How Will The Government Deliver 10Mbps Broadband For Every Business?

The Queen’s Speech detailed a new Digital Economy Bill that would give every home and business in the UK the right to demand broadband speeds of at least 10Mbps for the first time.

At present, every property in the UK can receive at least 2Mbps, with 96 percent of the UK population expected to be covered with superfast broadband at 2017. But the current minimum standard is dictated by Broadband Delivery UK (BDUK) contract with local authorities rather than any legal instrument.

The current USO only covers a telephone service, reasonable geographic access to public call boxes and directory enquiry services as well as the vague promise of a “functional internet access” with an unspecified speed.

The plans are currently under consultation but what form will the new USO take, how will it be paid for and how will it be delivered?

How will it be funded?

“We don’t know how [the USO] going to work, be funded or what it’s going to do,” Mike Conradi, partner at law firm DLA Piper, told a Westminster eForum.

Conradi is most concerned with the issue of funding and the level of subsidy, if any, that will be offered by government. BDUK is supply led with providers having to work out the amount of money they would need in advance on the basis they would assume the burden of delivery.

The USO will be demand-led, meaning the cost of connection would have to be recovered once the work is completed, increasing the exposure of the taxpayer. Not that Conradi thinks a subsidy is forthcoming.

“In this current era of austerity it is unlikely the subsidy will be taxpayer funded,” continued Conradi. “The alternative is some sort of industry levy.”

But is this fair? After all the revenue generated from a slightly faster line might not be of significant commercial value to BT, but it might be for an over-the-top player. And given the trend towards bundled services and combined bills, Conradi pondered how the government would determine which revenue was taxable.

“How do you decide who would benefit from 2Mbps to 10Mbps?” he asked. “We know the most popular apps are Facebook, Netflix and YouTube. They won’t be forced to pay yet will likely benefit the most.”

It goes without saying that the idea of a broadband levy would be extremely unpopular with communications providers that want the government to show more restraint and ease regulation.

“We further support the principle of universal broadband, but there remain a number questions surrounding the USO that still need to be addressed, including funding and the impact on the market, so that the benefits of broadband can be felt as widely and effectively as possible,” said the Internet Service Providers Association.

What technologies will be used?

BT CEO Gavin Patterson has said the company would support a 10Mbps USO, alongside its promised investments in fibre to the premise (FTTP) and G.Fast. By far and away the greatest beneficiary of the BDUK programme, it is also willing to extend superfast coverage beyond the 95 percent target if more funding was made available.

However it is clear that conventional fibre technologies and G.Fast will not be used to cover the ‘final five percent’.

At a recent roundtable, Openreach CEO Clive Selley told journalists he believed a mix of technologies would help deliver 10Mbps, such as satellite, long range VDSL and fixed wireless.

Virgin Media opposes further government subsidy and has thrown its weight behind the use of satellite, not least because this would ensure none of its fixed rivals would benefit, and BDUK CEO Chris Townsend, a former employee of Sky, is also keen.

“We have a lot of faith in this technology,” he said, citing trials of ‘alternative’ technologies as evidence of its potential. “There are a lot of myths about satellite but we’ve proved it’s capable with our pilots.

“In my view, it’s early days with satellite technology. We’re looking at the detail and the new technology available in the next year or so. We think the opportunity is there to work more closely with the satellite providers.”

Is it fast enough?

Of course, given the rest of the country will be enjoying anything between 24Mbps and 1Gbps, the debate about whether 10Mbps is fast enough rumbles on. BT seems to think 10Mbps is reasonable as a minimum standard.

“To put it into context, 10Mbps is a good speed,” said Julian Ashworth, BT’s director of policy. “The next highest is Malta with 4Mbps. [10Mbps] can give you HD video, Skype etc. – everything you need as a universal service.”

However, what is considered ‘adequate’ today will not be in five or ten years’ time. The USO consultation has made it clear that the proposed legislation would have two components: one enshrining the principle in law and another legal mechanism that would allow it to be increased in the future.

Unless futureproof technologies are used to deliver the USO, connections could become insufficient within a decade and more money would have to be pumped into projects to repeat the cycle. Surely it makes sense for BT, or whoever is responsible, to plan beyond 10Mbps.

For example, satellite is already used to deliver the current 2Mbps benchmark. A number of schemes hand out vouchers to homes and businesses for the installation of satellite broadband. However many satellite services offer superfast speeds – even if latency restricts the use of some applications.

“If you have a 10Mbps USO, you would want to have a different USO by 2030,” Selley said in response to a question from TechWeekEurope. “We have to be very mindful of the upgradability of it.

“Most lines in long range VDSL went way above 10Mbps [in tests]. I’m looking for solutions that would [push it further].”

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