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USC: Solving the Digital Divide?

Like many in the UK communications industry my colleagues and I at Entanet have been eagerly awaiting the Digital Britain report. Darren Farnden, Entanet’s Head of Marketing, has posted an interesting assessment of key parts of the report at opinion.enta.net.

Given the content of Darren’s article I thought it would be useful to post it in full here for CircleID readers:

The Digital Britain final report has now been released by Lord Carter and outlines Government’s plans to introduce a new Universal Services Commitment (USC) ensuring 100% UK broadband coverage with speeds of at least 2Mbps by 2012. The existing USC which applies only to BT and Kcom will be replaced and the burden will be shared by the industry as a whole.

The long awaited report confirms the ongoing speculation of the 2Mbps USC and confirms that this will be achieved by a number of technologies including home wiring improvements, Fibre to the Cabinet (FTTC) and mobile and satellite solutions to reach the most remote areas. Over recent months there has been mounting speculation as to how this expected USC would be achieved and funded. Possibly the most shocking outcome of the report is the news that public funding will be used to find the most cost effective technology to bring 2Mbps broadband to the UK’s ‘not-spots’.

We’re pleased to see that Government recognises the importance of improving customer experience to all areas of the UK. However, if customers in more rural areas are to actually enjoy the same level of service as those in urban areas then achieving 2Mbps really must be viewed as the first stepping stone. Lord Carter clearly concurs with this view, stating his reasoning for the 2Mbps limit is based on “current consumer expectations, the growing importance of video and increasing multiple use in the home.” He continues “At 2Mbps, all homes should be able to fully benefit from the most basic range of applications, services and opportunities offered by broadband.”

By 2012 those “basic applications” will have evolved and require even faster speeds and consumer expectations will have increased to demand more than basic applications from their broadband service. Businesses’ and consumers’ Internet usage habits are changing rapidly as new technologies become available. Where once the Internet was used for shopping and email now we watch TV, download movies and music and make IP based calls, or exchange more and more voice and data packets between offices and individuals. Such activities require faster and more reliable broadband and as the technology develops further this is set to continue. Clearly, customers only able to receive the minimum 2Mbps will still be left behind.

BT’s Chief Executive Ian Livingstone recently came out to defend a decision not to provide speeds of up to 100Mbps to homes using FTTH, arguing the demand is not there at the moment and that there are not enough applications that need such speeds. 100Mbps may be a little excessive for current applications but, with the current trends it won’t take long to get to the stage where we do require speeds of up to 100Mbps for the applications consumers and businesses want or need to use. By 2012 2Mbps is more than likely to be insufficient for the majority of users and so we will require a new USC and the cycle will start all over again. This will in any event become necessary in the not too distant future. The Digital Britain report says that soon businesses won’t be able to operate effectively without ‘high-bandwidth access to the Internet’. It goes on to say that, as a consequence of Internet traffic doubling every 21 months, next generation broadband access scalable to 1Gbps is required. Unfortunately the report simply states the obvious requirement, without recommendation, that this will require a reduction in the costs of deployment and the creation of a commercial environment that accelerates return on investment. We’re keen to know how Government aims to control those expenses!

In our view, although the USC will go some way towards helping the UK extremities and current ‘notspots’ finally receive some degree of a broadband service, it’s highly unlikely to completely solve Britain’s digital divide. Technologies such as FTTC will inevitably bring higher access speeds to more towns and villages than before but for those households and businesses remaining ‘in the sticks’, fixed line access will struggle to deliver a better experience. These customers will need to rely on the alternative delivery platforms such as wireless, mobile and satellite.

As always the root of the problem comes down to money. It is and always will be more economically viable to provide the higher quality, faster broadband services in urban areas where return on investment is higher. This means urban areas will almost always receive next generation services first and usually at cheaper prices.

The report attempts to tackle this issue by outlining plans to encourage faster deployment of Next Generation Access (NGA) using fibre, with an aim of providing 90% of the UK with such access by 2017 and 50% by 2012. The detail behind applying a 50p per month levy on all fixed telephone lines (and presumably cable-provided telephone services) has yet to be understood. In the meantime BT is only just beginning FTTC trials (Entanet is actively involved in these) and there’s no clear indication at present of full blown rollout timescales. Again, while creative thinking around encouraging next generation access is a positive step forward, it will be interesting to see how businesses and consumers react to being asked to pay for it by such means.

Although this article is concerned with addressing the digital divide, referencing the Digital Britain report without mentioning copyright infringement would be remiss. After all, the need for higher speed and bandwidth capability is driven to a large degree by content delivery. Again the detail behind Government’s desires and expectations to protect rights holders and act against alleged offenders needs to be expanded upon. On the surface Government wants ISPs to tackle alleged offenders and aid targeted legal action by keeping records on them. This is nothing new to Entanet—we already take action on all incidences brought to our attention by rights holders and advise those identified to curtail their activities or face the consequence of having their Entanet connection blocked. While we’ll continue to do this, we are equally keen to understand further how the regulator might wish ISPs to work together to reduce such activity.

The problem isn’t limited only to P2P file sharing as the report sets out though. We’re all fully aware of the significance of Usenet groups in distributing material. Various (often costly) technologies may indeed enable ISPs to control access and identify the sources of file sharing but to require them to inspect packets is a completely different game. We don’t believe placing the responsibility on the access provider is the answer. Rather, we think the time has come (and is indeed long overdue) for rights owners to review their business models to take into account how they can maximise availability to the market while protecting their copyright and profiting from it.

Having Government-led objectives and strategies to bring better access to all is laudable and good news for ISPs. However, we believe there needs to be much greater understanding of what customers require and how it can be economically delivered. Perhaps playing catch up is an inevitable burden for those in rural areas given our geographic diversity. Let’s face it, it’s never going to be easy to get high speed connectivity to the Outer Hebrides. If only we could be more like Japan! (link). Meanwhile, addressing copyright abuse outright will require an entirely more comprehensive approach in which those holding the copyright need to take greater responsibility and consider how they need to change.

Further reading

By Jon Farmer, Voice Technical Lead, Entanet International Ltd

Jon Farmer contributes to Entanet’s Opinion Blog here.

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