Microsoft and Estate Agents Bash Slow UK Broadband Speeds and HS2

Microsoft and a variety of Estate Agents have this week criticised the poor performance of broadband in rural parts of the United Kingdom. At the same time the software giant also warned that spending £42.6bn on the High Speed Two (HS2) railway link instead of super-fast Internet connectivity is a “strategic mistake“.

According to Microsoft’s Chief Technology Officer (CTO) for Europe, Stephen McGibbon, the Government should be doing more to support remote working by putting more investment into broadband instead of expensive new train routes (Computer Weekly). McGibbon was speaking at a Westminster eForum event this week.

Stephen McGibbon said:

“The one negative fact about the future is the current and previous governments think we need to build railways instead of broadband infrastructure and networks. HS2 is an example of how [government support] is not sufficient.. as all it will do is move jobs into London more and reinforce [the existing model]. I think it is a strategic mistake.”

The HS2 project would build a new high-speed rail link between the midlands and northern England by 2032. But Microsoft is by no means alone in thinking that the money might be better spent on improving and possibly future proofing broadband connectivity to 100% of the population.

A recent report from an independent think tank (here) suggested that HS2 should be scrapped and that £5.5 billion of the planned investment could then go towards rolling out “ultrafast to-the-door” broadband coverage across the United Kingdom (note: they’d probably need at least four times that to do FTTH).

Most recently several members of the Treasury Committee have claimed that there are “serious shortcomings” in the current cost-benefit analysis for HS2. Earlier this year it was estimated to cost £33bn and now some expect this to hit £50bn. Meanwhile several campaign groups, including an alliance of 10 Local Authorities, are next week due to have their objections heard by the Supreme Court.

But it’s not all about trains and another report has reflected similar concerns from rural Estate Agent group Prime Purchase, which believes that not enough is being done to make superfast broadband available to rural areas.

Frank Speir, Director of Prime Purchase, said:

“Slow broadband speeds are having a definite effect on the market. It’s becoming a much bigger issue. If the house sits between villages, it’s likely to be at the end of a telephone exchange with a very slow connection.

Sometimes people can buy Sky and get a satellite connection, but if you’re at the bottom of a valley and there are leaves on the trees it won’t work. It’s not an issue about price, it’s simply that I have to advise clients against making a purchase.”

However, ignoring the fact that Sky doesn’t actually do Satellite Internet connectivity (only TV via sat and broadband via fixed lines), it should be said that Prime Purchase tends to focus on more upmarket homes; the kind of people who would have enough money to install their own dedicated connection or maybe FTTP-on-Demand if it was available to them. Never the less their general point is fair.

On the other hand the Government, for all the criticism about their BT-only approach to the Broadband Delivery UK (BDUK) project, is in fairness managing to make a comparatively small pot of cash (around £1.2bn) go quite a long way. The current aim is to reach 95% of the population by 2017 and despite some delays the scheme is now making progress. It should bring superfast broadband to around 88% by the end of 2015 before achieving the original goal of 90% during early 2016 and then onwards to 95%.

At the same time separate commercial investment has been helping to upgrade areas to superfast broadband for the best part of the last 3-4 years and to many those benefits are now becoming more obvious, which is often reflected by reports from Ofcom and other groups.

But admittedly this will offer little comfort to the many that have yet to see any real improvement, especially people who live in the countryside; the last on the list to benefit. Similarly there are concerns that the current approach is not as future proof as it perhaps could be (hybrid fibre FTTC instead of true fibre FTTH) and might require further public money in the future.