Westminster eForum “Building 21st Century Broadband” – Robert Sullivan, Broadband Delivery UK

The opening talk at yesterday’s Westminster eForum meeting was given by Robert Sullivan, the relatively new head of Broadband Delivery UK, itself the quite new organisation charged by Government to facilitate the roll-out of superfast broadband in the UK.

He first addressed the objective as set out by Jeremy Hunt, Secretary of State for Culture, Media and Sport: “within this parliament we want Britain to have the best superfast broadband network in Europe.” This clearly begs the question what one means by “best” - Sullivan said BDUK was working on a definition and thought it would not be a single measure, such as headline speed. Instead it would be some sort of “scorecard” based on “outcomes”. They wanted a dialogue with stakeholders about this. If one were being sceptical one might think the target would be set in a way which pre-figured success.

Sullivan discussed the “Theoretical Exercises” that had examined the economics of providing superfast broadband in three challenging real-world areas – a paper is being written on this and will be out “soon”. But some particular points had already emerged:
• Delivering the USC is not a separate issue
• The cost of backhaul is a major factor in the economics
• Getting revenue to cover opex is difficult enough even if capex is 100% funded
• A mix of technology solutions is likely

The key obviously is getting a viable business case. Sullivan covered the three primary ways of doing this:

Reduce costs: duct and pole sharing as in Ofcom’s Wholesale Line Access review – BT reference offer due by January 2011; reuse of other utility infrastructure – electricity poles seems the most promising; reuse of public sector networks
Increase demand: through community engagement; demand registration (eg BT “Race to Infinity”); and increasing online activity by demonstrating benefits (Race Online 2010)
Public funding: £530m was secured through the Comprehensive Spending Review (ie taken from BBC); ERDF funding is available; other public sector bodies (eg councils, Devolved Administrations) might wish to contribute; and a variety of business models could be explored – gap funding, revenue share, public asset ownership.

The four Pilots announced – in North Yorkshire, Highlands & Islands, Cumbria and Herefordshire – will be funded to the tune of £5m to £10m each. These pilots will test the reuse of public sector networks and infrastructure sharing.
A BIS strategy paper is due in December.

In questioning, Sullivan explained that he thought the scorecard would be more about applications than headline speeds, and that performance requirements would follow from that. Tendering for pilots would be done locally through the usual open procedures – details are being worked out now, but they will not all be ready at the same time. Finally, we had the inevitable question about “fibre tax”, the rating system applied to fibre networks. To which we had the civil service answer of “ongoing round table discussions”, need for a level playing field etc etc.

So on the plus side there is some money available and pilots are soon to get under way. On the other hand. BDUK seem to be a classic civil service outfit, Sullivan has no telecoms experience and no real decisions have been made yet. It will still be for community groups to drive things forward.

Westminster eForum Building 21st century broadband

Sub-titled "paying,laying and simulating demand", this WeF meeting today went over much of the common ground on "superfast broadband"- things do move forward but not exactly in leaps and bounds.

I'll be writing more detailed reviews of each session over the next couple of days, but to give an overview, here is my summary

"Same old barriers" - Robert Sullivan, Broadband Delivery UK: a classic civil servant session: we're reviewing what "best broadband in Europe means" ("When I use a word,' Humpty Dumpty said, in rather a scornful tone, `it means just what I choose it to mean); a strategy paper will be out "soon"; we must have a dialogue about all this. There were some real points too: eg backhaul is an issue.

"Delivering next generation infrastructure" - Liv Garfield, BT. Impressive roll-call of statistics, a sound grasp of reality, and no bullshit. But no solution to final third.

"Making rural broadband a reality": Charles Trotman, Country Land and Business Assocaition; "our members own half of Britain", "The Duke of Westminster's estate has not-spots in it" - perhaps the Duke could cough up a contribution to rural broadband himself !
Malcolm Corbett INCA; "patchwork quilt of initiatives" - INCA is stitching together (not stitching up, I trust)
Jonathan Freeman, Arqiva - surprise, a common radio network would be a good thing
Mark Falcon, Three - surprise,surprise, Three do a lot of mobile broadband.

"100Mbps Britain", Duncan Higgins, Virgin Media
Fast broadband is selling. VM broadband is fastest and most accurately advertised

NGA and 100Mbps demand
Martin Scottt, Analysys Mason: demand comes from multiple uses of known technology (eg HD, P2P), then from increased cloud computing and then who knows (Rumsfeld "unkhown unknowns")
Adrian Crook, Fibrecity: customers buying 100Mbps - offered on a "suck it and see" basis
Colin Browne, Consumer Panel: very anxious that the superfast broadband debate doesn't eclipse the 2Mbps Universal Service Commitment.
Antony Walker, BSG: customers view headline speeds as a proxy for quality of experience; industry needs to understand demand levels for business cases and network dinmensioning; public policy should not be driven just be headline speeds, but by opportunities for innovation and improved productivity

Delivering and laying the 21st century network: Ronan Dunne, Telefonica O2 UK.
Glossy presentation and corporate speak (eg "O2Learn") got in the way of a real message, but clearly there is an investment challenge, a need to revise business modela and a concern about inclusion.

"paying for the laying"
Tim Johnson, Point Topic: £530m not enough (no evidence though)
Andrew Riseley, Berwin Leighton Paisner: Australian Government is investing £26bn and structurally separating Telstra - but will it happen and will it work ?
Simon Loe, Alcatel-Lucent: understated presentation given all they are doing, but highlighted a key issue of how to capture benefits of eg TeleHealth within the business case.
Aidan Paul, Vtesse: usual complaint about ratings system and "fibre tax" - doesn't mean he's wrong though.

Watch this space for more over the coming days.

£530m for super-fast broadband

In yesterday's Comprehensive Spending Review, despite the huges cuts elewhere, the government announced that the £530m earmarked for rural broadband will be safeguarded. Super-fast broadband will be trialled in the Highlands, North Yorkshire, Cumbria and Herefordshire. The money is being recycled from the BBC:
- £230m is left over from the Digital Switchover budget;
- and the BBC will contribute a further £150m in each of 2013-14 and 2014-15.

The recently announced project in Cornwall cost £132m - so how far will the money go ?

Previously we analysed the Labout Government £6/year "broadband tax"

Then we suggested that this figure looked close to the amount needed,but probably fell a little short. So on that basis the current amounts won't do the job.

However, there may be other ways forward. The costs for local initiatives tend to be less than BT; the fund might be used only for initial capex rather than full funding; and local community services may generate extra revenues that telcos could not capture.

We wait with interest further details from BDUK

Broadband Delivery UK explain more of their plans

A new page has appeared on the BIS website, devoted to Broadband Delivery UK - http://www.bis.gov.uk/policies/business-sectors/telecommunications/broadband/bduk

Interesting snippets from this include:

- BDUK Chief Exec is Adrian Kamellard, reporting to Ed Vaizey (joint DCMS, BIS)
- 4 organisational goals for BDUK are defined, covering USC, "high speed connectivity", and use of public asssets
-BDUK is responsible for 3 "market testing" projects for superfast broadband
- BDUK are holding an "Industry Day" to make announcements about these projects on July 15th - if you want to go email martin.doyle@bis.gsi.gov.uk.

No news yet on how they will choose the trials.

Do Jeremy Hunt's forecasts for superfast UK broadband stack up?

The Guardian’s Charles Arthur asked this question in his blog today - http://www.guardian.co.uk/technology/blog/2010/jun/08/superfast-broadband-jeremy-hunt-analysis .

Interestingly, it’s a topic we considered in regards to Stephen Carter’s £6 pa proposal back in July last year:
http://telecomsregulation.blogspot.com/2009/07/do-stephen-carters-numbers-add-up.html#links

Carter’s “Next Generation Fund” would have generated £163m pa. We concluded that, using the Analysys Mason study figures for FTTC costs, this would be close to the amount of subsidy needed to get BT to fibre the “final third”. But for FTTH it was nowhere near enough.

Creaming money off the BBC digital switchover fund (with dubious logic, and against the prevailing “savage cuts” philosophy) generates £250m pa apparently – but only until 2012. Our NGF calculation assumed 10 years of tax (or a 9.2 year payback), so there is a big shortfall from the £2.8bn cost the A-M report implies.

The way around this impasse is to do things more cheaply than BT would. The new Government has talked of “pilots” to examine other ways of doing things, and community groups generally believe that BT’s costs are much higher than theirs would be. Ofcom are pushing BT into duct sharing, but anyone who’s looked at this knows what a nightmare this would be in practice. The BBC guessed that other utilities (sic) might also be required to share ducts – but again this would be challenging, since they can’t even agree to dig the roads up at the same time. It will be interesting to see what these pilots are, and what they are planning to do.

This statement neither “details” not “clarifies” government policy, but simply raises a new set of questions.

So: “nice try, no cigar”.

Analysys Mason report on “NGA risk in the UK” – missing the moment

Back in March, Analysys Mason (AM) published a report on behalf of HMG entitled “An assessment and practical guidance on next generation access (NGA) in the UK”
(available here http://www.communities.gov.uk/publications/communities/assessmentngafinalreport) . An assessment it may have been, but its approach and consequent guidance has been undermined by the recent election.

The approach AM took was to create two dimensions: (1) three scenarios for the penetration of NGA across the country at 2012, 2015 and 2017; (2) three areas where the impact of not having NGA are highest – areas of highest “deprivation” (or social exclusion), “rurality” and “e-attitudes”. From this they produce areas classified as “priority”, “action probable” and “watching brief. This they do in commendable detail at the level of “lower super output areas” (LSOAs), producing many pretty maps of the country to illustrate their conclusions.

The problem however is that neither dimension is really solid.
The “base case” roll-out assumption has commercial plans (BT and Virgin) supplemented by the Next Generation Fund (Labour’s £6 pa tax) to subsidise up to 90% coverage. The “extended coverage” takes this up to 95%, on the basis of aggressive local initiatives (publicly funded). The third scenario is a “downside” case with no subsidy, reaching 70% population by 2017. In addition, they make some minor adjustments to take into account local initiatives, such as South Yorkshire Digital Region, but these affect only 2.5% of the LSOAs.

Clearly now, with the new Government’s focus on reducing the public sector deficit, and from the coalition partners’ manifestoes, there is little chance of public investment in such adventurous projects. Instead guidance on how that gap could be filled by community initiatives that require little public subsidy would have been helpful. Structured properly, these projects would be driven by local volunteers and use lower-cost local suppliers. This would be a better focus for a new NGA roll-out programme.

Similarly, the impact dimension is pretty soft. There is an unstated assumption that NGA is all about access to some sort of “socially valuable” services – e-government, training, education, even cheaper shopping. Yet the most likely driver of NGA take-up is television/video entertainment – broadcast, on-demand, YouTube, facebook etc, particularly once TV sets come with internet access built in (Sony has already launched one). Most other services are readily accessible at 2Mb/s. If government is concerned about citizens lacking access to important services, it should make sure they are available on the most widely available platform – the TV set.

The AM approach is to mash together Experian and CACI measures for social deprivation, mash them further with e-attitudes (ignoring obvious correlation effects) and overlay a fairly arbitrary “rurality” factor for good measure. It is not at all clear what that final index really represents and whether it forms a firm basis for the investment of several billion pounds of tax-payer money.

AM has as always produced a report which has admirable analytical detail. Sadly on this occasion they have missed the political sea-change and missed the opportunity to find ways of liberating local energies.

How to get your share of £2m from the Technology Strategy Board

Yesterday, the Technology Strategy Board (TSB) explained how the competition for funding of “Network Services Demonstrators” is going to work. £2m is available to fund selected demonstrators which sit at the intersection of thinking about the economics of the network, the economics of content and services and access protection and empowerment. The TSB were deliberately but frustratingly vague about exactly what they wanted to sponsor, looking instead for innovative ideas. But some key points did come through:

• Although not precisely defined, it is clear that they are looking for perhaps 5 to 10 projects in total – so you get an idea of scale
• There must be a network facility ( a “site”) which is open to content owners and service providers, and which allows innovative ideas (including new business models) to be tested; it is NOT just about fibreing up a village
• There must be real users connected to it; real revenues may be generated, if required to test a business model for example, but these will be deducted from the costs being funded
• Out of scope would be anything which was primarily about network provisioning, anything without a network partner, lab/research prototypes and genuinely new technology- it is a “near market” funding.

The independent assessors will be looking for the added value coming from TSB funding (ie what would happen because of the funding that would not have happened otherwise), the impact of service enablers, a proof on principle business model and pretty specific plans for implementation (including, APIs, SLAs and various other abbreviations).

The ten questions on the application form cover:
• The business proposition – is it a viable market, is there a realistic future
• The benefits including wider spin-off benefits
• The technical approach and innovations, both commercial and scientific
• Risks and risk management
• Partners’ track records and experience
• Costs, revenues and added value

The TSB will fund 50% of eligible costs (including in-kind costs), and there are various restrictions on how that is shared and a limit to academic involvement. The deadline for submissions to Stage 1 of the procedure is noon on the 24th June. Further steps lead to a decision by 7th October and project commencement around December/January.

For more information go to the Innovate website: http://digitalbritain.innovateuk.org/

NetStrategics can help with the development of business cases and innovative business models and is keen to hear from anyone planning to submit a project to this competition.

PLUM CONSULTING FIND NO EVIDENCE THAT GOVTS CAN DRIVE BROADBAND TAKE-UP

Plum Consulting presented the results of their research (commissioned by Vodafone), into the role of Governments using demand-side measures to support broadband take-up, to a meeting of the Broadband Stakeholder Group last night. They looked at broadband take-up in several countries - Europe, US and Korea – and age and educational factors, and identified substantial variations between them. However when they looked at specific government interventions – such as Spain spending €6bn in internet education – they found that the increase in take-up was indistinguishable from that which would have happened anyway. Increases in take-up in older groups was simply a “cohort effect”- people getting older.

One of the problems the researchers faced was that few of the interventions were structured to provide post-hoc review of their effect (particularly against the counter-factual of expected growth anyway). So Plum’s main recommendation was that if Government wanted to drive take-up it should conduct small scale trials, structured in a way to provide such sound information into their effectiveness.

In their view, the most significant factor in driving higher take-up was educational levels. Korea provided a good example of this where the older groups, who had been educated when Korea was relatively poor, showed below average take-up whilst the younger generations showed above average take-up.

Plum did explore the main causes and barriers to take-up. Broadband was seen by non-adopters as not relevant, expensive and complex. A positive “social infrastructure” – education, workplace usage, local language content – supported higher take-up.

Addressing these issues, Plum compared PC-based broadband with mobile broadband platforms such as iPad. They concluded that mobile broadband would drive greater take-up as it was application-led (improving relevance), much easier to use (no file structure, faster, easier updates) and could be supported by pre-pay options (getting round credit card issues). The reader might like to recall, however, that the research was commissioned by Vodafone.

In the Q&A session, some people questioned whether mobile was an appropriate platform for services like completing your tax return or accessing medical records. It seems clear that different platforms offer different advantages and that they will be used in different ways.

Whether putting Government services online would drive take-up was raised. The general view was that it would not, as closing down offline options would too badly disadvantage those groups of non-adopters who might specifically need those services.

I think a more significant effect would be internet on the TV set. The TV is almost universally adopted and easy to use; the fastest growth in internet applications requiring broadband is in iPlayer and other on-demand TV services, YouTube and Facebook – ie video-based services. So it seems inevitable that once TV sets with internet access built in become available - with a simplified browser replacing the EPG - that broadband take-up will accelerate dramatically. Current internet applications then in effect replace Teletext. Of course that might show up that the question was not what it appeared – it is not broadband take-up per se that is the concern, but use of online services to help Government reduce costs.

You can read Plum's account of the research from page 31 of the document at
http://www.plumconsulting.co.uk/pdfs/Plum_March09_Demand-side_measures_to_stimulate_Internet_and_broadband_take-up.pdf

COLLABORATION NATION - NEXT STEPS

The “Collaboration Nation” conference organised by the Technology Strategy Board showcased the 84 feasibility studies chosen in the Digital Britain innovation competition, worth in total £2m. Further funding and support will be available for the next phases:

A DIGITAL TESTBED will enable innovators to test out their ideas, experimenting in a realistic setting and demonstrate the opportunities to potential investors. The TSB are planning for this to go live during the summer. I have to confess that I don’t really understand what this “testbed” actually is, but the picture on the screen looked like an impressive networks operations centre.

A new concept, NETWORK SERVICES DEMONSTRATORS sounded more the sort of thing that will appeal to community groups. There is another £2 million up for grabs in a new TSB competition starting on the 10th May. As well as looking at technical issues, the competition will be looking for innovation in business models. This could be a great differentiator for projects which deliver tailored community services.

Going further, with the DIGITAL BRITAIN projects (both those which went through feasibility and other new ones), there is another £18 million available in a competition beginning in July. The focus of this will be on collaborations which bring together industries and communities. There will also be another round of feasibility studies again next year.

Two other areas are also the subject of funded competitions. £8m is available for TRUSTED SERVICES SOLUTIONS in a competition starting on 10th May, and £5m for SMART METERS AND SMART GRIDS later the same month.

So over £30m allocated for innovation in this area – impressive in times of such financial crisis. I suppose there is a risk that these initiatives get cut after the election, but on the scale of things £30m doesn’t make much impact on the deficit.

Community broadband projects have been successful in the first round of feasibility studies. The well known Cybermoor project in Alston, and a neighbouring project in Weardale both got through and presented their work. 21Media from Lancaster University who worked with WrayComCom also got funding for a study into utility-like community networks providing a standardised infrastructure for multiple providers and service offerings. Aegis Systems were looking into low-cost backhaul using the 1800 MHz band, and Broadband Access Strategies LLP are building a review of cost-effective technologies for rural areas.

For more on these and other projects go to http://digitalbritain.innovateuk.org/

COLLABORATION NATION – DEPLOYMENT AND OPERATION OF DIGITAL INFRASTRUCTURE

“Collaboration Nation” was the conference organised by the Technology Strategy Board to showcase the 84 projects chosen in the Digital Britain innovation competition, worth in total £2m. One of the afternoon strands focused on infrastructure issues, the most relevant to community broadband initiatives.

BATH LABS was the first presentation. Their project aimed to demonstrate NGA delivery to flats, hotels etc at speeds of 1Gbps using unused bandwidth in the existing internal terrestrial TV distribution system. They reckoned this gave faster installation and reduced costs. A major advantage is that the TV system will already have maintenance arrangements (usually high quality). The market is a sizeable niche, though the many and varied installation arrangements can make a one-size fits all solution difficult. Neat solution for valuable niche.

NEXUS ALPHA have developed a very low power computer and are looking to take that further to 0.5W to 3W in order to run solar powered WiFi. This would be ideal for remote regions, bringing web connectivity to otherwise unconnected communities, and for temporary systems in emergency or relief situations.

To my mind, the most interesting presentation for community broadband groups was from POWERLINE TECHNOLOGIES. They string fibre over the overhead electricity infrastructure. A head-end is then installed on the final pole, where the transformer is located (and which is already reinforced). This provides 200Mbps to an average of 8 homes over broadband powerline communications. The same system can also provide backhaul into 3G not-spots and smart-grid capability to the electricity company, thereby sharing the costs between more players. They aim to do a proof of concept trial in April, and are looking for community partners.

ZAP CORPORATION’S pitch was totally different. They have a method of IP packet inspection which enables them to insert targeted content (ads) into IPTV streams. A profiling engine allocates individuals to one of many sub-sectors, allowing ad agencies to select appropriate content to be delivered. There are some data privacy issues, though active consent and the fact that individuals’ information is not released to the ad agencies get around most of them. Clearly this is a coming service – time will tell whether this is the right technology.

For more on these and other projects go to http://digitalbritain.innovateuk.org/

COLLABORATION NATION – HIGH POTENTIAL PROJECTS

“Collaboration Nation” was the conference organised by the Technology Strategy Board to showcase the 84 projects chosen in the Digital Britain innovation competition, worth in total £2m. I’ll write a few separate posts about different aspects of it – this first one covers the first session where four “high follow-on potential” projects were presented.

First up was GNODAL. They are developing a new generation of 10/40 Gbit Ethernet switches for use in NGA networks. Their switches virtually eliminate congestion, are scalable and have low power consumption, hence lower costs and carbon emissions. They are now looking to develop a 2Tbit testbed capable of delivering 100Mb/s per user to 20,000 homes. All very clever no doubt, but only exciting to techies.

RENAISSANCE SOUTHEND described how they were helping to regenerate Southend – famed for its creative industries, apparently - by building a wireless mesh network off the back of the council/school Gbit backbone network. More work is needed on the cost plan and business model evaluation, as well as an e-commerce element to the website front-end. A bit vague on what innovations are coming, and not that original otherwise.

PROVISION described their Stadia Casting project which provides wireless video and information feeds direct to smartphones for crowds at big events, like pop festivals or major sporting events. The idea is to provide people actually at the event with the same or better services as those watching on TV at home. Certainly needs doing, though smartphone screen may be a bit small – iPad perhaps.

ILLUMINA DIGITAL closed the session. They are working to improve the workflows of the UK TV content distribution platform. Currently this is a mish-mash of manual and digital processes – ultimately it will be an integrated digital system including features such as DRM. Good luck guys – it sounds like herding cats.

For more on these and other projects go to http://digitalbritain.innovateuk.org/
I’ll be posting more comments over the next couple of days.

VALUE PARTNERS PRESENTATION AT BSG – THE SERVICE AND APPLICATION PROVIDERS VIEW

At yesterday’s well-attended BSG meeting, Value Partners (ex Spectrum Consulting) presented the results of their survey of service and application providers’ views on superfast broadband. People from BBC and Sky through mySpace and direct.gov were interviewed about how they saw things today, in a few months and over the longer term.

The basic conclusion was that it was the end user experience that mattered, and that access was not the only pinch point – the whole end-to-end service needed to work.
The current position was seen to be acceptable (for now) because expectations were low, and content providers could provide adaptive versions (eg text-only at busy times). But once TV sets have internet built in, and cloud computing takes off, expectations will rise and guaranteed quality of service becomes an issue. This could lead to a bandwidth crunch and even a “battle for bandwidth”.

Looking to the future, there were surprisingly few original ideas: HD everywhere, video meetings, enhanced collaboration – plus “something no-one has thought of”. Definitely a “build it and they will come” view – confident that any capacity will be fully used.

Surprisingly despite the importance of the end-to-end service, most service providers didn’t want to have to understand how the network worked, and didn’t talk to network providers very much. And they accepted that there would probably be a mix of capabilities for the foreseeable future.

The panel discussion was opened by Richard Cooper, responsible for IP distribution at the BBC. He explained how adaptive bit rate coped with the current network variability, and emphasised that customers would not put up with much buffering. HD iPLayer is available now, but demands a high powered PC as well as fast broadband, so is not used much. In the future he saw massively increased consumption of video, more devices especially IP on TV (they have Wii applications already), HD essential, and linear TV over IP – notably the Olympics. QoS vs neutrality issues are going to have to come to a head soon, with challenges for smaller players.

Ed Uzzell of Sony explained their vision of 90% devices connected by 2012, and saw an IPTV arms race between content providers and device manufacturers.

Mark Hewis of LoveFilm described the on-demand service they had launched with Sony. Customer expectations were the same as for broadcast TV – buffering not acceptable. He wanted ISPs to take the lead in explaining what the network could deliver – he’d rather know in advance that a particular location could not received the streamed version, because he could offer the customer the option of downloading it and playing it back in say 10 mins. Streaming games would driev huge demand with non-cacheable content.

The discussion afterwards dealt mainly with the relationships with content delivery networks and how that needed to improve. The BBC work had at it themselves, but despite their size, even they needed help and could not cover every ISP.

Pensioner in price cap shocker

Ofcom has published its Review of the Wholesale Broadband Access Markets (WBA), updating a 2008 assessment. A lot has happened in the past two years, you might think. But not in the case of WBA. Last time around Ofcom, like a latter-day King Lear, split the moiety of the United Kingdom that has the good or bad fortune not to be Hull into three. Like Lear, Ofcom proposed a somewhat unequal distribution to its daughters, though one would hope that the consultation process will be a little more fit-for-purpose.

At any rate, unlike Lear, Ofcom does not seem to have changed its mind much in the intervening period about how the kingdom is to be divided. Back in 2008 16.4% (now 14.2%) of UK premises were in exchange areas served only by BT. Another 13.7% (now 13.8%) had two or three competing operators and the remaining 69.2% (71.3%) were blessed with four or more. And no doubt also "With shadowy forests and with champains rich'd, With plenteous rivers and wide-skirted meads".

What with all those forests, meads and stuff, it was clear to Ofcom that no regulatory intervention was needed there, then and now. Not so for the other two daughters, though. In 2008 Ofcom imposed general access and non-discrimination provisions on and obtaine voluntary commitments from BT to keep wholesale prices between a floor and a ceiling. The floor commitment ran out last summer and the ceiling goes this December.

Now, though, Ofcom is proposing to ease restrictions where there are 2-3 operators, in the hope that competition will pick up there. Meanwhile it will bear down harder on the one-operator daughter with a price cap, an obligation for prices to be oriented to cost and another for cost accounting to provide transparency. Presumably, in the matter of competition Ofcom is convinced that "nothing will come of nothing".

Of course the outcome for Ofcom's predecessor was far from happy. It remains to be seen whether Ofcom's discriminatory behaviour will also lead it to perish on some blasted heath, but that's a drama for another day.

Labour slowly getting faster

There will be lots of cynicism about Gordon Brown's speech on getting superfast broadband to everyone in the UK - probably justifiably, but at least it's something. What Labour don't yet seem to be getting is the idea that it's not all about bunging cash at BT.

Jim Knight, the minister responsible for digital inclusion, accepted that the government had to intervene to ensure super-fast broadband reached remote areas of the country. But he told BBC Radio 5 live: "You offer incentives to the market to get to those areas that otherwise they're (HW: presumably meaning BT or Virgin) not going to be able to make a profit out of going to."

This ignores the prospect of community groups "doing it for themselves". Time to release the passion and innovation of the community, surely ?

Social TV Forum @ Olympia; The Future of TV & Social Media

I visited the exhibition at this event, looking mainly for interactive TV initiatives with targeted advertising opportunities. I have to say there weren’t many.

About half the stands were for Social Media agencies – all excited at the prospect of taking your money to tell you how to do what you already do. OK, so I didn’t give them a fair chance to convince me that they had the single unique answer for turning social media into a money-spinner but, hey, life’s too short.

I did start to listen to a workshop speaker on ROI for social media. But when I realized I’d been sitting next to him on the train and had seen most of his presentation then, I wandered away. None of it was rocket science anyway. Neat presentational tool called Nudge though.

Of the stalls I talked to people at, the highlights were:
• Monterosa: assuming people are on their laptops while watching TV; allows
games based on program (eg who’s fired next?), plus chat and comments;
could use for product placement opportunities once allowed
• tv genius: web-style search function on STB simplifies search for VOD
content; works with …
• NDS: EPG design platform
• Comment technologies: white-label social networks

So not a lot really.

http://www.social-tv.net/

BSG cost model for fibre

The BSG have appealed for information about fibre costs in order to review the A-M model produced in Sept 2008.

"We are particularly interested to get cost data from actual deployments by local and community projects and other new entrants that may have utilised new methods of deployment, to understand how the costs of deploying fibre may have changed since the report was first published".

At the Newark colloquium I attended, organised by Digital Dales, several people said that the A-M costs were way too high. I'd suggest that if anyone has evidence of this, then they send it to the BSG - contact Peter Shearman (Peter.Shearman@Intellectuk.org]

Broadband Delivery UK

Stephen Timms announced yesterday the formation of a new body, called Broadband Delivery UK, to oversee the 2Mb/s broadband universal service obligation. Long on rhetoric and short on detail - who is on it, what are its terms of reference, what powers will it have- the statement is nonetheless interesting for its reference to a new Analysys Mason report (they must be doing well out of all this !) which describes which communities might be prioritised by the fund. More comments on this once I've read it !

Huw

Mobile World Congress, Barcelona, Feb 2010

A few observations from meetings, exhibition and atmosphere at the 2010 Mobile World Congress.

Main themes

• Similar themes and challenges to 2009 – where is the money going to come from and who is it going to go to?
• Appstores, appstores and more appstores.
• Not at all clear how operators in mature mobile markets are going to grow revenues in future.
• Big difference in challenges faced by operators in mature vs less developed mobile markets.
• A congress in transition –big players participating (or not) more on their own terms.

Network operators

- Common recognition of network capacity issues, plus an increasingly frantic search for cost reduction options – WiFi now reinvented as a low-cost offload; femtocells similarly positioning themselves as unit cost reducer. Being an integrated fixed & mobile operator therefore becomes a cost advantage

- Network spending continues to be slow; mobile operators looking to get more from existing assets and less capex. Possibly some signs of easing since Q4/09.

- 24 operators launched the Wholesale Application Community (WAC) “...to create an ecosystem for the development and distribution of mobile and internet applications irrespective of device or technology”. Trying to build on the OneAPI initiative.

- Not much LTE vs WiMax argument any more. Differences of view on speed of rollout of LTE in Europe. Early LTE deployments in Mid-East and parts of Asia-Pac.

- Operators caught between several rocks (capacity limits, new forms of competition, commoditisation, technology change, regulation of wholesale prices) and a hard place (tariffs with large, effectively “all-you-can-eat” data bundles)

Vendors

- Continued growth of Chinese vendors, now with good track records of delivery, not just price-based contract wins

- Continued revision of vendors’ visibility in the main Halls (very small direct presence from Cisco, IBM, none from HP). More use of surrounding hotels and pavilions.

- Surreal sight of a stand in the infrastructure Hall being taken up by Golla designer bags and phone holders. Maybe someone misunderstood “carriers”, or maybe a belated tribute to Alexander McQueen?

Devices and Operating Systems

- No real excitement on devices. All the action around showing off applications and appstores.

- Latest attempt by Microsoft to be a significant player. Announcement of Windows Phone 7 Series. Not much interest from rest of mobile value chain. More bark by Ballmer than bytes likely to be attracted to the platform.

- There’s a danger that Phone 7 Series will be neither fish (very open and developer-friendly) nor fowl (closed and proprietary and more profit-friendly)

- RIM the biggest visible presence (mainly populated by developers) of all the device manufacturers.

- Samsung launching its own appstore (Bada) – maybe concentrating on AsiaPac developers and market? Also a whole host of alphabet-soup phone ranges and product platforms (eg Monte, Corby, Chat, AMOLED, Wave). Samsung’s consumer electronic strengths, eg screen technology, very apparent, but exhibition was more cluttered than 2009. Maybe Samsung Bada could gain momentum in Asia-Pac?

- Qualcomm gaining more traction through the value chain (starting to stretch into enhanced multimedia, as well as “traditional” strengths like multi-access (HSPA/WiFi) chipsets

- Development of low-end phones for developing markets is becoming more apparent (eg ZTE)

Applications and developers

- Far wider range of applications than previous years. Hard to pick a lead focus of development (cf maps in 2009),

- A whole Hall dedicated to “AppPlanet” – the nearest thing to hype at this year’s event.

- Everyone but everyone touting their own appstore or app development platform.

- Not clear where the money is – RIM suggesting that business-focussed apps have customers willing to pay; Apple and Android more consumer-focussed as larger addressable market

- Big difference in takeup of data services on devices >$200 vs <$200. Maybe an opportunity at this lower end?

- Facebook to develop “Facebook Zero” for lower-end feature phones

- Far less technology development for operators – eg only six small booths on upper level of the technology Hall, last year was crammed. Maybe this is a confirmation of operators’ consolidation and tight spending

- One new feature was the presence of country booths promoting small/medium developers under the nation’s banner eg France, Belgium, South Korea, Ireland. Tea and sympathy in a small booth promoting the UK.

Low Carbon (not)

- Sustainability, low-carbon and green issues are still mainly token gestures

- Most of the vendors’ stands had rotating slide decks about all their acronyms and how they would do a great job for carriers. Each deck had a slide on how green it all was, but it was always the equivalent of a footnote; they may as well have said “our people are our biggest asset”.

- To be slightly more optimistic, there were a few booths around the place that were more dedicated to renewable sources, esp for base stations in developing world, to some extent also for battery recharging. For example, the Powermat wireless charging approach – not yet at the point of really using renewable energy for the charging, but at least getting rid of the multitude of chargers we plug in.

Big beasts in the jungle

- Google - keynote by Eric Schmidt: “Mobile First” is Google’s strategy. Message of “we come in peace”, wearing the sheep’s clothing of “surely openness is good for everyone”. Ironically a demo didn’t work because of connectivity shortage – maybe Google could have paid to have priority on a network for the duration of the demo? Android now shipping 60k devices per day. Maybe "Mobile First" means that Google plans to eat the lunch of the mobile operators before it takes on anyone else?

- Apple – maybe the first signs of some question marks over the Apple experience, eg lack of multitasking, lack of Flash, which could open up market gaps for other platforms

- Microsoft – hardly discussed by anyone. Developers, when asked open question, say they are developing for Apple/BlackBerry first, BlackBerry/Apple second, Android third.

- BlackBerry – major upgrade of visibility in the exhibition hall. Pushing hard to try and build lasting momentum in non-enterprise world

- Huawei/ZTE – a major fixture now at MWC

- Vodafone (representative of operators) – difference between prospects and requirements in developing vs mature markets; complaining strongly about Google’s tanks on lawn; supporter of WAC

Overall mood

- Sense of uncertainty and transition – power balances moving, business models changing rapidly as a result of impact of mobile applications

- No sense of any major meaningful announcements

- Very unBarcelona cold and wet weather, so less energy and buzz on the main avenue

BIS consulting on how to spend NextGen Fund

Earlier this month, BIS announced its consultation on how to spend the money raised by the 50p/line Next Generation levy. The 23 questions in the consultation raise serious issues about conflict with free market approaches and chilling investment. The questions also cover the fixed/wireless debate, required speeds, open access, active and passive wholesale products and competitive effects, applications and services, and Government claw-back. In other words, pretty much everything exceot how to select the operators.

BT will be deploying teams of people to respond to this consultation, looking to get its hands on as much of the Fund as it can. No doubt it will argue that only they can provide a network which integrates with the commercially deployed fibre networks - or at least that economies of scale mean they can do it cheapest.

So how can Community Broadband initiatives ensure that they get a fair hearing ? Simple assertions that it is fairer or better will not suffice - what is needed is a thorough analysis and business case which demonstrates that this approach brings the greatest benefits.

Huw Williams
NetStrategics - analysis for telecoms strategy