My review of Building a Full-Fibre Future

Today Ofcom hosted a forum for industry leaders to address the future of ultrafast, fibre broadband in the UK.

Matt Hancock told us what the Government hoped to achieve from the event

As part of our goal of building a #fullfibrefuture, we want the telecoms market to be both competitive and collegiate. Our review into the future of telecoms investment here https://t.co/Wx0YAxtCEw pic.twitter.com/IaB1ZPZxe1

— Matt Hancock (@MattHancock) April 26, 2018

The FttH Council Europe didn't answer the exam question but shared some data from a study they conducted 

Why do consumers choose fibre? In our study we found 3 main reasons: 1/higher speeds 2/access to a much wider variety of services 3/better value for money says @efitori #fullfibrefuture with @DCMS & @Ofcom pic.twitter.com/9wv6NeKiZf

— FTTH Council Europe (@FTTHCouncilEU) April 26, 2018

A man from Virgin Media turned up and said something interesting and not related to being bought by Vodafone

More action required from Ofcom & Govt: greater consistency of local authority behaviour; scalable duct&pole access model; urgent need for wayleave reform says Rob Evans, MD Lightning @virginmedia #FullFibreFuture pic.twitter.com/Un9oAJCkyc

— Erzsebet Fitori (@efitori) April 26, 2018

 

The price of setting Britain on the right path has gone up a lot since Steven Carter's Digital Britain Report got kicked into the longer grass

Yes, rolling-out fibre is a significant investment but we think this is an achievable investment. Taking into account the cost-saving opportunities, we estimate the cost of rolling fibre to €137B says @efitori #fullfibrefuture pic.twitter.com/3QXdQEtoq4

— FTTH Council Europe (@FTTHCouncilEU) April 26, 2018

 

Ofcom close with the Chief Executive saying that things need to change but it is the market rather than stakeholders that need to deliver

Closing comments from Sharon White, Ofcom's Chief Executive, at #fullfibrefuture. pic.twitter.com/m4dAcx1qKF

— Ofcom (@Ofcom) April 26, 2018

 

This man has a plan, but it needs your money, lots of your money. But he is wise and knows how to spend it on good things...

🗣️ Our CEO Gavin Patterson at #fullfibrefuture

“We need a world-leading network combining fibre, WiFi and 5G. But this
is a very significant investment, and it needs to be made ahead of demand.” pic.twitter.com/954BcfCFMB

— BT Group (@BTGroup) April 26, 2018

 

Lots of talking, so top quality graphics but no firm plan on how to move forward as it's complex stuff! 

What is full-fibre broadband? What benefits could it bring to people in the UK? Find out here: https://t.co/FMefqkuoKF #fullfibrefuture pic.twitter.com/Ti1zMNHzux

— Ofcom (@Ofcom) April 26, 2018

 

Virgin Media investment plans

Over the weekend Virgin Media revealed it's latest investment plans to The Telegraph. It is seeking to expand it's network asking Liberty Global to increase it's investment to grow the footprint of it's Fibre network a £3bn plan to grow from 50% of households covered to almost 66%.   

Given that interest rates are at all time lows and Virgin have said that the investment has a good return in growing the customers base in areas where they are new entrants rather than established provider why are they not seeking to be aggressive and double the investment? The reports on broadband coverage in Britain say that the costs are not commercial for just the last 10% of households and so the capacity is there to almost double what Virgin already has. 

We could say that Liberty Global is being cautious given the uncertainty around Brexit and its economic impact or as a Global player the upside of investment outside of the UK is greater than inside.  One option would be for Virgin to become more of a player within the Business market which its brand does not speak to other than in the small business sector, some players are realising that BT is providing a very poor quality service.   

Is Virgin gaming the market to such an extent that it knows that investment is infrastructure is like betting on England's football team? It needs to stay in the game and the cost of new customers is lower in areas that it is an entrant to rather than established in that they are likely to buy a bundled service bigger than that established customers.

BT has got NO friends!

Over the last few weeks it seems that the current Ofcom review of BT is unlikely to follow the pattern of "business as usual" when it comes to outcomes.  These could mean that the chickens finally come home to roost at BT.

Over the course of a week BBC Radio4 featured the failures of Broadband Britain to live up to promises on the Today programme.  It was not until 4 negative features that BT CEO Gavin Patterson finally agreed to an interview and that was not face to face rather it was prerecorded and broadcast on a Saturday morning.  You have to ask just what the PR team were doing, was it a failure or arrogance?

This weekend Chris Bryant wrote to The Telegraph calling for the break-up of BT because it had failed to provide the Broadband needed of UK PLC despite £1.8bn of grants to do so.  This is a shadow minister prepared to outline Labour Party policy in the middle of a Leadership election!

These events on there own might lead you to think that BT will be alright, it might find itself facing tighter regulation but it's unlikely that a break-up will be forced on it.  However take a look at the fact that industry rivals that are also calling for a split are also donors to the Conservative Party and you might start to thing that BT could be facing years of legal challenges and disruption.  Given that Ian Livingston's time in Government was shorter than a contract for one of BT's services you have to ask what friends they have?

Is it possible to fix BT?

Ofcom has started another review into how BT effects the UK telecoms market, so 10 years after the first review. At the same time the CMA are looking at it's plans to buy EE.

This regulatory overview gives a chance to review how BT operates in the UK and what could be done to improve things.  Since the Privatisation of British Telecom the market has failed to offer an effective competitor rather it has seen a race to the bottom.  

Consumers in the UK have been very poorly served when it comes to keep up with Continental rivals when it comes to Infrastructure.  Whilst the cable industry did attempt to build out an alternative network it failed to do so with a sustainable business model and so we are faced with the situation that more households are not pasted by Virgin Media than are. The provider of the last resort is thus BT and as such is highly regulated with an obligation to wholesale network access to rivals.

Thirty years ago Britain got its first mobile networks, one of those had access to enough rooftops to build infrastructure needed up until 2000 thanks to it's only property portfolio and captive business accounts.  The other was Vodafone, a small start up based at the end of the Thames Valley with a sleepy parent focused on the defence industry.  Yet because BT focused on doing things that impeded its rival rather than do what was needed they failed so sceptically that they were forced to divest the Mobile business.

When it comes to the Broadband business it has repeated the same mistakes, rather than invest in the Network so that it was the best possible it has played games with rivals seeking to do just enough to avoid sanction.  We thus find ourselves in the UK operating behind the curve when it comes to digital services because of slow speeds and over capacity.

The last review took Ofcom two years to complete and saw the creation of Openreach as an effective remedy. Hindsight has proved that the actions have not worked and BT rivals are now asking for the business to be spun off from it's parent in an effort to improve capital investment. Such a option will not solve the investment lag rather it will make it worse.

I saw recent analysis of the performance of BT shares over the last fifteen years which highlight that the Management had managed to offer a negative return of some 20+% one of the worse performance with the FTSE 100. Thus shareholder seem just as ineffectual as regulators to force the Executives to run the business.    

An act of stupidity by a desperate Prime Minister

I picked up my morning paper and almost tore it in two reading the latest stupid PR stunt from David Cameron. When Ed Miliband made his Conference Speech this September we were told that price controls could not work and were wrong. Yet with his back to the wall Dave has decided that all utility companies need to be told that his government will not accept price rises in the run up to the 2015 election.

This is an act akin to King Canute except the Prime Minister does not understand that he cannot turn back the tide of price increases.

An analysis of the players in the market will show that many are subsidiaries of  overseas businesses rather than British and thus have little loyalty to local politicians. They are in the majority investing in significant infrastructure programs that mean that rather than pay taxes they have losses to cover.

What the Prime Minister should be doing via the offices of the Department of Culture Media and Sport and Ofcom is making sure that telecoms networks are able to deploy high speed broadband to the majority of the population in the majority of places. It is with such a network that the economy will grow and income rise at such a level that people do not feel price rises.

A bad day for Britain's Mobile Ecosystem

Today at the Science Museum Everything Everywhere entertained the dumb and witless of the British Press to its "plans" for the launch of LTE services in the UK.  Next month they will give the opportunity to a few to have a service that is so far away from 4G standards that it's laughable. EE are offering the consumer the chance to experience a Mobile Broadband experience of up to 8Mbps which is slower than some with HSDP+ devices on Vodafone are capable of getting.

This launch has every opportunity of being an even bigger disappointment that 3G was in 2003 when coverage was very poor and devices were not best suited for the improvements offered by the new technology.  The real benefit of 4G is not in services to "smartphones" rather it will be improved connectivity for laptops and tablets or it will be delivering highspeed broadband to rural areas. Everything Everywhere has no intention of offering such services any time soon.  Perhaps that is because at present it has problems giving 3G services to these markets.

The UK Government has so far managed to fudge and fiddle the sale of 4G spectrum and hopes that in allowing Everything Everywhere rights to run a second rate service they can force Stakeholders to participate in a flawed sales rather than seek judicial review and see yet more delays.  I would rather have a delayed launch of 4G that gives Britain a significant uplift that enables it to compete with rivals that a glitzy marketing launch of an inferior service that history will see as willy waving - all be it with a shinny new iPhone.

Network Coverage Issues....

A few weeks ago Ofcom published maps for all five UK Operators coverage of the UK with a 3G Signal. At the time I thought that the maps were interesting but suspected that they were overstating the situation.

With the change of handset and the fact that this Summer England are playing an interesting cricket competition I have been more concerned that usual about coverage.

I have chosen to trial the Sky Sports service on my Orange Handset. In order to be able to watch mobile TV I have to be able to get a 3G signal. If all I relied on was Orange I'd have thought that England played well in Leeds last week as all that I saw was the first three overs on Friday and 15 minutes of Broad and Swan hitting the ball to all corners. The other attempts to watch whilst I was out and about were all failures because I didn't have coverage. The issue was that I was not at home where I know Orange has coverage issues but rather I was in Central London, Oxford and around the M1. The other issue is that Ofcom says that Orange has the widest coverage.

With my T-Mobile handset I find that the traffic management is an issue in the daytime the push email on my handset does not function and email is downloaded in blocks however between 20:00 and 07:00 it does work. So just what is happening to the T-Mobile Network if it is drifting in and out?

I have "free" mobile broadband from BT which uses the Vodafone network and I have to say that on my commute into London they seem to be the only people capable of providing coverage along the Metline all the way out to Hertfordshire. The dongle also seems to function well in places where I cannot find wifi. In terms of mobile broadband Vodafone is not only faster than 3 but also has a greater footprint.

Why is this an issue?

Well in an effort to get UK working better we want to use Mobile to provide coverage to those that chose to live in a rural setting that is not covered by ADSL or Fiber-optic networks in order to give speeds of 2 Meg/Second. If those inside Government are to believe the regulator or networks that they offer British Telecom a get out clause we are in for a shock.

I don't blame the Networks completely for the failure of their coverage. Some of the blame has to be accepted by NIMBY local Governments who refuse planning for new base stations. My Lib Dem controlled council as a matter of course refuse all applications and so appeals are need to grant them. The fact that we have an over supply which has seen prices collapse makes it difficult to justify the return on investment needed to cover all of the UK. However the auctions required commitment to cover the UK with a suitable service. Today that service can be seen as a hybrid network that offers a basic connection and at times a high speed one. The regulator needs to raise the speed of the basic connection.

Without a suitable network how can a provider expect me to pay for a service. Given what I have experienced over the first week of testing mobile TV I don not expect to keep it after the free period is over. In order to attempt to use my handset as a mini-computer I have to use the wifi radio. In doing so I consume power too fast for my phone to operate all day. If I am using wifi I am not mobile but rather wireless and so might as well use my iPod Touch if all I need is small screen access or my Laptop if I want a bigger view.

Thoughts on BT

So Yesterday we had the presentation of the BT results for the last year and the headline analysis can be read on the FT, BBC, Independent and Times amongst other sources.

What gets me is that Ian Livingstone has used accounting tricks to hide what the future looks like. Lookig at BT Retail the core revenue streams are ALL declining and yet the Division managed to increase its profit. Going forward if my own experience is common they will lose even more money, the retention costs for me staying on the BT network are more than the money I am paying them the poor user experience means that I have stopped using BT Vision on demand services.

The Cost Cutting plan is a recruitment freeze rather than intelligent restructuring of the Workforce. This is because of the fact that we are looking at the heavy unionisation of the Openreach division which could become a car crash similar to Global Services (Talk Talk and Tiscali merging will lower the number of truck roles for LLU). If the cost base in GS is wrong why has so little been written down on the Balance Sheet and why are we not seeing large scale redundancies in India of BT staff?

However the big issue I have with Livingstone is the lack of a Vision when it comes to the future. In the middle of the Digital Britain review would his predecessor have stayed quite or used the annual results as an opportunity to talk up high speed broadband? With BT needing to become a software company if the investment in 21CN is to be profitable what progress is being made and how will BT be at the centre of new services?

Could the emphasis on fixing the pension fund be because Livingstone and his Board what a nest to rival that of the former RBS Executives under Fred Godwin?

Digital Britain Report

When it was finally published my review of the Digital Britain report was I hope that they did not pay Lord Carter for this.

After two days when my fellow teleworks have overloaded my Internet connection I have to say that Carter has wasted an opportunity.  Because of the lack of investment in the Thatcher years we in Britain find ourselves in a void.  If we had invested rather than Privatised our utilities then we might not be looking at an infrastructure that is failing.

With the Mobile Networks it is not a question of funding capital projects on the whole but rather the need for planning permission.  Given rights to build a base station anywhere that they can rent or buy a site then the Networks will build the coverage that the customers will pay for.  The release of sites could speed the consolidation of Networks in the UK; it has to be obvious that we cannot support FIVE networks.  

At the time of the Internet Bubble I looked at the way that Railroads and Airlines had developed over the previous 100 years.  All those that built the Railroads ended up in failure and those that started Air Travel also ended in financial ruin PanAm was the last to fail.  However we still used trains and planes.

Looking at the demands of UK plc what we see is a need for better infrastructure.  The launch of Cable television shows that we cannot offer regional monopolies rather we need a single wholesale provider. However the lack of a government CTO who understands the engineering requirements of Broadband Britain we do not have a Blind Watchmaker capable of architecting an effective solution.

At this moment we have an opportunity not presented since the end of the World War in 1950's Britain.  If we are to limit the market correction then we need to invest in infrastructure that allows the UK economy be remain the the G8.  The roll out of fiber to finally provide high speed broadband connectivity will give the UK employment in the Civil Engineering sector at a time when the only thing we seem to be building is Sports facilities for the 2012 Games.  We will also provide employment opportunities to raise the level of Engineering Skills in the work force.  Before Thatcher we had pride in Engineers but the transfer to a service economy means that it is no longer so.  With better Engineering in the communications field we could raise the standard in the UK that makes people employment opportunities not currently provided following the downsizing of BT and the fall of Marconi. 

Looking at the people in the street I have to ask that does the man in the street want Broadband?  Whist some could afford a high speed computer that could benefit from 100 Megabits per second connectivity those who limit their experience to light social networking, messaging and catch up TV could function with a connection that is a little better than the current situation.

It is not the consumer that needs better Broadband rather it is business and government that does as without it the UK will demonstrate that we continue to fall back.  With better connectivity we can lift educational standards not just those that are currently in school but also within the workforce.

The last two days has seen an increase in Mobile traffic as well internet traffic but the benefits in terms of revenue has only highlighted the need for investment.  Looking at the response to the report I am surprised that not many are disappointed that Carter has been conservative in his recommendations.

(c) Picture from my Bedroom window yesterday morning.