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Point Topic Backs Smaller ISPs to Fix UK Rural Superfast Broadband Woes

Posted Monday, December 9th, 2013 (3:47 am) by Mark Jackson (Score 1,132)
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London-based broadband analyst firm Point Topic has told ISPreview.co.uk, as part of our exclusive interview, that hybrid fibre optic (FTTC, DOCSIS etc.) services are the best way of getting affordable superfast Internet access to 95% of the country by 2017 and that smaller (altnets) ISPs should play a “major role” in connecting the final 5%.

According to the influential firm, which was first established in 1998 and whose data is now used by governments and industry right across Europe, the general public would much rather gain access to a superfast connection (30Mbps+) now that could be upgraded later than wait until the 2020’s for a pure ultrafast fibre optic (FTTH/P) solution due to significant budget problems.

But Point Topic acknowledged that “in the long term a direct transfer to an end-to-end fibre solution would be cheaper“. The firm also offered us some useful insights into Europe’s less than impressed opinion of the UK government’s broadband policy and suggested that altnets should play a “major role” in helping to connect “remote areas with low population density“, which they said have the ability to make “the best use of local conditions to run fibre – or possibly a wireless connection“.

Please take note that the following interview is comprised of remarks from Point Topic’s Chief Executive, Oliver Johnson and their Director of Operations, Laura Kell. The firms other Director, Tim Johnson, also helped out.

The Interview

Q1. The government’s Broadband Delivery UK office recently confirmed that its original target, which aimed to make fixed line superfast broadband (25-30Mbps+) services available to 90% of the country by the end of 2015, would be missed; albeit only by a couple of percentage points.

General administrative slowness, legal challenges from BT/Virgin Media and complex competition delays with EU approval are often listed as being among the key reasons for this hold-up. What are your thoughts on these delays and how significant are they for the overall project?

ANSWER:

Gossip in Brussels can be scathing about how the UK managed the EU approval issues. This undoubtedly caused delay and uncertainty for BDUK. Are our civil servants really so slow to learn how Brussels works or were they under instruction not to be too Euro-friendly?

The primary difficulty, although not often overtly referred to, was satisfying the conditions on state aid being used to support/fund one particular organisation. Caught in a way between a rock and a hard place the UK has on the one hand to try and deploy and manage a network which is usually most efficient when centrally managed versus producing a competitive enough market to comply with EU regulation. The fact that Fujitsu, that had been blacklisted from further government projects following delivery issues with a number of implementations, was the only other serious option for widespread deployment in the UK meant a level of scepticism in the commission that the UK failed to address quickly enough. The DCMS tied itself in knots trying to come up with a framework that allowed state intervention and in the process compromised the efficiency of allocations and ultimately deployment.

Coupled with a lack of open information, where BT quite properly in the eyes of its shareholders and management try to protect their competitive advantages, meant that many potential bidders were discouraged when they were unable to generate solid business plans and we were left with a lengthy process that resulted in an outcome that could have been achieved more straightforwardly.

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9 Responses
  1. MikeW

    A set of thought-provoking answers to those (equally good) questions. Thanks Mark & PT.

  2. MikeW

    I like their thought of a flat-rate subsidy per property for the final 5%, which would likely stimulate a few projects for the likes of Gigaclear. Perhaps even a few more B4RN-like community efforts would be kicked off too.

    That last 5%represents more than a million premises, which means the proposed subsidy would be getting on for £2bn – more than the public subsidy for BDUK 1, which covers 23% (or over 6 million premises), and probably matches the combined total for BDUK 1+2, which covers 28% or around 7.5 million properties.

    That kind of money would be very attractive to BT, presumably. But how do you go about ensuring a competitive tender while stopping BT and ensuring the money goes to a small altnet?

    • TheFacts

      Why should you want to stop BT or any other company? And so prevent TalkTalk, Sky etc. offering products.

      Or follow the Selling example…

    • gerarda

      I have no issue with BT tendering for the final 5%, as long as the tender is awarded on provable ability to deliver. We need to avoid a repeat of the present situation where they were awarded contacts to provide a minimum 2mb service without specifying how they were going to achieve that, and with apparently still no solution in sight.

  3. dragoneast

    Didn’t the Welsh Assembly try the route of a per connection subsidy and, mysteriously, a few altnets appeared with a connection fee some nominal sum short of the subsidy? I agree though that we in the UK seem to have developed this habit of making everything horrendously complicated.

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