Networks in 2016: A full fibre diet for UK.gov

Blighty’s post Brexit diet must include a "full-fibre" eating plan, or so says the UK’s new digital minister Matt Hancock. Amid all the political noise over the last 12 months, the volume for infrastructure investment was dialled up to 11.

In the Autumn statement, chancellor Phillip Hammond announced a £400m "full fibre" Digital Infrastructure Investment Fund that would enable matched private sector finance to invest in new fibre networks over the next four years, and an exemption for businesses rolling out pure fibre from paying land rates over the next five years.

Meanwhile Ofcom's decision to legally separate Openreach from BT, falling short of chopping off the broadband division entirely, provided the big regulatory backdrop to the year.

Ofcom found that the former state monopoly was hampering competition as Openreach acts too much in the interests of BT. (Although cynics might observe that a once-in-a-decade review of the sector wasn’t necessary to arrive at the conclusion).

Elsewhere the £1.7bn taxpayer-subsidised Broadband Delivery UK (BDUK) programme, reached its goal of 90 per cent 24Mbps connectivity this year and is on track to hit 95 per cent next year. This was a goal that at first seemed extremely unlikely given the mishandling of the scheme.

The next stage appears to be government plans to ensure that everyone in the country receives a 10Mbps universal service obligation (USO) by 2020 - via a combination of mobile, broadband and satellite.

Fixation on 1Gbps

With all that in mind, you might be forgiven for thinking that UK is finally getting its act together as a fully connected nation. But Dan Howdle, director of communications at broadband comparison site Cable.co.uk, believes we shouldn't be taken in by the rhetoric.

While the fibre-to-the-premise (FTTP) investment plans could be good news for smaller providers, he says the plans are really just "gilding the lily." He adds the places that will get FTTP "are not rural black holes".

"It will be in large city areas where there are big businesses. And that ties into other measures the government is taking in terms of cutting corporation tax. Theresa May knows after Brexit businesses are threatening to leave. So these measures are all part of a package aimed at keeping businesses in the UK," he tell El Reg.

For the government, Howdle believes, the only signal that matters is the one going out to big companies.

Those concerns were echoed by Scottish Nationalist Party MP Calum Kerr. "Rather than closing the digital divide, the government is cementing it and turning it into a chasm where you've got 1Gbps for urban areas and 10Mbps for rural areas," he tells us.

Howdle agrees poor connectivity is the far bigger problem. “Right now, we need to stop worrying about FTTP as much as we are,” he says. "You only need 24Mbps for 4k ultra HD TV. Most people don’t need a lot beyond that. There is currently simply no need or use for 1Gbps. As much as it might be future proof - I’m yet to see anything [that it is a requisite for]. It is speed for speed’s sake.”

The focus ought to be places with exceptionally poor connectivity: the people in final five per cent. "All those people should have had a letter telling them exactly how they will get decent broadband and when. They are just left in limbo and there are no really good answers out there.”

Call that digital?

Even the proposals so far with a USO have been fraught with problems, the regulator Ofcom has said there is a lack of appetite for anyone to come forward beyond BT. But Howdle believes the government hasn’t really asked itself “how the hell are we going to do that.”

Shadow minister for culture and the digital economy Chi Onwurah believes this year minsters are using the term “fibre” much more.

“Previously it felt like a swear word. So the fact they are using that language is good."

But she agrees that not nearly enough has been done to address the fact some people can’t get decent broadband in cities, while there are rural areas where no one can get decent connectivity. "How can we say we have a digital infrastructure when that will still be the case in 2017”

She tells The Reg: "What matters now is getting ubiquitous broadband. And we should be upping USO to 20Mbps in the next three to four years. But we still don’t know who is going to pay for it, there is a worry a deal might be struck with BT."

Nevertheless "fibre is the right destination," she says. In her previous role Onwurah headed up telecoms technology at Ofcom and says back then she had arguments with people who thought 2Mbps and 10Mbps were more than people would ever need.

“Network architecture takes time to build out. So knowing where we are heading to matters."

Not surprisingly, she is more concerned at the end of 2016 than the beginning about Britain’s digital infrastructure. “Brexit and the loss of the EU projects and plans, such as 30 Mbps or more for all by 2020, means we are losing that push. And now more than ever we need the government to recognise the importance of getting everyone [connected].”

Poor old BT

Much of this year’s chatter was dominated by what will happen to BT and Openreach. But Ovum telecoms analyst Matthew Howett, believes that in the process BT’s plans for ultrafast broadband speeds have been unfairly sidelined.

This year the incumbent began to roll out its G.fast technology which will connect 10 million customers to speeds of more than 100Mbps by 2020. A further 2 million homes will receive FTTP by that date.

“This has been a year of intense public debate about BT and fibre. But we have to remember the reasons for Sky, TalkTalk and Vodafone to be making a noise.”

He says BT’s lack of pure fibre investment, has been used as a stick to beat the one-time state owned organisation. "I don’t think people’s appetite for broadband has changed significantly this year. There aren’t swathes of the population saying we need more than 80Mbps.”

"I don’t think BT is saying ‘lets not lay fibre in the ground.’ They are faced with a choice - wait five years until the economics work or you do something with G.fast in the next 18 months and then upgrade when it makes sense. No one is saying G.fast is the end game."

But others, such as professor Peter Cochrane, former CTO and head of R&D at BT, are sceptical g.fast will live up its its promise.

He believes the technology has been tested in a laboratory under idealised conditions. "Some people are quoting they can do a gigabit over 200 meters - I can categorically tell you they cannot. What they can actually do is a gigabit over 20, possibly 30 meters. After that it just dies."

For Ovum's Howett, wrapping up the separation issue soon, which BT appears to have been dragging its feet over, will be in everyone’s interests.

“We don’t want another six months of fighting between providers. The arguments have been made, it would be good if there were no more reports or inquiries and now we just make a decision and work with it.” Those sentiments are no doubt shared with a lot of other industry-watchers.

"The amount of time Sky, Vodafone and TalkTalk direct toward this issue is huge. So many people responding to it, talking about, time better spent doing other stuff. would benefit everyone.”

Equality of mediocrity

Cable.co.uk’s Howdle believes there is an argument Ofcom did not go far enough by falling short of a full structural separation. A full bifurcation may have better addressed some of the arguments that it has acted in a monopolistic way. “There are all sorts of subtle ways it can gain an advantage. It should be split out as a completely separate entity working on behalf of providers, [that] would be more egalitarian.”

But Howdle cites the BDUK programme delivered by BT as one area of success. That is despite the scheme having been mired in controversy, with BT most memorably being labelled a “vampire death squid” by MPs in 2013 for the way it treated smaller, local providers.

Since then the project has been successful in achieving its goal, with the government even being able to claw back a significant amount of money, he claims.

UK.gov recently announced a clawback of £440m from the scheme, which is intended to connect 600,000 more rural areas. The government now expects to reach 97 per cent of the population with speeds of 24Mbps by 2020.

“I do believe the government is using that money to extend beyond its original promise. And it has been successful in achieving 24Mbps, which was done in a relatively short space of time.

"There is always room for improvement, a network will take years, there will be people waiting and those that are served first. But if you asked me [several years ago] I’d have said I didn’t think they would get 95 per cent coverage. But they have.”

As the BDUK scheme wraps up, the government will need to seriously ask what its willing to do to tackle poor connectivity.

Then there is the unfinished business of a BT and Openreach separation, a model for the USO, and its promises for a “gigabit Britain' - all against the backdrop of de-coupling policy-making from Europe.

If 2016 was all about making mission statements, then surely 2017 ought to involve some detailed plans.

What passes will depend on how much of the government's own fibre hype has been swallowed. ®