Ofcom Boss Queries Need For Superfast Broadband

The boss of Ofcom has questioned the need for superfast broadband in the UK, as he outlined the current state of broadband infrastructure in the UK.

Ofcom chief executive, Ed Richards used a speech at Total Telecom World, a gathering of global operators and telecom firms, to outline the situation in the UK, and describe how our carriers (mainly BT) are migrating customers from copper-based networks and onto superfast fibre optics.

He also pointed out how little, in comparative terms, it cost to rollout Britain’s copper based network.

Billions Needed

“For current generation broadband, the overall scale of investment was in the low hundreds of millions – important, but comparatively modest, capital expenditure,” said Richards(pictured). “The cost of building super-fast broadband networks by contrast will be several billion in order to reach a good majority of the population – with many more billions to take coverage to what many regard as the logical conclusion of near universal fibre to the premise.”

He pointed to the fact that BT’s £2.5 billion fibre will only reach two thirds of the UK, and that the government plans to invest £530 million is to ensure superfast broadband coverage is extended to as much of the country as possible.

This extra £530 million, coupled with “additional local funding and commercial investment”, should extend NGA coverage to 90 percent of the population. He said that the final 10 percent of the UK would need a “creative mix of technologies” to deliver superfast broadband. This could include using the spectrum that will be sold off in the delayed 4G auction.

Competition Issues

Richards stressed that it was Ofcom’s policy to encourage competition, and that open access “must be provided as part of any publicly financed initiative, together with interoperable standard systems which maximise the potential for effective downstream competition”.

“The danger otherwise is that we end up with single, vertically-integrated providers in a range of areas, and an absence of choice, innovation and competition,” he warned.

“This would be a particularly egregious outcome if delivered by virtue of taxpayers’ money rather than private risk capital,” he said.

In an effort to prevent any operator lock-in for the new fibre lines, Ofcom is adopting a position known as virtual line unbundled access (VULA), which will allow other operators to use BT’s new fibre networks, between the end user and the local exchange, “so that they can compete in the supply of downstream superfast services”.

Fibre’s “Killer App”?

Richards speech will have also raised a few eyebrows, as he seemed to dismiss the need for superfast braodband in the UK, hinting there was very little need for it at the moment. This came when Richards suggested that only households that would use superfast broadband, were those homes with teenagers (Mum and Dad watching TV, while the kids watch contentedly online upstairs).

“Amid a cornucopia of entertainment and information services, and the promise of advanced telemetry, e-health and interactive education, it is interesting that the only ‘killer app’ we have so far is the presence of teenage children,” said Richards.

“Social networking, streaming and sharing from the teenage bedroom, leading to local contention – the victim of which is the person typically paying the bill – seems to be among the strongest reasons for adopting superfast broadband,” he said.

Questions Remain

To his critics, Richards failed to address some of the real issues facing a rollout of superfast broadband into rural areas.

The government’s £530m is actually a fairly paltry sum in this context, especially when it is remembered that BT (a commercial entity) is actually investing into fibre £2.5 billion from its own pockets. Virgin Media meanwhile is thought to have invested £12 billion-plus into its fibre network over the years.

The idea therefore that this £530 million, coupled with the loosely defined “additional local funding and commercial investment”, will be enough to reach 90 percent of the UK, seems somewhat optimistic.

In reality, it is likely that BT will win the lion’s share of the government’s investment for rural broadband rollout, meaning that BT will be the only provider of fibre connections into rural areas, much to the chagrin of others such as Virgin Media. Unless, of course, Fujitsu decides to back its grandiose claims, made in April, of creating a 1Gbps rural fibre network with some real facts and figures.