Digital Britain – where are we today?

We have a number of initiatives that seek to target areas of market failure in next generation broadband. While some limited funding is available through, for example, BDUK and various European funds, it is too soon to tell whether this funding is sufficient to address the challenge of ensuring that next generation broadband gets rolled out across the country. Whatever investment takes place the policy test should realistically be: is public sector investment future proofed. On these terms the measure of success will be that as demand increases (and history suggests that we should expect this to be the case) provision should be upscalable relatively cheaply. In these difficult times the tax payer expects nothing less.

The provision and use of next generation broadband infrastructure will be critical to improving the productivity of business and ensuring the future competitiveness of the UK economy. If we are serious about creating the conditions for a Knowledge Economy I would argue that the first step is for Government and Industry to agree on a detailed timetable to phase-out copper, following the example of the Digital TV Switchover plan. It goes without saying that this will be both difficult and expensive but it is incumbent on the Government to create the right investment climate, to send the right signals – sticks and carrots – around which all interested parties can plan to deliver, in a predictable timescale, next generation infrastructure for all.

 

Is it a speed issue?
A Digital Economy is not defined by speed. Asking how much speed you need is the wrong question because it simply leads to a legitimate argument with the telecom industry who rightly demand to know what is it you are going to do? What applications will you use? The answer is I do not know.

If you ask me what the policy question is I would say: “how do we future proof our broadband investments?” but this is more to do with ensuring the public sector secures value for money. But if you believe, as I do, that a Digital Britain is the  foundation block of a Knowledge Economy. Then in this new, rapidly converging digital economy, where we compete on a global stage, and where the future wealth and prosperity of the UK will be driven by the ingenuity of our citizens and the agility and entrepreneurial flair of our businesses (public and private).  In a Knowledge Economy prosperity is built on people’s tacit knowledge, it trades on the exchange of ideas, and its lifeblood is a modern 21st Century telecoms infrastructure. Without it we cannot possibly build a knowledge economy.

The telecoms industry business model for broadband investment has always left rural economies lagging – and without intervention these areas of market failure will undoubtedly persist. That same logic which rightly drives commercially minded telecom businesses to prioritise investment in urban areas will mean that rural locations will likely never see widespread fibre deployment - because its just too expensive to dig. Now today, this might not be felt to be a problem as we see the impact of planned investment and we begin to feel the impact of BDUK funding helping rural communities. But the fact is that taking fibre all the way to the end user is both the most expensive solution but also the only one that future proofs investment. But realistically we should not expect to see many, if any, fibre end to end solutions coming from the BDUK funding. Why? Because in the process of building your business case you will be required to make assumptions around demand and attempt to characterise the nature of the demand, and that will inexorably draw you into doing some kind of a cost/speed calculation. The problem here is that we find it difficult to understand, let alone predict, future demand. But if you cannot articulate what you might do with 100Mb symmetrical or a Gig then you will have trouble answering the question.  The situation at the moment is that we defer the cost/speed debate to the telecoms industry who tell us what they think is ‘realistic’ in the time-frames within which they operate.

I am concerned that what might be good for the telecom industry in the short term might not be good for the long term strategic interests for UK plc. Now, March 2011, we can probably say with some confidence that most rural communities will never get fibre end to end and we can also probably say with same level of confidence that we will see further welcome investment in our urban areas. Now this urban investment will be much appreciated but long after BDUK funding has run out can we be sure that we have not inadvertently sown the seeds for a two-tier knowledge economy where rural communities are perpetually left behind.

Timing is everything in this business and I cannot help but note that the telecom industry is also not good at getting predictions about future demand right. In his evidence to the Department of Culture, Media and Sport the then Chairman of BT was asked when broadband would get to rural areas, in his response he suggested that:

 

This is a commercial market with quite a lot of players and it obeys normal economic drivers…[there]…are large pieces of geography, sparsely inhabited, where broadband roll out will not be achievable in economic terms at least within 10 and possibly 20 years.

(source DCMS Select Committee, http://www.parliament.the-stationery-office.co.uk/pa/cm200102/cmselect/c...)

 

[Christopher Bland, BT, 2002]

 

And yet, to their credit, less than five years later BT were reporting that first generation broadband was available everywhere.

This government, like the last, have taken the view that the market knows best. And indeed, nothwithstanding interventions by RDAs, local authorities, community activists and many others over the last decade it has been private money that delivered a Digital Britain. Accordingly some would argue that a market-led approach has served the UK well. This might well be true for First Generation Broadband. However, I would argue that delivering a fibre network fit for a 21st Century Knowledge Economy is a fundamentally different proposition to spending a couple of billion piggy-backing a technology over an existing 20th Century copper telephone network. In October 2010, the Coalition published its National Infrastructure Plan 2010 in which they suggest that we need to plan to invest some £200bn in critical infrastructure. With so many competing demands over infrastructure I remain to be convinced that a “leaving it to the market” approach will serve the strategic long-term interests of the UK.

Challenges for the final third
While it is positive that the current coalition government is putting funding towards the final third, the challenge is that we’re leaving the delivery of an appropriate solution around next generation broadband to the market. It is essential that we have competition in the final third locations across rural areas, which are currently dominated by incumbents. How do we stimulate competition in these areas? What are the safeguards that are put in place to ensure competition is taking place?

We are living in a connected world right now
We are connected at home and at work and increasingly on the move. As citizens, we shop online buying books and holidays, we bank, we pay our rates, we study our ancestry, we renew our passports and we buy our car tax. The public sector offers us telemedicine, mobile phone parking tickets and the Oyster card. As businesses we complete electronic tax returns, we trade online, we operate across continents, across time zones and along complex supply chains. We do all this and many more things beside in our digital world. We can confidently say we are already living in a Digital Britain.

Are we on the right track?
No, we are on the slow track, not the right track. A more strategic approach than a "patchwork quilt" is needed. Digital Britain is already here; we need a manifesto for fibre, not a series of pilots. If we focused on , we shall create the conditions to build the new telecoms infrastructure that we need to underpin the economy

There’s more work to be done
The unprecedented cuts to public sector budgets are changing the climate for digital transformation in a way that probably nobody expected. The public sector is being forced to adopt the ‘more for less’ agenda. The public sector has been through a decade of eExperimentation trying to exploit digital opportunities – and there are many good examples that illustrate the entrepreneurial flair of some local authorities. However, it is interesting to observe that amidst all this innovation it is notable that the good work typically sits in silos, a project here, a project there. I can think of no one local authority that has embraced the e-agenda holistically and systematically exploited technology whilst re-engineering services to suit the demands of the 21st Century citizen. Our citizens have smartphones, PCs and have embraced connectivity into every aspect of their lives but many local authority services remain modelled around 20th Century service practices. I am not sure how long they will survive.

The digital community is a mixed bag but we share in common the idea that technology is changing the way we work, live and enjoy our leisure time. Perhaps the biggest lesson from the roll-out of first generation broadband was the need to get people involved, to stimulate demand, and to help create the climate which would nourish a Digital Britain. The lifeblood of a Digital Economy is a flourishing digital community. We have great community assets spread across the length and breadth of the UK and these could and should be the vanguard of the next digital revolution and champions of Next Generation Broadband. Many of these communities have an only too real understanding of what it means to have poor connectivity but their problem is knowing what to do about it. The Local Broadband Plans being developed by local authorities as part of a submission to BDUK will probably help many of these rural communities. But for others initiatives like INCA’s proposed Knowledge Base could provide a platform, which offers essential information and guidance to aid next generation broadband project development.

 

Author’s disclaimer
The above are the personal thoughts of the author and do not represent the formal view of emda

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