Author - bsg

20 Jun 2008

The debate in Australia

Our recent report on the value of next generation broadband created a minor debate on itWire in Australia following a good blog article from Stuart Corner. The article captures the essence of our message on next generation broadband deployment from our recent research: it is more important to do this right than to do it now.

The size of the investment required to roll out next generation broadband in any country, the irreversibility of that investment, and the likely importance to that country’s economy and society of superfast broadband mean that the costs of getting it wrong could be significant, and that investment should occur at the most optimal time possible in order to maximise the benefits.

For the UK, our report suggests, the most optimal time is not necessarily now. There are a number of uncertainities for investors that create a large value in waiting, such as a lack of evidence of consumer willingness to pay and the current regulatory uncertainty. Over time, this value will reduce as evidence emerges and some of the uncertainties are resolved – we believe over the next 18 months or so.

Ultimately, we still believe the market is best placed to decide when and how investment in next generation broadband should be made. But this doesn’t mean we should be complacent. It is important that the work that is being done continues, including Ofcom’s work to provide regulatory certainty, the Caio review, and the work of the BSG, so that in 18 months’ time we really do have a clearer picture.

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17 Jun 2008

BSG launches new research

We’ve been absent from the blog for a few weeks as we’ve been finalising two new pieces of research that we believe moves the debate around next generation broadband in the UK forward, and putting on our 2008 Conference ‘Beyond Pipe Dreams?’. It’s been a busy time, but now that’s past we have a lot of issues to discuss.

First of all, the conference itself produced a lively and informed debate, with representatives from a wide variety of sectors and a range of speakers including Francesco Caio, head of the governemnt’s review of broadband.

The first of the two reports that we launched at the conference was ‘A Framework for Evaluating the Value of Next Generation Broadband’. This report examines the incremental economic and social value of next generation broadband over current broadband provision in the UK.

The second report was ‘Models for efficient and effective public sector intervention in next generation broadband access networks’. This report studies next generation broadband interventions across the world, and first generation interventions in the UK, to determine good practice for interventions in the UK.

These reports contain a lot of issues, which we will discuss in more detail in future blogs. For now, I can strongly recommend both reports if you are interested in the future of broadband in the UK.

A Framework for Evaluating the Value of Next Generation Broadband

Models for efficient and effective public-sector interventions in next-generation broadband access networks

by Peter Shearman, Policy Manager, BSG

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10 Jun 2008

BSG Conference: Beyond Pipe Dreams? Prospects for Next Generation Broadband in the UK

On 09 June 2008 the BSG held its 2008 Conference ‘Beyond Pipe Dreams? Prospects for Next Generation Broadband in the UK’.

The conference brought together over 250 delegates from a variety of stakeholders, including representatives from ISPs, content providers, rights holders, consultants, analysts, investors, the regulator, public sector bodies, and the voluntary sector, as well as the Caio review team.

The event produced many lively debates, building on the launch at the conference of two new pieces of research by the BSG:

The presentations from the event can be found below.

BSG Chairman Kip Meek chairs a panel at the BSG Conference

Session 1: How valuable might next generation broadband be for the UK?

Session 2: The investment case for next generation networks

Session 3: Regulating for next generation access

Session 4: What role for the public sector?

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09 Jun 2008

Will next generation broadband deliver next generation benefits?

New report examines economic and social value of next generation broadband and concludes there’s more value in doing it right than doing it now.

The UK could reap significant social and economic value from the wide-spread deployment of next generation broadband, according to a new report that studies how to weigh up the costs and benefits, from the Broadband Stakeholder Group (BSG), the government’s leading advisory group on broadband and digital convergence.

By looking at the potential private value (value accruing to commercial investors and consumers) and the wider economic and social value, the BSG has found that the long-term benefits to the UK associated with the wide-scale deployment could outweigh the cost of deployment, which could be as much as £16bn (to reach 80 per cent of UK homes).

However, the report does not conclude that operators should invest now. There is still real uncertainty about the extent to which investors will be able to realise enough of this value to justify investment. The BSG believes that in the short-term, there are unlikely to be significant costs associated with delaying deployment and there may actually be considerable value in waiting for a limited period in order for more information to emerge, before investing.

But the value in waiting will diminish over time and the report recommends that commercial providers, government and regulators continue to work to create an environment that is conducive to timely and efficient investment.

Antony Walker, CEO of the Broadband Stakeholder Group explains: “Next generation broadband has the potential to transform the way we do things as individuals, businesses and as a nation as a whole. It is tempting to jump in feet-first but it matters more to do this right than to do it now. There is a lot of uncertainty about issues on both the demand and supply side and much that we can learn from experience elsewhere without adverse affects in the short-term. On the other hand, the UK can’t wait too long. If widespread network deployment didn’t happen in the medium term (perhaps three to five years), then this report suggests that the UK could be losing out.

The report also warns that it will take longer to deploy next generation broadband than it took to deploy the current generation and that some areas might be beyond the reach of market forces. Communities and individuals that remain beyond the reach of commercial deployment in the long-term will be disadvantaged. Close attention must therefore be paid to the emergence of a new digital divide.

The report follows the BSG’s Pipe Dreams report published in April last year which said the UK needs to start preparing for next generation broadband by 2009. The current report, along with another on models for public sector intervention in the deployment of next generation broadband, will be launched at the BSG’s conference: Beyond Pipe Dreams in London on Monday 9 June.

CORRECTION – 23 June 2008

Please note that the version of the report launched at the conference contained an incorrection calculation of the value of spectrum efficiency. This has been recalculated as £5bn, rather than the £9bn stated in the launch version. The tables and charts refering to this figure have been altered, and the corrected report is now available on the website.

BSG report – A Framework for Evaluating the Value of Next Generation Broadband

Press release in full

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05 Jun 2008

BSG identifies models for public sector intervention in next generation broadband

The Broadband Stakeholder Group (BSG) – the government’s advisory group on broadband – will today publish a report identifying potential models for efficient and effective public sector intervention in the deployment and take-up of next generation broadband in the UK. It makes several recommendations for public sector bodies that might be considering such projects.

Next generation broadband has the potential to deliver significant social and economic value in the long-term. However it will be costly to deploy and will only become available progressively, leading to an uneven distribution of broadband capability across the country. If predictions about the benefits associated with these new services prove correct, then this could have a differential impact on consumers, dependant on where they lived. If this became a critical concern for policy makers, public sector interventions could be required in the future to support deployment to areas that would otherwise remain unserved.

The BSG does not advocate wide-scale public intervention in next generation broadband at this stage. However, a number of pilot projects have been proposed in the UK and these could provide valuable insight into different models of intervention. These pilot projects should however conform with the report’s suggestions on best practice.

Antony Walker, CEO of the Broadband Stakeholder Group explains, “Next generation broadband could be of real value to families, communities and businesses across the UK. Even though we are at the beginning of this transition, we need to be vigilant about the risk of new persistent digital divides opening up. That’s why this report is important. By testing out models of intervention now, the UK will be better prepared to intervene efficiently and effectively if it needs to in the future.???

Having examined various projects across Europe the BSG report identifies six critical success factors, which if met, should help to ensure that interventions prove efficient and effective. The report also makes several recommendations including a call for greater co-ordination at national level between public and private sector organisations involved in broadband projects.

Walker continues, “There remains a lot of uncertainty about next generation broadband and there is much that we can learn through well designed pilot projects. However, we’d like to see better sharing of experience at a national level – from planning to evaluation – and more cooperation on common ways of doing things, like technical standards and the development of wholesale products. We don’t want to see a patchwork of disjointed networks emerging that lack the scale to succeed.???

The BSG believes it is appropriate to encourage next generation broadband deployment in areas of new build, regeneration and redevelopment, but argues that pilots must have a clear rationale and must attract multiple service providers in order to offer choice to consumers.

The report begins with a practical definition of efficient and effective public sector intervention. It then examines various public sector interventions in next generation broadband across Europe. Based on this analysis the report categorises the main reasons for intervention and different approaches to it. It finds several common issues in the projects it examined from which the critical success factors and recommendations made in the report are based.

The BSG, with the support of the South East England Regional Development Agency (SEEDA), commissioned Analysys Mason to write the report in early spring this year. It will be launched alongside a report on the social and economic value of next generation broadband at the BSG’s conference, ‘Beyond Pipe Dreams’ in London today.

BSG report – Models for efficient and effective public-sector interventions in next-generation broadband access networks

BSG identifies models for public sector intervention – full press release

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06 May 2008

Manchester to go down the NGA route

Digital Region is not alone. Manchester City Council recently agreed to pursue a strategy of intervention to bring next generation broadband (in the form of a fibre to the home network) to Manchester, as part of a wider digital strategy for the city-region.

The plan will see the Oxford Road area used as a test-bed, covering 400 residential properties and 50 businesses, before a phased rollout elsewhere in the area, and was agreed by the Council’s Executive in March (you can read the report here). It aims to see ‘significant progress on implementation’ of the initial rollout phase during 2008/09.

On the heels on Digital Region, and with other authorities in the UK examining investment in NGA, Manchester is seeking to be a UK exemplar, providing knowledge and learned experience for other authorities in the UK. It is the lead authority in the DC10plus group on its ‘next generation connectivity’ workstream, and it hopes that its experiences will assist other UK authorities.

It is not just local authorities that can learn from Manchester and others, however, but broadband providers too. In the UK it is often cited that there is a lack of evidence of willingness to pay amongst consumers, and little or no evidence of applications and services that require the bandwidth provided by superfast broadband. Evidence will begin to emerge, however, from projects such as this.

Digital Region, the Ebbsfleet development, Manchester and others that are considering next generation broadband will provide valuable evidence for both public and private organisations, increasing the understanding of the market and allowing better-informed investment decisions.

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17 Apr 2008

Ofcom to survey duct infrastructure use for delivery of next generation broadband

In a speech to the IET yesterday, Ofcom CEO Ed Richards announced that Ofcom would undertake a sample survey of underground ducting infrastructure to understand its potential use for the rollout of next generation broadband in the UK.

Speaking at the reception, Mr Richards said,

“Super-fast broadband – next generation access and networks – are crucial to the UK’s future. These networks form part of the critical infrastructure of the country’s economy and will be central to the way we live our lives in the future.

I believe that super-fast next generation broadband will come to change our perception of communications radically; alongside mobile broadband, it will in time have a similar impact upon our society and economy as we have seen with first generation broadband. So we must prepare now.

Given the remarkable results from recent French surveys, we need to establish what the position is here and whether or not duct access has a role to play in the development of competitive next-generation access. So, in cooperation with operators we intend to undertake a sample survey of the existing duct network.

We are well aware that there are significant issues related to this in the broader telecoms market and that careful consideration will need to be given to these, alongside the results of the survey.

And, working with the Caio Review, we will also be asking whether there is scope to secure commercially viable access for fibre deployment through the primary infrastructure networks of other utilities such as water and energy. We must be sure we are not missing a big trick here. We know that a lot of the costs are in the civil engineering and this is civil engineering of a very similar kind.???

Full speech transcript – Ofcom CEO Ed Richards

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01 Apr 2008

The Byron Review: What now for regulation of Web 2.0?

“If our children were leaving the house, or going to a swimming pool or going to play in the street, we would take all the care possible about their safety – is there proper policing, is there proper safety? When a child goes on to the computer and on to the internet or on to a video game we should be thinking in the same way.”

This was the response from the Prime Minister to the review published last week by psychologist Tanya Byron, setting out recommendations to ensure that children and young people are protected from inappropriate and harmful material on the internet and in video games.

The publication of this landmark review reflects a growing policy emphasis on how web 2.0 should be effectively regulated.

Whilst no one would disagree with the importance of ensuring child protection on the web and on video games, there is a vocal concern from industry that regulation should not inhibit innovation. The new media industry is one of the UK’s most vibrant and is constantly developing new services – the principal users of which are, in many cases, children and young people.

Byron’s report is a considered and ambitious response to this important issue. Whilst many of last week’s headlines focused on her recommendation to extend the range of age classification for video games, a closer read of the 200+ page report (for those of you with the stamina) also reveals an important proposal on how regulation of web 2.0 should be driven forward.

Her solution to this quandary is the establishment of a UK Council on Child Internet Safety to develop a child internet safety strategy, that will cover both illegal and legal (though potentially harmful or inappropriate) activity.

Built on the structure of the existing Home Secretary’s Task Force on Child Protection on the Internet, the Council will be co-chaired by the Home Office and the Department for Children, Schools and Families, involve other relevant government departments and be staffed by a cross-departmental secretariat. It will report directly to the Prime Minister.

The Council will also be supported by an expert advisory group and research sub-group and involve industry through working groups to deliver specific initiatives such as codes of practice.

Byron also strongly recommends that mechanisms should be established by the Council to effectively involve parents, children and young people.

At first glance, this seems like an eminently sensible solution. It draws the relevant stakeholders together and an over-arching strategy would arguably reduce confusion about the array of policy developments individual departments are currently pursuing in this area.

However, it is an ambitious task, and Byron’s recommended deadline of Spring 2009 for both the establishment of the Council and publication of the strategy is a challenging timescale.

It remains unclear at present who will drive forward the development of the strategy, and what regulatory issues it will cover. Elsewhere in her report, Byron throws down a gauntlet to industry to develop codes of practice on areas such as user generated content, improving access to parental control software and safe search features, and better regulation of online advertising.

This builds on the vast array of work the industry has already taken to set common standards on issues that are important to their consumer. One example of which is the Good Practice Principles on Audiovisual Content, which were facilitated by the Broadband Stakeholder group (www.audiovisualcontent.org).

However, looking forward, could further regulatory proposals emerge under the strategy as a whole? Would this regulation be developed under a self or co regulatory model? And who will police and enforce these standards?

It has to be recognised that Byron has done an admiral job in pulling a wide array of issues together in her review. When it comes down to a more detailed look at how child internet safety will be regulated, however, there is still a very long road to travel.

By Pamela Learmonth, Policy Manager, BSG

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25 Mar 2008

PlusNet highlight ISP costs

While discussing something broadband related (strange how I keep talking about broadband with people), I was pointed in the direction of the PlusNet blog, which I hadn’t come across before.

This particular entry discussed the costs incurred by ISPs, depending on their choice of wholesale product, peering arrangements with other providers, costs incurred using transit providers and other factors.

I found this whole blog particularly fascinating, as it is not usual to find an ISP that is this open about their business (a number of their other entries are well worth a read, particularly this one on the impact of the iPlayer on their streaming traffic).

What the entry does highlight very well is the unsustainable nature of all-you-can-eat broadband price plans. Increasing traffic is increasing costs, and ISPs will need to raise revenues to cover these. It is likely that this will push ISPs towards bitcaps, and this could become an area of competition.

However broadband pricing develops, what is important is that the price of a service, and what that service provides, is clear and transparent for consumers. The Ofcom Consumer Panel and Ofcom are already looking at current marketing of broadband speeds. If competition moves away from speed to factors like bitcaps, it will still be important for consumers that the industry continues to work towards greater clarity, accuracy and transparency in its marketing.

Peter Shearman, Policy Manager, BSG

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19 Mar 2008

NGA – would you pay?

In a previous post I explored what the topics of discussion would be at the government’s Convergence Think Tank, and suggested that next generation access (NGA) would probably be a key secondary issue to public service broadcasting (PSB).

At the seminar yesterday, NGA was indeed discussed. It was interesting to see, particularly for someone fairly new to the debate, the level of interest and desire for NGA among the broadcasting world.

This isn’t surprising, of course, as it opens up a lot of avenues for them, but I was struck by one presenter’s firm conclusion that the PSB debate was the wrong focus for the future of the industry, and that superfast broadband was the most important next step. His view wasn’t necessarily shared by all in the room, but he wasn’t the only presenter to mention the importance of NGA.

Broadcasters aren’t the only industry who see benefit in NGA, and are clamouring for greater bandwidth. A key issue, though, is how will it be paid for. There is demand from industries and consumers, but is there a willingness to pay? This is a big question, and currently there is little hard evidence for investors to go on that suggest a return for their money would be likely.

The BSG’s ongoing research into the economic and social value of NGA has drawn on emerging evidence from the US, where Verizon have subscribers paying a premium for faster access over fibre. But until more is known about consumer willingness to pay, the business case for NGA will be difficult to make.

Peter Shearman, Policy Manager, BSG

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19 Mar 2008

Is there $250bn in new 'Two-Sided' Telecoms Business Models?

STL, with their Telco 2.0 project, have recently published a report on Future Broadband Business Models titled ‘Beyond Bundling: Growth Strategies for Fixed and Mobile Broadband‘.

The report provides significant food for thought for everyone in the broadband value chain. Fundamentally, the report suggests that Telcos need to adopt two-sided business models that make more use of assets they have which they currently don’t exploit. STL estimate that there could be as much as $250bn in these new business models.

STL are providing the opportunity for the industry to discuss these ideas, and others, at their next Telco 2.0 Executive Brainstorm. The 4th in the series, the event aims to draw together everyone in the value chain, from telcos and content providers to regulators and investors, to discuss the future of the industry and the shape of the market to come.

The BSG are supporting the event. For further information regarding the Telco 2.0 4th Executive Brainstorm, please visit the Telco 2.0 website.

STL Telco 2.0 report overview

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10 Mar 2008

The importance of speed?

Many of you will have noticed the adverts currently being run by a particular ISP, which focus on the superior speed of its fibre-based network.

This campaign taps in to the importance consumers appear to place on speed – as is demonstrated by a recent BBC Online readers’ debate about Next Generation Access.

However, while headline speeds are obviously important to consumers, particularly when they are not receiving what they feel they are paying for, download speed is not the only important characteristic of a broadband service. There are other characteristics of an NGA network that will provide value to users.

For example, although demand for faster downstream speed is uncertain, there is more certainty about the need for greater upstream speed given the increase in user-generated content. ADSL and ADSL2+ technologies, however, allow a median upstream speed of less than 1mbps. Users would almost certainly benefit from a greater upstream speed.

NGA is about more than just increased headline download speeds.

NGA is commonly now being defined by a set of attributes relating to, for example, improved quality of service, consistency of bandwidth across users and time, less interference, lower latency, and greater symmetry between upstream and downstream speeds. These characteristics, and others, would improve the Internet experience and provide value to users.

Faster downstream speeds are certainly not the only benefits from moving to an NGA network. It is important that the benefits of the other, less-discussed characteristics are captured in the debate, as these will make an important contribution to the enhanced user experience that NGA networks will provide.

Peter Shearman, Policy Manager, BSG

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04 Mar 2008

Government publishes guidance on 'Data Ducting Infrastructure for New Homes'

The Department for Communities and Local Government has released guidance on ‘Data Ducting Infrastructure for New Homes’.

The note provides guidance to housing developers who intend or who wish to consider the laying of ducting on development sites, and within dwellings, for the delivery of data services.

The practical guidance in this document aims 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
  • reduce the risk of ‘non-standard infrastructures’ (for example using ad hoc ducting types and topologies) leading to future incompatibility issues within different developments.

The guidance is not technology or service specific, neither is it intended to promote any particular cabling type, wireless solution and network technology or data service. Rather it aims to be generic to enable developers to make their own informed choice of the infrastructure model that is best suited to their development.’

DCLG guidance on ‘Data Ducting Infrastructure for New Homes’

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03 Mar 2008

Review gives NGA momentum

The government recently announced an independent review of next generation broadband, to be led by former Cable and Wireless CEO Francesco Caio.

The BSG welcomes the review. The terms of the review build on a number of the issues we highlighted in the Pipe Dreams report, and will complement ongoing work by the BSG.

We have long called for government to review such issues as the non-domestic rating of fibre, and are pleased that this and other issues are now being seriously examined.

While the review will not by itself bring about NGA in the UK, what the announcement has done is give momentum to the issue.

From the BSG’s perspective, what is important is that this momentum is made use of fully to create the right conditions for timely and efficient market investment in NGA.

Peter Shearman, Policy Manager, BSG

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