News, Telecommunications - Written by Renai LeMay on Tuesday, August 21, 2012 10:47 - 27 Comments
UK pledges “fastest” broadband in Europe
news One of the key politicians responsible for delivering telecommunications policy in the UK delivered a major speech overnight pledging to deliver UK residents the “fastest” broadband of any major European country by 2015, through a range of initiatives combining fibre to the home, fibre to the node and wireless technologies.
In a speech on Monday given to telecommunications experts at the country’s so-called Silicon Roundabout high-tech district in London, the country’s Secretary of State for Culture, Olympics, Media and Sport Jeremy Hunt said the impact of the Internet on modern economies was “now well-documented by a number of studies”, accounting for a major proportion of growth in gross domestic product.
“Getting the plumbing right for our digital economy is not just an advantage to consumers – it is also essential for our digital and creative industries, all of whom need reliable high speed networks to develop and export their products as they move large digital files around the world,” Hunt said. “Get this wrong and we will compromise all of their futures. Get it right and we can be Europe’s technology hub, bringing together the best of Hollywood and Silicon Valley in one country with huge competitive advantage in both content and technology.”
To support the UK’s digital ambitions, Hunt said, in his very first speech as Secretary in May 2010, he had said that he wanted the UK to have the “best” superfast broadband network in Europe by 2015. However, the politician added, it had become clear over the past several years that to be “the best”, you need to be the “fastest”.
“So I am today announcing an ambition to be not just the best, but specifically the fastest broadband of any major European country by 2015,” he said.
“My nightmare is that when it comes to broadband we could make the same mistake as we made with high speed rail. When our high speed rail network opens from London to Birmingham in 2026 it will be 45 years after the French opened theirs, and 62 years after the Japanese opened theirs. Just think how much our economy has been held back by lower productivity for over half a century. We must not make the same short-sighted mistake.”
Currently, the UK is taking a number of initiatives to upgrade its national telecommunications networks. Firstly, and primarily, incumbent telco BT is upgrading its copper network using the so-called ‘fibe to the node’ or ‘fibre to the cabinet’ technology which the Coalition is proposing to deploy in Australia through Telstra’s existing copper network. This deployment will provide speeds of up to 80Mbps to two-thirds of UK premises by the end of 2014.
The UK model is also progressing via a subsidy approach which is seeing the Government fund specific areas of infrastructure rollout in coalition with the private sector. And there are other initiatives under way Fujitsu, for example, is also planning to deploy fibre to around five million rural premises in Britain, in collaboration with several partners such as Virgin and Cisco Systems. The country is also proceeding with wireless spectrum auctions which are slated to unlock 4G mobile broadband speeds in the UK as Telstra and Optus are rolling out in Australia.
However, Hunt said the Government’s ambitions were not limited to the current tranche of broadband technologies. “We simply will not have a competitive broadband network unless we recognise the massive growth in demand for higher and higher speeds,” he said. Consequently, Hunt said he viewed fibre to the node/cabinet as only a short to medium term solution, referring to an earlier report by the UK’s House of Lords into the matter.
“Whilst I am talking about the House of Lords report, let me address a further misunderstanding,” he said. “They suggest that fibre to the cabinet is the sum of the government’s ambitions. They are wrong. Where fibre to the cabinet is the chosen solution it is most likely to be a temporary stepping stone to fibre to the home – indeed by 2016 fibre to the home will be available on demand to over two thirds of the population.”
“But where their Lordships are wrong is to say my focus is on any particular speed: today’s superfast is tomorrow’s superslow. Just as the last government was wrong to hang its hat on 2 Mbps speeds, we must never fall into the trap of saying any speed is “enough.””
Consequently, Hunt said he had introduced a program for “ultrafast” broadband in cities which would offer speeds of 80-100Mbps “and more”. “And we will continue to develop policy to ensure that the highest speeds technology can deliver are available to the largest number of people here in the UK,” he said.
Despite the similarities in rhetoric around broadband speeds between politicians in the UK and in Australia, Hunt stopped short of backing direct government investment in national fibre broadband infrastructure to the home, as the Federal Labor Government is currently doing with the National Broadband Network project.
“The reason we are backing fibre to the cabinet as a potential medium-term solution is simple: the increase in speeds that it allows – 80 Mbps certainly but in certain cases up to 1 gigabit – will comfortably create Europe’s biggest and most profitable high speed broadband market,” he said. “And in doing so we will create the conditions whereby if fibre to the home is still the best way to get the very highest speeds, private sector companies will invest to provide it.”
“Let’s look at the alternative: if the state were to build a fibre to the home network now, it would potentially cost more than £25 bn. It would also take the best part of a decade to achieve. We will get there far more cheaply – and far more quickly – by harnessing the entrepreneurialism of private sector broadband providers than by destroying their businesses from a mistaken belief that the state can do better.”
Hunt’s comments come as this morning Shadow Communications Minister Malcolm Turnbull was quoted in the Financial Review newspaper as saying the Coalition’s rival NBN policy would follow the lead of BT in the UK.
Hunt’s comments remind me very strongly of the approach taken by the Howard Government to telecommunications policy in the years before Labor swept to power with Kevin Rudd. At that stage, Communications Minister Helen Coonan had a strong focus on supporting the commercial telecommunications sector to boost broadband speeds in Australia, through subsidies in rural areas and using the regulatory process to get Telstra to further open up its copper network for wholesale access (which BT has done in the UK with pretty strong separation).
That approach was short-circuited by the suggestion in late 2005 by then-Telstra chief executive Sol Trujillo that the Government directly subsidise Telstra to upgrade its existing copper network to utilise the fibre to the node technology which the Coalition is proposing today — creating a “national broadband network”. Then-Shadow Communications Minister Stephen Conroy took that ball and ran with it all the way to the election, gradually creating the concept we know today as the NBN.
Coonan’s approach had a lot of positives. For starters, it is an undeniable fact that broadband competition was resulting in better outcomes for consumers throughout the early years of the 2000’s — primarily through the installation of competitive ADSL2+ infrastructure in telecommunications exchanges. And the rural subsidies did indeed result in thousands of Australians getting affordable access to satellite broadband speeds. The OPEL project — consisting of rural wireless and ADSL infrastructure — still lives on in a similar form as the wireless component of Labor’s NBN vision.
However, I don’t think Coonan quite understood the frustration which the general electorate had with the speed of change in broadband. At that stage there were quite a lot of broadband blackspots out there, and many Australians couldn’t get affordable broadband of any stripe. The NBN project tapped into the popular demand for positive change at that stage.
The UK Government is currently taking a much more conservative approach to its national telecommunications policy than the Australian Government. It’s doing this because it can afford to. In the UK, BT was separated back in 2006, with its network assets being managed now by a separate division dubbed Openreach. In part because of this separation — agreed upon by the Government — the company was able to confidently go ahead with its national FTTN upgrade, as it had regulatory certainty from the Government as to how its infrastructure would be treated in future.
If BT hadn’t been separated and Openreach created, I suspect BT would not be upgrading its network to FTTN right now, and the UK Government would be facing the same sorts of issues which the Labor Federal Government (and possibly the Coalition, after the next election) face in Australia — principally, the separation of Telstra, which the NBN is a vehicle for.
In short, Hunt can afford to make grandstanding claims about the UK getting the “fastest” broadband in Europe. Because most of that work was done before he and the current Conservative/Liberal democrat coalition ever came to power. That’s a luxury which Australia’s politicians do not currently enjoy, when it comes to telecommunications policy. In Australia, we’re still trying to structurally separate our incumbent, former monopolist telco, from its network infrastructure. That’s a task they managed in Britain most of a decade ago.
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