 4G LTE broadband. The trial saw the two companies share their fixed telecommunications and mobile technology to provide wireless broadband to customers across 25 square kilometres of rural Cornwall. The 4G LTE trial in Cornwall focussed on extending reach and accessibility of broadband to customers in rural areas, helping the government to reach its target to extend broadband of at least 2Mbps to the last 10% of the population by 2015."
Previously Everything Everywhere reported that more companies were backing their 4GBritain campaign (as discussed in this previous post):
"Everything Everywhere, the company that runs T-Mobile and Orange in the UK, has announced that eight new supporters including Stuff magazine, PC Advisor and construction group Kier, have demonstrated their backing of a 4G roll out in the UK by becoming supporters of the 4GBritain website. Momentum behind the site has continued since its April launch, with a total of 33 businesses and organisations now official supporters – including the National Farmers Union, The Huffington Post, and Capgemini – amid concern that Britain is falling behind the rest of the world in the roll out of 4G LTE networks. The website’s newest supporters are Kier Group, Macworld, Muzicall, Myallsearch.com, Net Trajectory, PC World, Stuff magazine and Zentek Forensics, further demonstrating the wide range of industries that would benefit from a 4G network roll out."
No word yet from Ofcom on whether Everything Everywhere will be able to deploy 4G services nationally in advance of the forthcoming spectrum auction (more here). In an interview with IT Pro this week, the company hit out at rivals Vodafone and O2, blaming them for holding up the roll out of 4G networks in the UK.

Broadband Commission for Digital Development update


The Broadband Commission for Digital Development has released some interesting announcements and publications this year. The Commission was set up in May 2010 (see this previous post) and I've written about it a couple of times since (see here and more recently here).

At the beginning of April 2012, the Commission published The Broadband Bridge: Linking ICT with Climate Action. From the related press release:
"The report aims to raise awareness of the pivotal role information and communication technology (ICT), and particularly broadband networks, can play in helping creating a low carbon economy of the future, and highlights the importance of public private partnerships in accelerating change. It is based on interviews, case studies and supporting material from more than 20 leaders and experts in the field."
The report claims broadband has a vital role to play in three key areas related to climate change:
  • Transformation: helping other sectors of society to reduce GHGs (greenhouse gases) through dematerialization of physical products and systems, for example, substituting travel with collaborative tools or substituting need to produce physical products by delivering e-products and services
  • Climate mitigation: reducing the sector’s own emissions, often referred to as Greening ICT, for example, specific efforts to cut emissions of greenhouse gases within the ICT industry itself, such as developing energy lean products and solutions, setting and delivering on tough reduction targets
  • Climate adaptation: changes in processes, practices and structures to reduce the vulnerability of natural and human systems to climate change effects. Broadband can provide viable solutions, for example, weather information and disaster alerts.
Later the same month, the Commission published a related call to action (more here) for delegates gathering ahead of the Rio+20 conference to include information and communication technologies (ICT) as catalysts for sustainable development. From the press release:
"The call to include ICT networks, services and applications as enablers of sustainable development was issued at the start of the all-important second round of negotiations on the proposed outcomes for the 2012 United Nations Conference on Sustainable Development (Rio+20). In a world where more people now have access to a mobile phone than to clean drinking water or a bank account, information and communication technologies, in particular broadband connectivity, offer an unparalleled platform to host an array of development services, such as mobile payment systems, e-Health applications, earth observation services and, increasingly, e-Government. Inclusion of a strong reference to the catalytic role of ICTs and broadband in the Rio+20 roadmap will help ensure solutions are found to meet the challenges of sustainable development in a rapidly evolving world where technology is increasingly central to all aspects of society."
From the call to action document:
"We believe that  networked information and  communication  technologies (ICT) can help to achieve a sustainable development model, as  broadband-enabled  innovation in  applications and services promote the integration of ‘smarter’ and more energy-efficient economic growth, social development and environmental protection - the three pillars of sustainable development. For this reason, we believe that the potential to leverage broadband infrastructure and broadband-enabled applications and services should be considered in the outcomes of the Rio+20 Conference."
In May 2012 the Commission released its first country case studies, providing snapshots of the state of broadband in four emerging economies spanning the Americas, Asia and Europe. The case studies are being conducted to underline the importance of broadband and ICTs in achieving the Millennium Development Goals, and to assist countries in meeting the Broadband Challenge and targets adopted by the Broadband Commission in October 2011. From the related press release:
"The case studies, which cover the Former Yugoslav Republic of Macedonia, Panama, the Philippines, and Romania, look at the effect of broadband connectivity on economic growth and access to basic services like education and health. They offer regulatory guidance and best practices, showcasing success stories and lessons learned."
Then in June 2012 the Commission issued an open letter to G20 leaders urging them to do all they can to promote the development of the broadband networks, applications and services that will serve as the catalyst for future socio-economic growth. From the related press release:
"Equating the importance of broadband to essential utilities like water, roads, rail and electricity, the Letter states that governments have a key role to play in stimulating broadband deployment by putting in place pro-competitive and pro-investment policies, lowering barriers to entry and making direct investment, where appropriate. It also stresses the fundamental role of the private sector in driving the roll-out of networks and services, and fuelling ongoing innovation."
Commentary from ISP Review here.

Wednesday, June 27, 2012

More details of BT's FTTP on demand service published today


Further to my previous post in March 2012, Openreach have now published more details of their FTTP on demand pilot service, due to launch commercially in spring 2013 in FTTC-enabled areas (commentary from ISP Review here). From BT's press release:
"The pilot will be held in two phases so that Openreach has sufficient time to explore and resolve the challenges in deploying the service with its Communications Provider (CP) customers. Phase one, which is intended to test the planning and construction process, will run from July 2012 to early 2013 and allow participating CPs to place orders for a 330Mbps downstream, and either 20 or 30Mbps upstream service in parts of High Wycombe, Bristol South as well as in St Agnes, Cornwall where the service was first trialled. Edinburgh’s Waverley exchange will be added to the pilot in September 2012. Phase two, which will run from March to May 2013, will test new automated order processes, and focus on the 330Mbps downstream, 30Mbps upstream product. In addition to the first four areas, this phase will see the pilot extended to parts of Watford, Cardiff, Basingstoke, and Manchester Central...CPs will be able to order the service where there is interest and then assist Openreach with the cost of deployment. It will then be up to the CP to decide whether to absorb that likely one-off charge, recover it through higher monthly prices or pass it on in full to their customer."
Reference is also made to the planned FTTP on demand service in this press release about the impact of BT's recently announced superfast broadband rollout plans in Coventry and Warwickshire:
"By spring 2013 BT aims to make speeds of 330Mbps commercially available in any area where fibre broadband has been deployed...Openreach will levy an installation charge for FTTP on demand. It will be up to service providers to then decide whether they pass that onto businesses or consumers wishing to take advantage of the product."
An interesting charging model, the success of projects like Broadband for the Rural North (B4RN) indicates that there is strong demand for fibre connectivity and also that people are prepared to pay for it. It will be interesting to monitor takeup when the commercial service launches next year.

Australia broadband policy update


Lots of developments and interesting publications from Australia recently. The rollout of the National Broadband Network is continuing; in March 2012 NBN Co announced its three year rollout plan:
"Over the next three years, construction of the fibre optic component of the network will be underway or completed in areas containing 3.5 million premises in 1500 communities in every state and territory in Australia - up to one third of the nation’s homes and businesses."
Ministerial press release here. A few weeks earlier, the Australian Competition and Consumer Commission (ACCC) announced it had accepted Telstra's structural separation undertaking (SSU) and approved its draft migration plan (ministerial release here). The Telstra Agreement will allow for existing Telstra telecommunications infrastructure to be used for the NBN rollout and Telstra customers to be migrated to the NBN. NBN Co's statement identified this as the removal of "the final major obstacle in the way of the large-scale rollout of the National Broadband Network." Good to see that an area of the NBN Co website is specifically for schoolsMore recent ministerial NBN Co announcements report on the rollout of fixed wireless services in areas beyond the reach of the fibre network that will serve the majority of the country, for example in Far North Queensland. From a related NBN Co press release:
"NBN Co’s fixed wireless network is designed to offer internet service providers with wholesale access speeds of up to 12Mbps, with plans for higher speeds to become available in the future...Unlike a mobile wireless service where speeds can be affected by the number of people moving into and out of the area, NBN Co’s fixed wireless network is engineered to deliver services to a fixed number of premises within a coverage area."
The third review of the NBN by the Joint Standing Committee on the National Broadband Network has just been published, following publication of the Australian Government's response to the second review in April 2012 (details and the first two reports available here). In addition, the Regional Telecommunications Independent Review Committee, which reviews telecommunications services in regional, rural and remote parts of Australia every three years, published the results of its 2012 review in May, identifying the importance of broadband for education in rural and remote areas. An interesting new report, Smart Technologies for Older People, by the University of Melbourne's Institute for a Broadband-Enabled Society (IBES) addresses the challenges faced by an ageing population and how smart technologies can support older people to remain in their homes. The report includes some startling observations:
"In 2012 the percentage of the world population 65+ was 6.9%, and this is estimated to increase to around 20% by 2050 (Organisation for Economic Co-operation and Development, 2001).This population ageing is unprecedented, without parallel in human history. The 21st century is witnessing even more rapid ageing than did the century just past. Population ageing is pervasive, a global phenomenon affecting every man, woman and child. Different countries are at very different stages of the process, and the pace of change differs greatly. For example, Japan has experienced very rapid ageing to which it has had to quickly respond. Countries like Australia are experiencing a more gradual process where they do have time to adjust (Organisation for Economic Co-operation and Development, 2001). Population ageing is enduring. We will not return to the young populations that our ancestors knew. Population ageing also has profound implications for many facets of human life, including work, housing, transport, leisure, health and relationships."
The study echoes the findings and recommendations of a recent EU report"It is unlikely that the future needs for aged care services in Australia will be able to be addressed by the systems, policies and technologies currently in use in Australia." The opportunity broadband technology presents in this area is clear:
"Products and services based on new technology, such as ICT are developing rapidly, and are used by large parts of the population, including elderly people. Increasingly people between the ages of 55-74 are adapting to use of the internet, mobile telephones, tablets and gaming technologies (Australian Institute of Health and Welfare, 2007; Haukka, 2011). For many it will be possible to prolong the period living at home and at the same time feel safe. Monitoring and treatment of chronic diseases can be of higher quality and more continuous. Moreover rehabilitation and many health and social care services can be received in the home setting (Access Economics, 2010). Necessary healthcare can also be given outside home while people are in transition. Tracking technologies can give older people, including those with chronic disease such as dementia, arthritis and coronary conditions, security and freedom to move outside of their home. The internet can support and strengthen the elder’s possibilities to take part in society, communicate with the healthcare system, and access social arenas. Technologies, such as those used in “smart homes” and tracking solutions, can relieve the pressure on caregivers and support their caring work. Administrative technology can aid health personnel in doing a more focused job, where more time can be dedicated to direct contact with patients and to health related tasks...The roll out of the National Broadband Network offers a unique opportunity to link Australians with state-of-the-art technologies with the potential to improve health, well being and quality of life."
Another recent IBES report investigates how new technology in the form of tablets can reduce social isolation in older Australians. Finally, A Snapshot of Australia’s Digital Future to 2050 is a report commissioned by IBM examining how "information and communications technology (ICT) enhanced with ubiquitous high-speed broadband is becoming Australia’s new utility – as historic and game changing as electricity or telephony." From the executive summary:
"Already in 2012, ICT enhanced by emerging high-speed broadband and online information is expected to deliver revenue of $131 billion in Australia. Based on this report by 2050, this new utility will generate around $1 trillion in revenue. Reports indicate that, for every ten percentage point increase in broadband penetration, GDP increases by 1%; doubling an economy’s broadband speed increases GDP by 0.3%. Today, even with our present ‘pony express’ form of broadband, the value of the internet to the Australian economy rivals iron-ore exports."

Friday, June 22, 2012

The Broadband Imperative - broadband in U.S. schools


The findings of a new U.S. report - The Broadband Imperative:  Recommendations to Address K-12 Educational Infrastructure Needs - from the State Educational Technology Directors Association (SETDA) are equally as applicable in the UK. The report highlights the increasing importance of broadband for students, teachers and schools:
"It is a simple fact that access to high-speed broadband is now as vital a component of K-12 school infrastructure as electricity, air conditioning and heating...out-of-school access to broadband by students and teachers is now arguably as important to the overall quality of the student learning experience as access at school."
It also warns that current provision is already insufficient for many schools in the U.S.:
"...nearly 80% of respondents reported that their broadband connections were inadequate to meet their current needs. Outside of school, home broadband adoption rates have all but stalled since 2009, levelling off at roughly 65%...If we want our schools to make the most of rich, online curricular resources, online assessment tools, web-based collaboration systems, digital textbooks, and a host of evolving educational technologies that are quickly becoming essential in a globally competitive world, schools will need more bandwidth. If we truly want to ensure that our students become the innovators who will help the U.S. lead the world, it is imperative that we provide robust broadband access not only to every classroom, but also to every students' and teachers' home and wherever we expect learning to take place."
In the light of this, SETDA recommend that the minimum targets below are met between now and the 2017-18 school year:


The report makes reference to the ambitions set out in both the U.S. National Broadband Plan and the U.S. Department of Education's National Educational Technology Plan (NETP):
"Among the (National Broadband) Plan's K-12-related recommendations for minimum broadband standards in schools, it suggests providing schools more flexibility to purchase lower-cost broadband solutions, and greater efforts to make overall broadband-related expenses more cost-efficient within the E-Rate program. The Plan also recommends providing 1Gbps connections to community anchor institutions, such as hospitals, libraries, and schools...Among the recommendations (of the National Educational Technology Plan) is a call for a "comprehensive infrastructure for learning" that includes "broadband access to the Internet and adequate wireless connectivity both in and out of school" for all students and teachers."
It's a shame that there is currently no U.K. equivalent to the National Educational Technology Plan; in addition, while the U.K. Government's strategy paper Britain's Superfast Broadband Future does at least acknowledge the importance of broadband for education, it doesn't contain any specific recommendations or actions in this area. The SETDA report recognises the progress that has been made in U.S. broadband policy, particularly in rural areas, but states there is still much to do:
"While public-private partnerships and federal leadership are helping to draw attention to this issue and to spur the deployment of broadband access to unserved and underserved areas of the country, recent initiatives and programs have in no way resolved the national issue of inadequate and inequitable broadband access for learning in K-12 schools and in homes."
The report also recognises the important aggregation role performed by state broadband networks, similar to the U.K. regional networks that, interconnected by the Janet network, form the National Education Network:
"These networks provide significant advantages for K-12 schools and districts, including the ability to aggregate purchasing power and enable dynamic routing, which reduces the need for expenditures for so-called commodity Internet services (i.e., commercially available connections to the Internet). A state network can save significant time, personnel resources, and costs as each school or district would otherwise have to conduct a competitive procurement process individually. This approach can provide a base level of connectivity service while allowing for the uniform deployment of state sponsored applications and services. State networks also allow members to purchase additional services and to exercise local control of their level of service. Finally, a state network can provide consistent levels of safety and security over the network to comply with federal and state requirements such as content filtering...leadership at the state and district level can enable the management and upgrades needed to achieve adequate bandwidth for K-12 learning environments."
The SETDA report references a study I covered in this previous post:
"In their 2010 teacher survey, PBS and Grunwald Associates found that the percentage of teachers reporting that they stream or download video content in the classroom increased from 55% in 2007 to 76% in 2010. Most of those teachers (78%) also reported bandwidth associated problems when they streamed video - skipping, pausing, or constant buffering - indicating, as the report states, that their "computing devices or technology infrastructure, or both, do not yet have the capacity to handle teachers' increasingly Internet-dependent instructional activity.""
Key to this is not only connection speed but also the number of concurrent users, of which there are more and more as students bring their own devices into school:
"New economic realities are changing policies and attitudes about students bringing their own technology tools to school. The new "Bring Your Own" Device/Technology (BYOD/BYOT) trend is becoming more common in school districts as an increasing number are not only allowing students to bring smart phones and laptops they own to school, but they are encouraging it. These BYOD initiatives permit students to access the school's wireless network, therefore increasing demand."
In closing, the report recommends that state leadership and state broadband networks should continue to play an important role:
"State leadership could entail expanding broadband coverage via the implementation of cost-effective state broadband networks and working in partnership with school districts to leverage federal and public-private partnership programs in support of a state's broadband needs."
Additional resources will be needed if SETDA's aims are to be achieved:
"SETDA recommends the federal government increase funding options to support a) states in implementing and maintaining high-speed broadband, statewide networks, b) districts and schools in increasing bandwidth capacity, c) communities in providing access points at anchor institutions, including but not limited to, libraries and community centers, and d) low-income families' access to broadband at home."

US Ignite partnership launches


Earlier this month President Obama announced the US Ignite partnership (see this previous post):
"The US Ignite Partnership will create a new wave of services that take advantage of state-of-the-art, programmable broadband networks running up to 100 times faster than today’s Internet. By bringing software developers and engineers from government and industry together with representatives from communities, schools, hospitals, and other institutions that will benefit from faster and more agile broadband options, the partnership aims to speed up and increase the development of applications for advanced manufacturing, medical monitoring, emergency preparedness, and a host of other services. These applications will improve services to Americans and drive job creation, promote innovation, and create new markets for American businesses."
Focusing on new applications that can exploit speeds of up to 1Gbps, this new partnership will:
"...create a national network of communities and campuses with ultra-fast, programmable broadband services, operating at speeds of up to 1 gigabit per second.  This network will become a test-bed for designing and deploying next-generation applications to support national priorities areas such as education, healthcare, energy, and advanced manufacturing. US Ignite will challenge students, startups, and industry leaders to create a new generation of applications and services that meet the needs of local communities while creating a broad range of job and investment opportunities.  This initiative will open up countless new opportunities for households and small businesses, helping them experience the economic and community benefits of next-gen applications while demonstrating a path for other communities to join."
More information including details of projects and participants here and also on the White House Blog. Commentary from Broadband Breakfast:
"The three major elements of the US-Ignite initiative include, first, integrating research campuses, networks and cities by leveraging previous investment in network infrastructure through the use of the Global Environment of Network Investment (GENI). GENI which is a virtual research lab for scaled network experiements for the future internet is funded through the National Science Foundation (NSF) which is the lead agency responsible for foundational research into software defined networking and public sector gigabit applications and services. The second element of the initiative involves jumpstarting at-scale experimentations on public sector applications and services through the NSF funded, Mozilla Open Innovation Challenges program that enables peer based learning and exchange through workshops and open source application development competitions. The third element is the creation of the US Ignite Partnership, a public private, independent non-profit organization to bring together industry, foundations and community partners and resources."
This from Talking Points Memo:
"The White House has not given a total cost estimate for how much money the government and private companies are collectively sinking into the US initiative, but the program doesn’t call for much new spending on its own, rather, it consolidates a number of formerly independent efforts by federal agencies and companies under one umbrella and under one goal: Prepare the country for an age when the Internet is way faster than what most users currently experience."
And this from industry analyst Craig Settles, highlighting the importance of local community involvement too:
"The Northeast Kingdom (NEK) of Vermont (Caledonia, Essex and Orleans Counties) spent probably less than 10% of what US Ignite partners plan to spend, but in a contest that offered lots of small-dollar prizes to the businesses that created the best uses of the Internet in their respective companies. 35 – 50 businesses created apps that met their needs. Some undoubtedly could be duplicated. Go for the big-buck, high-profile contest, but spend some of that money for smaller contests that get a lot of creativity bubbling up from the communities. So many peeps want to hit a grand slam when for many market segments the “killer app” will be the one that makes doing the basic job functions more effective or more efficient. There’s gold in the simple apps of life."
The launch of US Ignite also included the announcement of new measures to make broadband construction and deployment faster and cheaper, echoing this current EU consultation.

Thursday, June 21, 2012

Ofcom's Business Connectivity Market Review - physical infrastructure access (PIA) considerations


Interesting to see this in the press release announcing Ofcom's latest Business Connectivity Market Review (full details here) this week:
"The Business Connectivity Market Review, published today, looks at the £2bn wholesale market for ‘leased lines’ used by businesses and by mobile and broadband operators to transfer data on their networks. Leased lines also provide vital high-speed links between schools, universities, libraries and other public bodies."
Commentary from ISP Review here; Ofcom's summary also acknowledges the importance of this market to the public sector:
"Leased lines provide dedicated symmetric transmission capacity between fixed locations, and their overall value exceeds 2bn per annum in the UK. They play an important role in business communications services and are used to support a wide variety of applications, both in the private and public sectors."
The full consultation document is huge - almost 900 pages in total. The summary addresses concerns raised previously regarding the limitations of Openreach's duct and pole access products, also known as physical infrastructure access (PIA):
"We have also considered the case for imposing an alternative or additional set of requirements known as passive remedies, such as requiring BT to provide access to its ducts, poles or dark fibre. We are not proposing such passive remedies, because we consider that less intrusive remedies are likely to achieve similar benefits for consumers, while passive remedies would carry significant risks of worse outcomes, both for consumers and for effective competition, including adding costs and encouraging inefficient entry."
The current PIA obligations on BT were imposed following Ofcom's review of the wholesale local access (WLA) market in 2010. However there was much criticism at the time that the scope of the PIA proposals was not wide enough (see this previous post). However, Ofcom do not propose to extend the scope of PIA as part of this review:
"A number of stakeholders argued that we should extend the scope of PIA to include applications in leased lines. Mobile network operators (MNOs) have told us that PIA could help them to fulfil their requirements for backhaul from RBS for 4G services and to address their concerns that the costs of backhaul will escalate as demand for mobile data services continues to increase. Our current view is that if we were to continue, as we do now, to require BT to provide wholesale leased line services rather than access to its passive assets, the industry, including BT, is likely to meet MNOs’ requirements for backhaul services in reasonable timescales, and with improving technical efficiency. We also consider that MNOs’ concerns about the future costs of backhaul could be addressed by price controls which we are proposing to impose on BT."
As well as being crucial for mobile operators, others have argued that extending the scope of PIA is essential  for investment in next generation access:
"Other stakeholders argued that extending the scope of PIA to include leased lines is critical to generate the long-term cash flows needed to justify investment in fixed next-generation access networks. We recognise that, in contrast to the leased lines market, there is potentially insufficient investment in local access fibre to support super-fast fixed broadband services, particularly in areas outside BT’s planned deployment of such services. We noted in our review of the wholesale local access market that PIA could be a more attractive option for deploying new next-generation access networks in such areas. We remain open to evidence that shows that investment in next-generation access networks could be unlocked if PIA could be used for leased lines services, to help us formulate our policy in relation to such investment."
Section 8 of the review considers passive remedies in more detail, with the following summary:
"...we do not consider that we should impose passive remedies to address competition issues in leased lines markets in this review. Our current assessment is that the case for imposing such remedies is weak because:
  • while we recognise that it is possible that passive remedies could improve the prospects for competition generally, our analysis of the cases put forward by stakeholders suggests that the potential benefits that could flow from doing so could to a large extent be achieved by imposing alternative remedies such as price controls on BT’s provision of active wholesale access services.
  • at the same time, we consider that imposing passive remedies in leased lines markets, either in isolation or in combination with active remedies, could carry significant risks of worse outcomes than continuing to impose active remedies alone, and the competition issues we have identified can be effectively addressed with other, less intrusive remedies."
However, as stated above, Ofcom are willing to consider the matter further in relation to extending the roll-out of NGA services:
"Some stakeholders have argued (both at the time, and as we have set our earlier in this section in relation to Fujitsu and Geo) that limiting use of PIA to the WLA market does not allow them the necessary economies of scope and scale to make NGA deployment viable. That is, they argue that if both NGA and business services were allowed, the case for deploying NGA networks would become more favourable. We remain open to any evidence that shows that NGA investment could be unlocked by being able to use PIA for leased lines services, which could help us to formulate our policy in this area."
These statements on PIA are particularly interesting in relation to the European Commission's current consultation on reducing NGA deployment costsOfcom's consultation closes on 24 August 2012 and it expects to publish a statement on its conclusions early in 2013. 

Super-connected cities update: Belfast, Birmingham & Leeds


Some interesting super-connected cities developments in recent weeks. Belfast has announced plans to make the city "one of the most advanced cities in Europe for ultra-fast broadband and widespread WiFi provision by 2015". Belfast  is one of 10 UK cities eligible for the first wave of super-connected cities funding being made available by the Department of Culture Media and Sport (DCMS), to extend broadband access and provide extensive high speed wireless connectivity across the city. DCMS will provide £6m; the city is currently preparing a second stage submission for additional funding up to £7.7 million and will also allocate an additional £3 million to the project. See coverage from the Belfast Telegraph, ThinkBroadband, ISP Review and the BBC.

Another of the 10 UK cities, Birmingham, recently received clearance from the European Commission for its proposal to invest around £10m in the construction of an ultra-fast broadband network in the city of Birmingham (press release here). The investment was found to be in line with EU state aid rules, in particular because it will be genuinely open to all operators and will therefore promote competition:
"The Commission's investigation found that the ultra-fast network of Birmingham was designed in a pro-competitive manner, exceeding in several respects the requirements of the EU Broadband Guidelines. In particular, open access will be granted for at least 25 years for alternative operators, whereas the guidelines require only seven years. Moreover, the network will be operated on a wholesale basis so as to ensure more competition at retail level. Finally, all possible wholesale access products will be offered to third party operators, including dark fibre, which is one of the most pro-competitive wholesale access products. The project is also fully in line with the requirements of the new draft Broadband Guidelines...in particular by offering significant enhanced technological characteristics as compared to existing networks (for instance symmetric speeds). There is expected demand for such qualitative improvements from numerous local SMEs active in the "creative industry". Moreover, the subsidised network will be operated as a wholesale only network."
More on the EU's new draft broadband guidelines here with comment from ISP Review here. A formal procurement process in accordance with Official Journal of the European Union (OJEU) guidelines will now be carried out by Birmingham City Council to secure a formal partner for the delivery of services. It is expected that this will commence in autumn 2012.

Finally, Leeds, another of the 10 cities announced by DCMS in March 2012, was found to have the highest proportion of people connecting to public Wi-Fi compared with other cities in the UK, according to a study by Sky Broadband. From Broadband Choices:
"According to Sky, in a single day, one in five people in Leeds (22%) used public Wi-Fi. That’s twice the national average, which was 11% at the time of the study. It’s also more than other cities, including Manchester (13%), Birmingham (13%) and London (20%)."
Additional coverage from ISP Review here and uswitch here.

Wednesday, June 13, 2012

European Commission consults on draft Guidelines for broadband networks


Earlier this month the European Commission published (in draft for comment) an updated version of its state aid guidelines for broadband networks (press release here), further to this consultation in 2011.

According to the press release, last year's consultation showed that "most stakeholders found that the existing rules worked well and required no significant modifications, but considered that there was scope for more clarification." As identified by ISP Review, the new draft guidelines also recognise the need to support the roll-out of ultra-fast (100Mbps+) networks where appropriate and compatible with state aid regulations.

The ever-growing demand for additional bandwidth is acknowledged early in the draft guidance:
"Demand for capacity-intensive services is expected to increase in the future, as cloud computing, a more intense use of peer to peer technologies, social networks and video on demand services will develop further."
The guidance also acknowledges the need for public funding of broadband infrastructure if the Digital Agenda for Europe 2020 targets are to be met:
"The Europe 2020 Strategy has underlined the importance of  broadband deployment to promote social inclusion and competitiveness in the EU. It restated the objective to bring basic broadband to all Europeans by 2013 and seeks to ensure that, by 2020, (i) all Europeans have access to much higher internet speeds of above 30 Mbps and (ii) 50% or more of European households subscribe to internet connections above 100 Mbps."
The guidance goes on to explain the importance of managing state aid in this area:
"Any state intervention should limit as much as possible the risk of crowding out private investments, of altering commercial investment incentives and ultimately of distorting competition to an unacceptable extent...State aid measures can, under certain conditions, correct market failures, thereby improving the efficient functioning of markets and enhancing competitiveness. Further, where markets provide efficient outcomes but these are deemed unsatisfactory from a cohesion policy point of view, State aid may be used to obtain a more desirable, equitable market outcome. In particular, a well targeted state intervention in the broadband field can contribute to reducing the 'digital divide' between areas or regions where affordable and competitive broadband services are on offer and areas where such services are not."
Public funds are thus important to "extend broadband coverage in areas where there is no incentive for commercial operators to invest in and accelerate the deployment of very high speed, next generation access networks." The guidance goes on to explain the criteria used to determine whether a proposed investment is appropriate, with particular regard to ensuring that a minimum of market distortion occurs. It now distinguishes between basic broadband, NGA (next generation access) networks and ultra-fast networks:
"Several different technology platforms can be considered as basic broadband networks including asymmetric digital subscriber line (ADSL), cable, mobile, wireless and satellite solutions. At the current stage of market and technological development, NGA networks are wired access networks which consist wholly or partly of optical elements and which are capable of delivering broadband access services with enhanced characteristics (such as higher throughput) as compared to those provided over existing copper networks. They are able to deliver services at very high speeds and support a multitude of advanced digital converged services. At the current stage of market and technological development, NGA networks are therefore wired fibre-based or advanced upgraded cable networks."
A footnote provides further explanation of what does and does not constitute NGA network technology:
"At this stage of technological and market development, neither satellite nor mobile or wireless network technologies (including LTE) appear to be capable of providing very high speed (symmetrical) broadband services, in particular since these technological solutions are "shared", thus the speeds will depend on the number of connected users in the area covered. However, given the rapid evolution of technology the Commission will closely follow the technology advancements and change the NGA definition and its interpretation accordingly, if technologies have changed."
The draft guidance also acknowledged that NGA is about more than headline speeds:
"However, while connection speed is one important characteristic of NGA networks, at the same time it is not the only one. Apart from a certain download speed, future-proof NGA networks – which are more adequate for urban areas - are understood to have at least also the following characteristics: (i) provide enhanced connectivity (ii) provide the possibility of symmetric speeds and (iii) represent a sustainable and non-temporary technological advancement by extending fibre until the customer premises (iv) supports infrastructure-based competition."
The guidance asserts that NGA represents a step-change in technology rather than an upgrade, underlining the risk of a new digital divide if areas are left behind:
"It is important to bear in mind that in the longer term NGA networks are expected to supersede existing basic broadband networks and not just to upgrade them. To the extent that NGA networks require a different network architecture, offering significantly better quality broadband services than today as well as the provision of multiple services that could not be supported by today’s broadband networks, it is likely that in the future there will be marked differences emerging between areas that will be covered and areas that will not covered by NGA networks."
The following recommendations are made in respect of supporting investment in ultra-fast broadband networks:
"In light of the Digital Agenda objectives, in particular achieving 50% penetration to internet connections above 100 Mbps, public intervention would still be possible in areas where existing or planned NGA networks do not reach the end user premises with fibre networks."
Again, a footnote provides further clarification:
"...NGA networks do not reach end user premises with fibre in case of FTTN networks, where fibre is installed only until the nodes (cabinets). Similarly, some cable networks are also using fibre until the cabinets and connect end-users with coaxial cables."
...which I take to mean that the guidelines support public funds being used to top-up private sector investments, to convert FTTC deployments to FTTP where the required criteria can be met. One of these relates to demonstrating a clear "step change" over existing infrastructure: any new infrastructure must have "significant enhanced technological characteristics" compared to existing networks (for instance through symmetric speeds), thereby making it future-proof. There must also be expected demand for such improvements and the subsidized network must operate as a wholesale only network.

Comments on the draft guidelines should be submitted by 3 September. On the basis of the comments received, the Commission intends to adopt definitive Broadband Guidelines in December 2012.

Tuesday, June 12, 2012

EU net neutrality update


This announcement last month from Neelie Kroes, Vice-President of the European Commission responsible for the Digital Agenda, provides an introduction to a huge amount of analysis into net neutrality undertaken by BEREC, the Body of European Regulators for Electronic Communications. Further background here.

BEREC's analysis sought to investigate the detail of net neutrality issues and concerns, to provide guidance for European telecommunications regulators to enable them to respond appropriately. BEREC's recommendations, endorsed by Neelie Kroes, are based on the principle of transparency, that customers should get what they pay for. At the same time the recommendations acknowledge the importance of not standing in the way of developments in the marketplace, so long as consumers have choice and the ability to switch service provider quickly and easily should they choose to do so.

BEREC published its recommendations on transparency in December 2011, prior to the recent announcement, in the form of Guidelines on Transparency in the scope of Net Neutrality: Best practices and recommended approaches. This acknowledged that while transparency is important, alone it is "probably insufficient to achieve net neutrality, firstly because it requires other factors in order to produce results – the existence of competition in the market, the reduction of barriers to switching are, among others, important factors that, alongside transparency, can contribute to achieving the objective of net neutrality." Transparency in this context is about much more than headline speeds:
"...details regarding services with fixed connectivity should not be limited to a single “maximum speed” figure. The real values typically achieved at a certain time should be detailed: actual download but also upload speeds, the difficulties that may impact their provision, and the conditions to deliver minimum levels, when these are offered. Furthermore, information on other elements regarding the quality at which the service is offered, such as delay, jitter, packet loss or packet error, might be of interest..."
But only to a very informed customer would be my guess. BEREC also recommended that:
"...providers should clearly explain any general limitations, as well as any consequences of exceeding such limits. In this regards, explicit conditions such as data caps and download limits seem to be preferable over fair use policies. Information on traffic management techniques, applied either on types of traffic or content, should be provided to end users along with information on about how these techniques may affect the end users’ access service. Application agnostic and application specific traffic management techniques
should be clearly distinguished."
Also in December 2011 BEREC published A framework for Quality of Service in the scope of Net Neutrality, to elaborate on article 22 (3) of the European Universal Service Directive (see page 25):
“In order to prevent the degradation of service and the hindering or slowing down of traffic over networks, Member States shall ensure that national regulatory authorities are able to set minimum quality of service requirements on an undertaking or undertakings providing public communications networks...”
The framework categorises the effect of traffic management practices  into two main groups: degradation of the performance of the Internet access service as a whole (i.e. everything slows down), and degradation of individual applications using the access (for example, throttling peer-to-peer file sharing). A useful distinction.

Back to last month's announcement: building on these previous documents, BEREC published three draft documents for public consultation: Guidelines for Quality of ServiceAn assessment of IP-interconnection and Differentiation practices and related competition issues. These were accompanied by an explanatory paper and a snapshot of current practices in the form of A view of traffic management and other practices resulting in restrictions to the open Internet in Europe, together with this press release.

This summary of BEREC's programme of work in this area is from the explanatory paper:
  • Guidelines on Transparency in the scope of net neutrality: Transparency is mandatory for any traffic management practice, and helps to foster competition and discipline ISPs through enhanced competition and the users’ ability to exercise choice.
  • Framework and Guidelines for QoS in the scope of net neutrality are about assessing "degradation of service" and the conditions and ways to use the new article 22(3) USD, i.e. how to intervene when deemed necessary.
  • Differentiation practices and related competition issues in the context of net neutrality is an economic analysis about which practices may cause harm to end-users, and under which conditions.
  • NGN IP interconnection & net neutrality is an overview of IP interconnection markets and economic relationships between operators assessing the regulation with regard to IP interconnection in the context of Net Neutrality.
The first bullet above was addressed by the guidance published in December 2011 discussed earlier, the remaining three are addressed by the three consultation documents I mentioned previously, against which comments are invited by 31st July 2012. The same explanatory document includes this summary of the observations made and conclusions drawn by BEREC thus far:
  • While not providing a guaranteed delivery of data, the best effort approach of the Internet does not necessarily imply low performance.
  • The separation of network and application layers is a characteristic feature of the best effort Internet, and it has enabled innovation and growth.
  • The IP interconnection market has developed very well so far without any significant regulatory intervention.
  • While traffic management and other differentiation practices are not intrinsically harmful, they are nonetheless capable of being used for questionable purposes or in an inappropriate manner.
  • Providing information on these restrictions is mandatory – the information must be understandable and comparable for end-users to exercise choice, and accurate enough for NRAs to monitor ISPs’ practices.
  • The situation is different in different Member States, and BEREC is proposing general criteria to enable NRAs to evaluate traffic management practices on a case-by-case basis in their respective markets, including e.g. whether they are application-agnostic and whether the end user has control, whether the practice is objectively justified, proportionate and non-discriminatory.
  • Beyond this, given the complex and evolving nature of the Internet, detailed prescriptive rules do not seem appropriate at the moment.
"BEREC is committed to the open Internet, and believes that the existing regulatory tools should enable NRAs to address net neutrality related concerns for the time being"...the UK would appear to concur with this view, as discussed in this previous post (commentary from ISP Review here, with their take on on BEREC's recent recommendations here).

Finally, this development from the European Telecommunications Network Operators' Association (ETNO, ISP Review coverage here and ZDNet's here) is interesting in the light of BEREC's recommendations. ETNO is calling for changes to the International Telecommunications Regulations to permit new commercial arrangements and encourage future growth:
"By endorsing the concept of “quality based delivery”, it will be possible to establish new interconnection policies based on the “value” of the traffic (not only on the “volume”), enabling  new business models and implementing  an ecosystem where operators’ revenues will not be disconnected from the investment needs made necessary by the rapid growth of Internet traffic."

Friday, June 08, 2012

Additional broadband funding for Scotland


Further to my previous post, ISP Review report that Scotland has now been allocated an additional £32m by Broadband Delivery UK (BDUK) "to help it deliver superfast broadband (40-80Mbps) to 85-90% of premises by 2015 and “world-class digital access” to all of Scotland by 2020." The request for additional funding was described in Scotland's infrastructure action plan, published in January 2012:
"We believe Scotland has a case to make for additional funding from BDUK, given the particular geographic and technical challenges we face and we will be making that case to UK Government. Scotland can also expect funding from the UK Government for ‘superfast cities’ (£100m Urban Broadband Fund) and for mobile ‘not spots’ (£150m Mobile Infrastructure Project)."
According to ISP Review, Scotland will also receive additional UBF and MIP funding, though related distributions are still being finalised.

EU consultation on reducing NGA deployment costs


The EU is currently consulting on ways to reduce NGA deployment costs, in order to encourage greater investment and faster roll-outs:
"The cost is so high because of a lack of coordination of civil engineering projects, insufficient re-use of existing infrastructure and lack of cooperation between the various actors. For example, water, energy, and railway companies often have their own infrastructure, and dig up roads without coordinating with telecoms companies. Faster roll-out is then further impeded by lengthy, non-transparent and cumbersome procedures for clearing rights of way and obtaining all necessary permits at national or local level."
From the consultation document:
"One of the often cited reasons for investment shortfalls are high costs in today's difficult financial climate. According to current estimates, it could cost more than 200 billion EUR to bring high speed Internet to all Europeans in line with the agreed Digital Agenda targets. However, several studies suggest that up to 80% of total investment costs are related to civil infrastructure works. Moreover, a substantial part of this high cost (possibly up to 30%) can be attributed to inefficiencies in the roll-out process, for example because of a lack of coordination of civil engineering projects, insufficient re-use of existing infrastructure, a lack of cooperation between utilities. Faster roll-out can be further impeded by lengthy, non transparent and often cumbersome procedures for clearing rights of way and obtaining all necessary permits at national or local level."
Current circumstances also impede cross-border investments, in relation to the EU's ambitions for a digital single market:
"This emerging patchwork of rules at national and sub-national levels perpetuates fragmentation of the single market and leads to investments costs which are much higher than they ought to be. For a company operating on cross-border basis, such a patchwork of rules, procedures and practices at national, regional and even local level drives up costs to a point of challenging the profitability of investments and as such constitutes an important barrier. It is likely to negatively impact companies' ability to invest and reduce any economies of scale in this investment. Inevitably, this reduces competition and reduces consumers' benefits who will end up paying more for their high-speed Internet connection."
The consultation runs until 20th July 2012. These issues were also flagged in an EU working document published in March 2012, examining the implementation of national broadband plans across Europe:
"Building permits and rights of way can be costly in terms of time and resources. Delays compound construction risks and can render projects unprofitable. Streamlining of administrative processes and increasing legal certainty can bring benefits but, so far, there is little trace of these in national broadband plans. Examples: One of the sub-groups of the Irish Government’s Next Generation Broadband Taskforce (NGBT) is examining how best to remove barriers to the roll-out of the physical infrastructure needed for Next Generation Broadband. The barriers identified involve the process and costs surrounding planning applications by network operators and applications to carry out road works associated with telecoms infrastructure. Some countries (e. g. Bulgaria) have set a maximum period of six months for issuing construction permits for electronic communications infrastructure."
As stated above, a number of attempts have been made to address these challenges across Europe, including the implementation of physical infrastructure access (PIA) in the UK. The Finnish Ministry of Transport and Communications has published Best Finnish Practices on Joint Construction of Infrastructure Networks, reporting on successes there, while the UK's National Planning Policy Framework published in March 2012 acknowledges the importance of broadband investment: the framework recommends that planning authorities should "support the expansion of electronic communications networks, including telecommunications and high speed broadband". They should not "impose a ban on new telecommunications development in certain areas, impose blanket Article 4 directions over a wide area or a wide range of telecommunications development or insist on minimum distances between new telecommunications development and existing development."

Similarly, the UK Department for Communities and Local Government published a detailed guidance note in 2008 on data ducting infrastructure for new homes, which aimed to "give developers the opportunity to consider the installation of infrastructures within new developments and dwellings to support the later provision of data services by third parties" and "reduce the risk of ‘non-standard infrastructures’ (for example using ad hoc ducting types and topologies) leading to future incompatibility issues within different developments."

Also in 2008, Ofcom published a statement on next generation new build, focusing on how to ensure the right regulatory environment, for example to encourage competition through appropriate wholesale obligations. Finally, in November 2011, the UK Department for Culture, Media and Sport published guidance for local authorities on microtrenching and street works which sought to "remove barriers and provide certainty to agree on the best use of microtrenching...an innovative deployment technique that is generally cheaper, less disruptive and quicker than conventional dig techniques...(and) to highlight flexibilities in the existing street works regime which could enable more rapid deployment of networks by utilities (including communications providers)."

The current EU consultation is seeking to identify "a coherent set of measures at EU level aimed at significantly reducing the cost, and bringing out efficiencies in the process of rolling out high-speed communication infrastructure across Europe. The main areas of action could be enhancing the re-use of existing (passive) infrastructure, improving transparency and facilitating the coordination of civil engineering works, streamlining administrative procedures involved in permit granting, and ensuring that new buildings are equipped with open, next generation access."

Some of these aspects would seem at least partially addressed by the examples above, though there is clearly more that could be done. It will be interesting to see the consultation's outcomes.

Wales broadband policy update


The starting point for current broadband developments in Wales is the Welsh Government's strategy paper Delivering a Digital Wales, published in December 2010 (see this previous post). This set out the following ambitions for broadband infrastructure:
"The aim is to achieve near universal access to a basic level of broadband throughout Wales by the time that a new UK-wide universal service commitment for broadband is introduced. These activities will therefore support the UK Government’s intention to introduce new Universal Service Commitment (USC) of 2Mbps across the UK by 2015. We will ensure that our relationship with UK Government’s Broadband Delivery UK (BDUK) is clearly articulated and is sufficiently robust to influence UK Government decisions on investment and activity via the delivery of the Commitment in Wales. The introduction of the Universal Service Commitment enables the Welsh Assembly Government to look towards the future and concentrate on next generation broadband services."
The strategy looks beyond the USC and 2015 to 2016 and 2020 (in keeping with the EU's ambitions) as target dates for next generation and ultra-fast broadband availability:
"We...believe an ambitious, yet reasonable, challenge to the private sector is to think beyond the limitations of the current infrastructure and to work with us to rapidly achieve full access to ultra-fast broadband throughout Wales...We will seek to ensure that market led private investment in next generation broadband and additional next generation deployment through public sector intervention, will together deliver high-speed broadband services throughout Wales. We expect that all businesses in Wales will have access to next generation broadband by the middle of 2016, and that all households will be enabled by 2020. Furthermore, we will ensure that any next generation broadband infrastructure funded through public sector intervention will be capable of delivering broadband services of at least 30Mbps, and ideally 100Mbps, to avoid the need for repeat investment at a later date."
The strategy also acknowledged the importance of the Public Sector Broadband Aggregration (PSBA) project as a foundation for future developments:
"A coherent pan-Wales approach to public service infrastructure will provide the underpinning services that need to be put in place to collect, store and share information securely and confidentially. One major component is already in place in the Public Sector Broadband Aggregation (PSBA) network. This network is recognised globally as presenting a huge strategic advantage for future collaborative service delivery as well as offering the potential to influence local broadband availability in communities served by the PSBA...(the PSBA is) one of the first totally integrated Public Sector Networks in the UK, connecting more than 2000 sites across Unitary Authorities, Hospitals, General Practitioners, Universities, Further Education Colleges, Emergency Services, and a growing number of organisations funded by the public sector."
In January 2011 the Welsh Government held a workshop for potential suppliers, providing more information about the project, its scope and detailed briefings on strategic, commercial and technical aspects (presentation here). This was followed in February 2011 with the commencement of a formal procurement process (prior information notice here and contract notice here):
"The primary aim of the project is to ensure that: (i) all businesses in Wales have access to a minimum of 30 Mbps by the middle of 2016, (ii) all residential premises in Wales have access to a minimum of 30 Mbps by the end of 2020 and (iii) a minimum of 50 % of all residential and business premises in Wales will have access to 100 Mbps by 2020."
As part of this, in March 2011 an Open Market Review was undertaken to "understand where private sector investment in next generation networks across Wales has already happened or is planned in the next three years. The information will help Welsh Ministers determine where the deployment of next generation broadband networks should be focussed." Also in March 2011 the Welsh Government published the Digital Wales: Delivery Plan, which sets out the detail of how the vision for Wales set out in the previous strategy document will be achieved. This included specific targets for increasing digital participation (for example, to reduce digital exclusion amongst people aged 50 and older from 49% (515,000) in 2010 to 45% (473,000) by 2012 and to 40% (421,000) by 2015) and reiterated the commitment to the EU's 2020 targets for broadband.

In June 2011 the Information and Communication Technology (ICT) Strategy for the Public Sector in Wales was published, again highlighting the success and continued importance of the PSBA project. An update on the procurement that began in February 2011 came in December 2011, with the announcement that the competitive dialogue process had commenced. This was followed in January 2012 with the announcement of the second phase of the market review that began in March 2011, with further comments invited in relation to the proposed intervention areas, as mapped here. Also in January 2012 both ISP Review and ThinkBroadband reported that BT were now the only remaining major bidder in the procurement process for NGA in Wales following Fujitsu's withdrawal from the process, echoing a previous similar development in Scotland in relation to the Highlands and Islands project. Ironically the annual report of the Digital Advisory Board, also published in January 2012, highlighted the importance of encouraging a consortium approach versus a single supplier.

In February 2012 an extension to the Broadband Support Scheme designed to tackle and eradicate broadband notspots in Wales was announced. In May 2012 the Wales Infrastructure Investment Plan (WIIP) was published (press release here), which included the following in relation to broadband, as one of seven high level investment priorities:
"Improving telecommunications networks and assuring all parts of Wales have access to adequate broadband facilities for their economic needs – the Next Generation Broadband Programme investment in communications infrastructure will stimulate a thriving and competitive digital economy. It will support growth through wide scale application, innovation, commercialisation and exploitation of digital technologies by Welsh businesses, and particularly the ICT and Creative Industries sectors."
The plan also set out the total amount of investment expected:
"The total value of the Next Generation Broadband investment is anticipated to be up to £400m, combining funding of around £57m from UK Government and £70m from European sources with Welsh Government funding in order to leverage significant investment from the private sector. This investment in communications infrastructure will stimulate a thriving and competitive digital economy. It will support growth through wide-scale application, innovation, commercialisation and exploitation of digital technologies by Welsh businesses, and particularly the ICT and Creative Industries sectors."
Commentary from ISP Review suggests that a contract between the Welsh Government and BT is "now certain to be signed this summer 2012."

Thursday, June 07, 2012

Telefónica and Vodafone: UK infrastructure sharing agreement


An interesting announcement from Telefónica UK and Vodafone UK today: the two companies intend to enter into a network sharing agreement to improve existing coverage and to speed up the roll-out of superfast 4G services (coverage from the BBC here with comment from technology correspondent Rory Cellan-Jones here).

From Vodafone's press release:
"The plan will deliver real benefits for today’s mobile phone users by creating two competing networks that will be able to offer indoor 2G and 3G coverage targeting 98% of the UK population by 2015, delivering mobile coverage and mobile internet services to the vast majority of UK households. It will also ensure that the capability for the next generation of 4G mobile services is rolled out as widely and rapidly as possible, helping to close the digital divide between rural and urban areas. The partnership will lay the foundations for two competing 4G networks to deliver a nationwide 4G service faster than could be achieved independently and up to two years before the anticipated regulatory requirement of 98% population coverage by 2017."
A footnote acknowledges that this is subject to the outcome of Ofcom’s forthcoming auction of the wireless spectrum required for 4G services. According to Ronan Dunne, CEO of Telefónica UK, "this partnership is about working smarter as an industry, so that we can focus on what really matters to our customers  – delivering a superfast network up to two years faster than Ofcom envisages and to as many people as possible." Similarly, Guy Laurence, CEO of Vodafone UK commented that the partnership "will create two stronger players who will compete with each other and with other operators to bring the benefits of mobile internet services to consumers and businesses across the country."

Operationally, the partnership will work as follows (again from Vodafone's press release):
"Telefónica UK and Vodafone UK propose jointly to operate and manage a single network grid in the UK that will run two competing nationwide mobile internet and voice networks. Both companies will retain complete control over their wireless spectrum, intelligent core networks and customer data. They will continue to actively compete with each other in all products and services, enabled through the ‘intelligent’ parts of their networks. A new 50/50 joint venture company will be created through the consolidation of both Telefónica UK and Vodafone UK’s existing basic network infrastructure, including towers and masts, which will be transferred to the joint venture or decommissioned over time. Under the proposals, both companies will have access to a single grid of 18,500 masts representing an increase in sites of more than 40% for each operator. The joint venture will also be responsible for the building of new sites needed to extend coverage into rural and remote areas."
Discussions are currently underway with Ofcom; the companies hope to establish their joint venture and network sharing arrangement  later this year. Telefónica's press release is here with additional comment here.  ISP Review offer this analysis:
"...the move could make Ofcom’s life a little more complicated as it would have to reconsider its assessment of the market and any knock-on impact for the forthcoming (Q4-2012) auction of 4G spectrum (800MHz and 2.6GHz). Both Vodafone and O2 UK are unhappy that Three UK could be gifted a slice of 800MHz spectrum and that Everything Everywhere (Orange UK and T-Mobile) could launch 4G in 2012 if allowed to repurpose the 1800MHz band."
I wonder if today's announcement indicates that Everything Everywhere's request to deploy 4G services this year in advance of the forthcoming spectrum auction (see here and also here) will be approved, with Telefónica  and Vodafone joining forces to compete as a consequence? Ofcom are due to make a statement on Everything Everywhere's request shortly.