Following the broadband money

Jeremy Hunt’s broadband legacy

with 21 comments

Freshly triumphant from a successful Olympics (with more to come from the Paralympics) culture secretary Jeremy Hunt has been outlining his ambition to have not only the “best broadband in Europe” but also the fastest.

In a speech this week week he said, “We simply will not have a competitive broadband network unless we recognise the massive growth in demand for higher and higher speeds.”

He added government is considering how to allocate the £300m from the BBC licence fee earmarked for broadband investment. “In particular we will look at whether we can tap into to this to allow those able to access superfast broadband to be even greater than our current 90% aspiration,” he said.

Is that good news for rural communities? Not necessarily.

Hunt quoted Ofcom’s recent finding that average UK broadband download speeds had hit 9.1Mbps. However, the small print in the Ofcom release said the SamKnows study “includes only ADSL customers within 5km of the exchange and in geographic Markets 2 and 3 and in the Kingston-upon-Hull area”.

So the 9.1Mbps does not include Market 1, roughly two-thirds of geographic UK where BT is the sole supplier. Had it done so, the average download speed would be more modest.

Hunt is clearly hoping that the mobile network operators will fill in the gaps. The government has allowed Vodafone to pick up Cable&Wireless Worldwide’s national fibre network, essential for backhaul. Ofcom’s decision to allow mobile operator Everything Everywhere (EE, aka T-Mobile UK and Orange UK) to refarm its 1800Mhz spectrum for LTE will help extend high speed access. This assumes EE and Three, which is buying the chunk of spectrum EE is forced to sell to comply with its merger conditions, can lay their hands on affordable consumer connection devices. Barring legal challenges, this may come ahead of the auction of 800MHz and 2.6GHz bands sometime net year, which stipulates in-house coverage of 98% of UK homes.

Once that is done, the mobile operators can apply for £100m to reach into rural areas, and compete with fixed operators for a further £150m to upgrade broadband speeds in selected cities.

With Hunt confident that DG Competition will clear the way to release £530m in state aid for county broadband projects, it is hard not feel buoyed by the prospect of so much money pumped into networks.

However, there is a danger that the impending investment will deepen the existing digital divide between town and country communities.

Hunt will do well to make sure that every penny of the £530m is spent outside the suburbs, so too the £100m for mobile coverage, and the BBC’s £300m. If he could find a way for communities like B4RN to invest their own money with confidence, he could unlock more millions, and ensure Britain gets the broadband network it needs. That would be a legacy no-one could take away from him.


Written by Br0kenTeleph0n3

2012/08/23 at 20:47

21 Responses

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  1. Market 1 may be a geographic two thirds of the UK, but only refers to around 10% of actual population. So even if tested would only add about 100 testers following the usual SamKnows pattern, and these would be spread over short/medium/long lines, and since even on market 1 you can get 6Meg on a 3km long line, The average would not skew down that much at all.

    Now consider this:
    Lots of market1 actually have TalkTalk ADSL2+ service already, 93% population coverage. Just that Ofcom does not change its market definitions more than once a decade.

    Andrew Ferguson

    2012/08/23 at 22:00

    • Yes Andrew, that’s the trouble with averages, especially ones as iffy as those Ofcom is using. I would like to see some statistical rigour here that reflects users’ actual experience. What are the average up and download speeds for Market 1, Market 2, Market 3, for starters? What about average upload speeds anyway? That would give a better indication of users’ total quality of experience, and possibly point to the effect of competition on speeds. But what you imply is that people who live in the countryside are marginal folk who don’t count, at least when it comes to broadband. I think that’s an untenable position. All this would not matter as much, but government is bent on forcing farmers and small businesses to do more online to save the government money. So, even though Market 1 houses 10% of the people, BT has a captive market. That is, unless BT makes them so unhappy that they go to satellite operators or the few remaining fixed wireless operators like Kijoma.

      Ian Grant

      2012/08/23 at 23:03

      • The full report mentions upload speeds and all exchange results.


        2012/08/24 at 08:52

      • Given that they have the information, why don’t they publish it in the main release? Extraordinary.

        Ian Grant

        2012/08/24 at 13:49

  2. UK Broadband speeds are indeed rising fast but so too are those across the rest of the EU. The question is whether ours are increasing sufficiently faster than theirs to deliver “best” broadband by 2015. In this context the question is what, if anything, will BDUK have delivered by 2015 that could not be delivered faster by giving the agreed funding to local authorities, allowing them to pool it with funds from other sources (e.g. their various service delvery budgets) and using whatever co-operative procurement mechanisms (PSN Frameworks, JANET, NENs, REIPs etc.) gives best value. My understanding is that the supply chain delays are that the BDUK agreed suppliers cannot deliver anything new inside about 9 months from contract. Given that BDUK appears unlikley to get state aid clearance without making changes to its framework and given that those change are likely to enable excluded suppliers to make legal challenges if they are not added back in … It is getting unlikely that anything new can be operational.

    That raises an intersting question as to whether the delay was deliberate (i.e. when was Treasury actuially expecting to spend the £500 million) or whether the Chancellor wishes to see approved spend brought forward DCMS Government delivered before that start of 2014 clearance brought forward as part of the need to stimulate economic recovery.

    Philip Virgo

    2012/08/24 at 07:34

    • Thank you as always, Philip. Your first bit is depressing, the second shocking!.Some people accuse me of being a conspiracy theorist, but I doff my cap and bow to your greater experience and insights into the Westminster mindset 😉

      Ian Grant

      2012/08/24 at 13:48

  3. Here in Weardale we seem to have been forgotten. I am lucky to get 0.45, and often as low as 0.25 (There have been times I have had even lower speed than this!). We see/hear a lot about super fast broadband (Infinity and the like) on our TV screens, but they can’t even provide decent normal broadband here, quoting line length and other factors. There should be an incentive to upgrade slower areas first, rather than making fast areas faster… after all, we still seem to get charged the same for less service! It wouldn’t be so bad it we had good coverage from the mobile 3G networks, but we don’t…

    Clive Elsdon

    2012/08/24 at 09:08

  4. I find this new focus on speed interesting. By proclaiming: ““We simply will not have a competitive broadband network unless we recognise the massive growth in demand for higher and higher speeds”, Jeremy Hunt has clearly decided to go head-to-head with the Lords’ report (that access is more important than speed).

    It was only last April that a report on an Ed Richards’s speech commented: “What’s more, the regulator has been fretting about take-up of the fibre-optic technology among households. According to Richards, the case for such a premium upgrade isn’t compelling enough outside of the idea that younger people are scrabbling for more bandwidth to stalk friends on social networks.”
    And around the same time frame: “Eighty Mbps is more than people need,” says BT’s strategy head, Sean Williams. “We are not of the school that universal fibre to the premises is the solution.”

    So has there been a sea-change in demand in the last 4 months? If so, why? Or is the SoS preparing us for a shift in BDUK’s approach to network competition?

    David Harrington

    2012/08/24 at 09:09

    • I think it might be to do with the limitations of LTE. Until quite recently people had faith that LTE offered enough capacity to avoid congestion, but the chunks of spectrum on sale suggest that the channels will become congested quite quickly thanks to streamed video.
      As to BDUK’s approach to competition, I can’t discern one, unless it’s “confused.” It’s unfair to expect tenured civil servants to understand market competition, unless it’s between Oxbridge colleges, where fitting in is what counts.

      Ian Grant

      2012/08/24 at 19:41

  5. A report which gives another perspective is Akamai’s State of the Internet (search with Google and you will find it). Akamai is one of the worlds largest data distribution companies helping companies like Apple, Microsoft, IBM and many others to act global when it comes to delivering downloadable content. They do not really bother with connection technology or where in the country the connection is made but rather with speeds.

    At first it looks good for most EU countries including UK. But I would suggest all to consider number of unique IP addresses per capita, i e how many in each country even bothers to use internet enough to be present in Akamai’s vast network. The figure number of IPs thru population puts Sweden at about .69. Here UK comes in at about .35 and Germany slightly higher at .43. One way to comprehend this may be that quality of connection is so low that a larger part of the population in UK and Germany does not even bother to use the source which Internet is.

    Another thought that comes to mind when reading the post above is a bit of astonishment. You have high expectations of what can be achieved thru 3G/4G mobile connections! I think even far to high. Once UK has all those base stations out there and everyone has a connection the risk is quite high that real world speeds will be far below expectations. Not to mentions that expectation will have moved on to higher speeds beyond what the technology can sustain.

    Facts in the matter will only be in our hands once the base stations are in place. Something that may take some time – probably years. What’s important to think about now is if the money spent on mobile connectivity actually will place UK on top of the world or only leave the citizens feeling lost in slow connections and even worse symmetry.

    So far the comparison is made within EU. Akamai includes the world and thus also Singapore, Japan and South Korea. At that perspective most parts of EU seems lost far behind. Then one should also keep in mind that in some of these Asian countries they have this connectivity since some years already. EU in general and UK in particular is still struggling to get the train moving.

    One should note that South Koreas quota of IPs thru populations is .39. It’s then also important to keep in mind that the connectivity market works very different there. The networks are more monopolized. Also, the number of IP addresses registered with Akamai are even decreasing in some of the asian countries. The world is running out of IP addresses since IPv6 has not been implemented and operators in these countries are changing their network accordingly in order to connect more devices and computers. But we haven’t reached that stage in EU.

    Not so far at least.

    Tobias Ahl

    2012/08/24 at 12:19

    • Many thanks Tobias. The number of active IP addresses in the UK is somewhat misleading. ISPs cluster tens or even hundreds of users behind a single IP address. The practical effect of this came to light recently when ISPs were required to block alleged online pirates. It emerged that blocking an alleged pirate’s IP address also inadvertently took everyone else at that address off-line too, despite their complete innocence of any alleged wrongdoing.
      I admit I’m not up to speed on this, but is the re-use of IP addresses, and the seeming reluctance to move faster towards IPv6 something to do with a lack of systems that allow provisioning on the epic scale offered by the new addressing scheme?

      Ian Grant

      2012/08/24 at 19:53

      • Agreed Ian – counting IP addresses does not give all the colors of the situation. And you are right – with IPv6 not rolling out the way to go is to use NAT technology, i e cluster many users behind a single IP public(!) address. However having had the opportunity to meet with more people in UK over the past year than ever before one conclusion aligns with comparing IP addresses per capita though. It goes something like this: If users have more (as in coverage) and better quality (as in speed, open-nes, symmetry and stability) broadband it will actually be used a lot more. I compare with my 12 years of discussing the same things in Sweden with what I discuss with people in UK today.

        The most astonishing discussion is that someone (as it seems mostly BT) actually claims to know (no one has been able to tell how they know though) that British citizens and companies does not NEED more than a certain quality of broadband. At the same time we see in Sweden (and in other countries) that if it’s available it’s used. For good things? The hated peer-to-peer traffic (music and video download/pirating) is not the dominating growth driver today. Instead it’s (all be it over the top) services such as video on demand (BBC has great such services!), Spotify-like music services or very legal updates of software not to mention sharing between friends and family of video and other media. Smartphones lead by the iPhone stresses mobile operators and it’s never (or rarely) pirating putting the pressure up. It’s other things.

        Question to ask yourself: Does this growth of traffic correspond to something good and even something to embrace? May access to good quality broadband spur growth and innovation in UK? May even save money and environment ones broadband is a true alternative to other alternative – such as driving around to meet each other?

        It’s important that LTE/4G is not in my mind competition to fibre. Instead LTE/4G is a good potential customer to anyone who owns a fibre network. And for a user the two networks (as FTTH for a private home network and LTE/4G when on the move) is complementary services. Both is much needed. However, if you plan a network aiming at LTE/4G (most base stations will probably have a fixed fibre based backhaul) it will not suffice for FTTH. If you turn this around and plan for FTTH with a slight over capacity, you will actually also make sure there is backhaul for all the base stations needed. The business models works together in the last case. In the first case it does not.

        Regarding the lack of IP addresses and IPv6 deployment I would probably entitle that pure lack of incentive in several dimensions. Not my focus so I will stay short of analyzing details.

        Tobias Ahl

        2012/08/27 at 15:23

      • Thanks Tobias. We look at the Scandinavian countries’ approach to broadband with a degree of envy. From here it seems that the secret was to let local communities develop their own solutions in the sense that anyone could play – energy companies, cable companies, even telcos – and to take almost a hyperlocal, village by village approach, as soon as enough villagers expressed desire. Our top down approach to rural broadband is stalled, but we are hopeful that things will happen after autumn.

        Ian Grant

        2012/08/27 at 15:49

      • And how many fixed broadband providers actually hide thousands of providers behind a single IP? Any data on this?

        Yes this is the case for mobile networks, but not for fixed.

        Andrew Ferguson

        2012/08/27 at 17:18

      • Hi Andrew – I have only the anecdotal evidence of several ISPs, who tell me independently it’s common practice by fixed and mobile guys. I must admit it’s never been high enough in my priority list to follow up. Perhaps someone out there has the numbers. Anyone?

        Ian Grant

        2012/08/27 at 17:28

      • Basically the lack of enough IPv4 addresses forces any operator (mobile or fixed) to apply NAT to conserve public address space. As such I think all of them do. However should end user ask for a public address most also can provide it. This would probably be applied mostly in fixed environment since few shares or offers services from mobile devices where a public IP is required. I will try to see if there is more hard evidence here. However – I would argue that if we compare this behavior thru out Europe, it would prove to be roughly the same. And for example the number of hidden users per public Ip address may be the same. Thus comparing Sweden to UK to Netherlands to Germany may give some insights.

        Tobias Ahl

        2012/08/27 at 20:14

      • So my current IP address may also be allocated to another user of the same ISP at the same time?


        2012/08/27 at 21:24

      • Which means you might get a dunning note from the inheritors of the ACS-Law mantle once the next bit of the Digital Economy Act comes into force, and they go after the pirate who shares your address. Oh frabjous day! Time now to retrain as a communications lawyer, I think 😉

        Ian Grant

        2012/08/27 at 21:38

      • So how does DDNS work if 2 users have the same address? eg for remote CCTV access.


        2012/08/27 at 21:55

      • Actually my investigation into NAT prcedures reveals that operators do it since they do not have IP addresses enough. However, it is not wihtout complications. For example the case where a computer or gateway in one users home may change IP makes some protocols to fail. Should the gateway stay alive and connected to DHCP all the time, this should not be a common problem. DDNS is connected to DHCP and if it works this should come along fine. But that is up to the staff with the operator.

        Most significant with not having a public address is that one can’t set up servers and route DNS to your own server. Mail, FTP or your own home page for example.

        Tobias Ahl

        2012/08/28 at 09:12

  6. £300M is a drop in the ocean compared to what is required – take the case of my County which estimates rural SFBB will cost up to £100M, for which Mr. Hunt is generously donating £6.7M to “encourage” suppliers; the county is kicking in £20M leaving suppliers to cough up another £73.3M to invest in areas they already consider uneconomic – you do the maths…

    Mel Bryan

    2012/08/25 at 12:51

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