Thursday, January 31, 2013

UK Broadband Policy Update January 2013


A summary of recent broadband policy developments.

Super-Connected Cities: On 5th December 2012, as part of the Chancellor’s Autumn Statement, the twelve cities that will receive funding under the secondwave of the Super-Connected Cities initiative were announced: Brighton and Hove, Cambridge, Coventry, Derby, Oxford, Portsmouth, Salford, and York in England; Aberdeen and Perth in Scotland; Newport in Wales; and Derry/Londonderry in Northern Ireland.  The total sum allocated to the 12 cities is £50 million, the individual allocation to each city is yet to be announced (DCMS press release here).  The Autumn Statement was accompanied by the publication of an updated National Infrastructure Plan, reporting on progress towards the Government’s targets for a range of infrastructure developments including broadband.

Super-connected city developments are also continuing in the USA: the Federal Communications Commission (FCC) has announced its Gigabit City Challenge, calling for at one gigabit community in every state by 2015 (more from FCC Chairman Julius Genachowski here).  An article on ArsTechnica reports that Google’s fibre initiative in Kansas City is “not a hobby”, speculating where Google might choose to expand the roll-out of its gigabit fibre programme.

State Aid - UK decision and new European Guidelines published: In January 2013, the European Commission published the text of its state aid decision on BDUK’s umbrella notification scheme, following the announcement that the scheme had been approved in November 2012.  This provides an insight into the criteria adopted by BDUK to determine if basic and superfast broadband services are affordable: “Access to basic broadband infrastructure is not affordable if the installation cost is £100+ and/or the rental price is £25+…BDUK is working at present on the basis that access to NGA broadband infrastructure is not affordable if the installation cost is £200+ and/or the rental price is £30-£50+.”  Commentary from ISP Review here and ThinkBroadband here.

The state aid decision also gives further information on the eligibility of wireless for state aid in broadband deployments: “Such alternative technology could also be eligible for state aid provided that i) the average speeds are at least doubled compared to the existing speeds; ii) it is able to provide reliably at least 30 Mbps speeds in the target areas and iii) there is a commitment to upgrade to fibre components when economically viable…the Commission is of the opinion that recent technological and market developments made it possible for certain FWA networks to provide NGA capabilities in low density, rural areas and they can be competing alternatives to FTTC networks.  Therefore FWA networks meeting the requirements of paragraph (42) and (74) of the decision can be qualified as NGA for the purposes of establishing the “colour” of the target area under the Broadband Guidelines and eligible for state aid under the scheme.”

In December the European Commission adopted revised guidelines on the use of state aid in relation to broadband networks, following the previous consultation process. More on this here; the list of Commission decisions on state aid to broadband has also been updated.

WCIT-12 outcomes: In December, at the World Conference on International Telecommunications 2012 (WCIT-12), the UK and USA were amongst several countries that refused to sign the International Telecommunication Union’s (ITU) proposals to revise Internet governance (ISP Review commentary here).  In the run up to the conference many organisations had expressed their objections to the ITU’s proposals, including Google (commentary from the BBC here) , the European Parliament and the Information Technology & Innovation Foundation (ITIF).  There was also some dispute between the Body of European Regulators for Electronic Communications (BEREC) and the European Telecommunications Network Operators’ Association (ETNO) over the ITU’s proposals, and the Organisation for Economic Co-operation & Development (OECD) previously published a report describing how current arrangements continue to function very effectively, negating the need for change.  Wired provided a useful background to WCIT-12 and the final acts of the conference are available here.  BBC News reported the opening of the conference,  the intensification of divisions, the decision to redraft the controversial proposals and the eventual refusal of the USA, Canada, Australia and the UK to sign them.

Ofcom developments: The UK’s 4G auction process finally began in January 2013, following Ofcom’s announcement of the bidders on 20th December 2012: Everything Everywhere Limited (UK), HKT (UK) Company Limited (a subsidiary of PCCW Limited), Hutchison 3G UK Limited, MLL Telecom Ltd, Niche Spectrum Ventures Limited (a subsidiary of BT Group plc), Telef√≥nica UK Limited and Vodafone Limited.  4G services in addition to those already offered by Everything Everywhere following its 4G launch on 30th October 2012 (more here) are expected to be up and running by late spring 2013.  A Financial Times article (“Superfast Internet benefit put at £20bn”) reports that Ofcom economists “had calculated a £20bn consumer benefit during the next 10 years from the provision of 4G services.  The regulator has used a ‘consumer surplus’ figure – a measure of the benefit that people gain from consuming goods and services – which is often adopted when analysing the impact of government intervention in markets.”

Other recent Ofcom developments include new consultations on white space technology (press release here and more on white spaces here), for which the University of Strathclyde has been established as the UK’s centre of expertise according to ISP Review, and measuring mobile voice and data quality of experience.

Wales & Scotland: In January 2013, the Welsh Government announced the commencement of work to deploy high speed fibre broadband across Wales and also the investment of £39 million in broadband for schools (commentary from ISP Review here).  In November 2012, DCMS published its response to the Broadband Services in Wales report, prepared by the House of Commons Welsh Affairs Committee.  The report raised a number of concerns about current broadband policy; however, the response did not propose any changes, as recorded in ISP Review’s commentary, echoing the response provided in relation to the previous House of Lords report on broadband.  In Scotland, ISP Review reported that the £1 million European Rural Broadband Challenge Fund (RBCF) and Outer Hebrides LEADER programme have successfully helped to fund and develop a new fibre optic network, which has been used to bring superfast broadband to five of the six houses in the tiny Highlands and Islands village of Dalmore.  An earlier ISP Review article explored the impact independence could have on broadband performance, availability and price in Scotland.  More on recent developments in Scotland and Wales here.

The Superfast & The Furious: In January 2013 think tank the Policy Exchange published The Superfast and the Furious: priorities for the future of UK broadband policy (press release here). This argued that current has policy prioritised speed over coverage when the case for using taxpayers’ money to subsidise very fast connectivity remains (in the report’s view) weak.  Instead, the report suggested the Government should focus on helping the 10.8 million people not online - half of whom are over 65 - and do more to help small businesses make the most of the opportunities presented by the Internet.  Commentary from ISP Review here and ThinkBroadband here.

DCMS & Broadband Stakeholder Group (BSG) developments: On 23rd January 2013 Ed Vaizey MP, Minister for Culture, Communications and Creative Industries delivered a speech to the Oxford Media Convention, heralding the forthcoming Communications White Paper (more here) and reporting on progress.  This was followed the next day by a press release outlining the “Fast Start” initiative, to streamline the roll-out of superfast broadband once contracts for delivery are in place.   The scheme will be trialled in Norfolk following their contract award to BT in December 2012. Other recent BT wins include South Gloucestershire & Wiltshire, Devon & Somerset, Suffolk, Herefordshire & Gloucestershire and Cumbria .

Finally the Broadband Stakeholder Group (BSG) launched its 2013 work programme in January (press release here): “In 2013 the BSG will lead…on better  understanding the links between  the provision of broadband infrastructure, the uses this infrastructure supports and the benefits that ensue."  This will build on the findings of the previous 2012 BSG report, Demand for Superfast Broadband.