17 June 2009

UK (Video): Digital Britain: Further reaction

17 06 2009 - Broad criticism of unambitious minimum broadband speed target, with equivalent projects in other markets cited; stealth tax on landlines to fund the project also widely criticised.

Digital Britain: The Final Report

Matthew Howett, Senior Analyst, Ovum:

“[Lord] Carter's plans appear ill thought out. Firstly, the model follows a similar approach to the one originally taken in Australia, which the government eventually abandoned in favour of building a fibre-to-the-home (FTTH) network itself after concerns that a fibre-to-the-curb (FTTC) solution (most likely what the fund will enable) would not represent value to the taxpayer. FTTC would mean speeds of up to 50Mbps by 2017 – hardly future-proof when compared to other countries.

“Secondly, the introduction of a specific tax on fixed lines rather than using general taxation hasn’t been used elsewhere. It may have the effect of accelerating the pace of fixed-to-mobile substitution, which would only serve to reduce the size of the fund and provide a signal to the mobile sector and in particular to mobile broadband, which Carter admits himself is unlikely to deliver true next-generation bandwidth.

“Despite attempts to ensure we all have access to the internet, Carter also is ready to take it away. One of the most contentious issues of late in Europe has been the issue of illegal file sharing over the internet.

“Britain has decided not to go down the ‘three strikes and you’re out’ route, instead ambitiously expecting to reduce unlawful activity by serving written notification to the abuser and then informing the content owner of their identify for them to take further action. If this proves not enough to deter people then bandwidth restriction will be considered.

“Whilst this might work in the very short term, ways around the restrictions would soon be found. It would have been more forward looking to reassess the whole system of digital rights and access to online content.

“Trying to apply 18th century rules in a 21st century world isn’t sustainable and will not foster the creativity that is expected to make use of the digital infrastructure. Expecting this approach to work highlights one of the report’s greatest weaknesses and almost fails to capture the debates that have been taking place, particularly around network neutrality.

“Whilst the imitative was likened to the building of roads and bridges of the past, it clearly lacks the scale, funding and ambition.”

Paul Lawton, Managing Director, Opal Telecom:

“The Digital Britain report offered an opportunity to address the fact that the UK has failed to keep pace with convergence and digital technology on a European and international scale, but the report has become a missed opportunity for UK business and puts no framework in place to create the Prime Minister’s ‘digital capital.’
“Although the report acknowledges that broadband is an ‘essential commodity’ for economic and social progress, the focus remains on social use and the domestic user, with the report concentrating much of its content on allowing consumers access to video content. Consumer broadband performance is focused on downstream speed only but in the business market the need is to ‘share’ business information and applications, a two-way process requiring large files and data to be exchanged in both directions.
“The UK is already at risk of being left behind and committing to a minimum of 2Mbps by 2012 – while good news for domestic users - is not going to help UK businesses to effectively compete in the future or enable business owners to accommodate requests for flexible working.
“For flexible working to be a viable option, home workers need to be able to enjoy the same ‘experience’ (speed, performance and security) as they would in the office. This would usually involve running some form of IP VPN as well as the use of desktop conferencing, VoIP-based applications and MPLS networking allowing workers to be connected into the cloud using low cost broadband links. However, what all of these opportunities require is broadband that is both ubiquitous and capable of providing the performance and speeds to support them.
“A minimum recommendation of 2Mbps is a step in the right direction and the benefits will certainly be felt by consumers. However, Digital Britain’s focus on downstream speeds of only 2Mbps will limit broadband’s wider use, because for businesses it is the upstream which is the limiting factor.

“If, as the Prime Minister says, Britain is to leapfrog other countries from its current position, a framework must be put in place to support the new raft of high bandwidth, business critical applications required for UK businesses to complete.”

Spokesperson for Carphone Warehouse fixed/broadband unit TalkTalk:
“Before the telephone tax becomes law, it is the Government’s job to consult and justify the charge while explaining how people will benefit.  We will be involved in this debate representing the views of our customers and, of course, if legislation is passed we will collect the tax as directed.
“The Digital Britain Report fails to acknowledge what almost every informed commentator knows; that determined filesharers will find a way around any technical roadback that can be put in place. Our position on filesharing has always been clear; we refuse to disclose our customers details unless the case against them has been proven in court.
“This remains our view and, while we’re pleased the Report reflects this, we’ll be participating in the forthcoming consultation to ensure that our customers’ rights are protected.

“Technology is moving fast in this area and there are already a number of proven ways that people serious about file sharing can avoid detection, so the suggested route means the only people who are likely to be be caught will be light, unsophisticated users of file sharing or people who have had their computer or Wi-Fi network compromised by a third party.

“There is only one sustainable and practical solution to the problem and that is for rights holders to adapt their business model and make their content easy and cheap to access legally online
“We have long recognised the importance of digital inclusivity and welcome the plan that has been put forward as it delivers central funding without putting a further burden on the customer.”

Richard Heap, Head of Telecoms, at BDO Stoy Hayward:
“Despite being widely criticised in January for only committing to a broadband network speed of 2Mbps by 2012, Lord Carter has gone ahead with plans to provide Britain with outdated technology at a speed akin to a snail’s pace. This is even more frustrating when other countries, such as South Korea, are committing to universal speeds of up to 1Gbps by 2012, which is 500 times faster. Even Gordon Brown has gone on record saying that all households should be able to enjoy broadband speeds of 10Mbps.
“We believe that the Government should consider investing some of the £25 million into innovation projects. One such example they could follow is Quintain Estates which has recently announced that it has installed a high-speed fibre-optic technology to a new residential development where residents can enjoy speeds of up to 100Mbps.
“To add insult to injury, Carter has said he’s going to tax every phone line in the country £6 per annum to fund this inaptly named “next generation” network. Especially as an Ipsos Mori poll has shown that 43 per cent of people wouldn’t use broadband even if they had access to it. This clearly begs the question of where resources should be allocated - surely in quicker broadband rather than trying to meet the Universal Service Commitment?”

Trefor Davies, Chief Technology Officer, Timico:

“Two funding streams have been identified for the 2Mbps Universal Service Obligation and the longer term Next Generation Access broadband. The 50p per analogue line will raise about £180 million a year and the diversion of funds from the unused digital TV switchover fund will account for £200 million.

“I guess my point is that in last year’s Caio Report the NGA network was estimated to cost £29 billion and a large proportion of this would have been spent in areas that currently can’t get broadband and would be in the USO area.. The per line cost of providing 2Mbps is probably not much less than the 40 or 50Mbps talked about in NGA.

“So the funding identified for USO can only be a start and there is a scenario where they might just as well go straight for the fast stuff.  It is good that the Government has recognised that the Digital Divide exists but they do need to do more.”

Click here for more from Trefor Davies.

Chris Woodland, Communications, Associate Partner at KPMG:

“The proposed Next Generation Fund presents new opportunities for service providers to deploy broadband networks to the final third of the UK population.
“But the strength of the investment incentive will depend on the associated regulation, as yet unknown – will, for example, these service providers be forced to open these networks to third parties in due course?
“Mobile operators will benefit from greater certainty in owning 3G licences indefinitely and from Ofcom’s desire to promote further levels of network-sharing, but this will be tempered a little by the unknown quantum and changes in any additional costs payable as an Administrative Incentive Pricing (AIP).

“Clear messaging around the desire to promote network-sharing does raise the possibility that Ofcom may look sympathetically upon the prospect of fewer mobile networks operating in the UK in the long term.”
David Thomas, Head of Communication Regulation, KPMG:

“Residential consumers, SMEs and teleworkers are likely to be disappointed by the lack of ambition for universal broadband speeds of only 2Mbps. 
“However this low target is not surprising, given the lack of available Government funding due to the current economic environment and the industry view that customers will be unwilling to may much more for broadband.”
“This is in stark contrast to the radical plans announced in Australia to spend £21 billion, funded jointly by Government and industry.”

Michael Phillips, Product Director,

“A 2Mbps commitment is a pretty underwhelming aspiration given the rest of Europe already experiences over 6Mbps as an average. If this is a headline speed then experience would indicate that many recipients will actually get only a fraction of this, as headline speeds presently fluctuate dependent on levels of usage and how far users are from junction points...
“The Government is proposing a carrot of offering indefinite 3G licences to mobile operators in a bid to stimulate investment to patch over rural/outlying not-spots. The investment from the operators will be significant so the success of this will ultimately hinge on the operators’ ability to recoup outlay in any reasonable timescale given the population density in many of theses areas. The fall back option is to use satellite infill which could be prohibitively expensive to subsidise on a per household basis...
“The Government’s target to hit UK-wide 2Mbps broadband coverage for all by 2012 is a very tall order. Updating and implementing the necessary mobile and fixed line infrastructure in three years will require a massive coordinated effort and a clearer route to bolstering the £200 million from direct public funding to be achievable...
“It’s a bold move to tax all cable and copper lines by 50p per month to fund the infrastructure for superfast services to the estimated third of the population that will be left behind by the ISPs. This could potentially deliver some £175 million a year towards the project. Unsurprisingly, the report has left any timescales for implementation – and the term of the proposed levy – frustratingly vague.”

Source: mobilenews

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