Yearly Archives - 2009

30 Apr 2009

Broadband in the time of swine flu

In a deep global recession the last thing the world needs is a new economic shock, but that seems to be exactly what we are facing. The World Health Organisation raised its flu pandemic alert level to 5 yesterday and governments around the world are stocking up on anti-viral drugs and face masks, however, broadband could prove to be just as important in helping the UK to cope with a flu pandemic.

In what turned out to be a highly prescient piece of work, the BSG explored the role of broadband in a global pandemic in its 2008 report on the value of next generation broadband to the UK. Broadband didn’t exist when the UK was last hit by a flu pandemic but its near universal availability today could prove vital in ensuring that the economy keeps going in the event of large numbers of people falling ill.

Many large organisations will already have flu pandemic contingency plans in place but almost all organisations should be thinking about how they could use broadband to help them cope with the disruption that could result if the flu virus really does take gripe in the UK.

The advice from government, if you notice symptoms, is to stay at home and call the NHS for advice. However, it is not only those who are sick who are likely to be staying at home. In an effort to reduce the spread of the virus through their staff, many companies will be recommending that employees avoid crowded offices and public transport and work remotely from home instead.

This should help many companies maintain a continuity of service but will also have an additional benefit of reducing the pressure on public transport systems, which will themselves face severe disruption as key staff fall ill.

Remote presence provides all sorts of options and flexibility for coping with a pandemic which may well require draconian social distancing measures to be put in place.

For instance, while many school children and no doubt some teachers will relish the thought of schools being closed, remote learning could be implemented so that children continue to be educated, even while school buildings are closed. Remote diagnosis and support could alleviate some of the pressure on the health service, while preventing the spread of the virus through facilitating treatment in the home (and avoiding infecting our invaluable healthcare professionals).

The 2008 BSG report went as far as trying to calculate the economic value that broadband would offer in a pandemic. Essentially we estimated that, based on the probability of a pandemic, a given mortality rate, the economic value of a life, and assuming next generation broadband could reduce the mortality rate by 5% by enabling more social distancing measures, the annual benefit in terms of avoided deaths would be £200m.

The role that broadband could play in the event of this pandemic becoming a reality should highlight to government the importance of ensuring everyone is connected – a ubiquitous broadband society has far more tools to deal with the pandemic threat than an equivalent less-connected society.

More than this, however, it should highlight the importance to government of ensuring their own services make full use of broadband and have the flexibility to continue to function and support society as events, such as pandemics, unfold.

Peter Shearman, Policy Manager, BSG

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23 Apr 2009

Broadband in the Budget

In yesterday’s Budget, Alastair Darling stated government’s support for the knowledge economy and the communications sector, and set out a number of policies affecting the broadband industry. Broadly, the top-line statements were as follows.

– Government re-iterates its support for the broadband universal service commitment set out in the Digital Britain Interim Report; will consult on using Digital Switchover Help Scheme underspend to fund the policy.

– Government will review the powers and duties of Ofcom “in advance of the Digital Britain Report” so that it can “strike the right balance between delivering competition and encouraging investment”.

– Government’s doubling of the capital cost allowances to 40% could aid up to £10bn on investment in communications infrastructure.

– Government has approved the South Yorkshire Digital Region next generation broadband project.

The BSG has published its response to these measures. While we support the government’s commitment to the broadband universal service commitment, we are concerned that the proposals set out on next generation broadband will not support more widespread investment and coverage than current market commitments.

It is not clear that the one year capital cost allowances increase, while providing a useful stimulus for existing investment commitment, will incentivise next generation broadband deployment given the timescales of investment and deployment, which will take many years (although it may have some limited impact in incentivising Virgin Media to invest, who are planning small expansions to their footprint over the next year).

More importantly, the characteristics of the costs of deployment mean that specific, targeted measures are required in areas where market-led deployment will not reach, rather than a blanket subsidy across all areas including those that are already commercially viable.

However, a potentially more significant development is the review of Ofcom’s powers and duties. Essentially, this would appear to come down to re-focusing Ofcom more towards promoting investment, as opposed to promoting competition. While not necessarily opposing principles (stronger competition should spur investment), there is certainly a balance to be struck, particularly given the scale of the investment required for next generation broadband.

This reflects an issue the BSG raised in January 2004 in its 3rd Annual Report (pp116-121). There was a concern then that the focus on short-term consumer interest could drive static efficiency in the market, at the expense of the dynamic efficiencies of investment.

The announcement of this review could be a sign that this argument has found support amongst senior policymakers.

Peter Shearman, Policy Manager, BSG

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22 Apr 2009

BSG provides submission to Welsh Affairs Select Committee inquiry in to digital inclusion in Wales

The BSG today submitted a report to the Welsh Affairs Select Committee as part of their inquiry in to digital inclusion in Wales.

Focusing on broadband availability and take-up, including the prospects for next generation broadband, the report highlights the challenges facing Wales, owing to the low population density and high proportion of rural communities.

BSG submission to Welsh Affairs Select Committee

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22 Apr 2009

BSG response to the Budget

Timely investment in next generation broadband will provide platform for innovation and productivity growth

The BSG welcomes the recognition given to the importance to the UK’s communications infrastructure in today’s budget and the confirmation of the government’s intention to make basic broadband services universally available across the UK.

However, the BSG is concerned that the budget announcements on next generation broadband do not yet provide grounds for confidence that such services will be made available beyond urban areas. The full benefits of next generation broadband will only be achieved through a combination of widespread availability and adoption.

Delivering the Universal Service Commitment

  • The BSG welcomes the confirmation of the government’s intention to implement the Universal Service Commitment for broadband and the suggestion that this could be part funded through the underspend from the Digital Switchover Help Scheme.
  • The BSG also welcomes the commitment to support the improvement of basic digital skills and the promotion of broadband take-up. Achieving the universal availability and take up of broadband is not only a matter of social equity but is also a necessary pre-condition for the eventual switch off of analogue public services which is the only way to ensure better and more affordable public service delivery in the future.

Next generation broadband

  • The BSG welcomes the doubling of capital allowances which should help to bring forward investment. However, the BSG is concerned that this will not, in itself be sufficient to ensure the timely and widespread availability of next generation broadband.
  • The BSG will be looking to the final Digital Britain report for further measures to ensure that next generation broadband deployment meets the needs of the wider economy. This could include more support for projects like South Yorkshire Digital Region that was endorsed in the budget report today.

“The key is to find the intervention sweet spot, just enough but not too much???, said Antony Walker, Chief Executive of the Broadband Stakeholder Group.

“The aim should be to provide a sufficient nudge to the market that enables it to deploy more quickly and more extensively that it would do otherwise. The announcement on capital allowances may help to bring forward investment but does not address the challenge of extending availability beyond urban areas.???

Although difficult to quantify, there is a growing body of evidence [see notes below] to suggest that the long-term benefit to the UK economy of a measured and carefully targeted intervention could potentially significantly exceed the cost to government.

Today’s budget announcement comes almost exactly two years after the BSG first highlighted the need for action in its Pipe Dreams report on next generation broadband. The rapid deterioration of the UK economy means that the potential for market investment in low density areas has become further constrained.

Without additional action next generation broadband will be rolled out more slowly and less extensively, meaning that many rural areas will be left behind and the net economic benefit to the economy will be smaller and slower to emerge.

Explaining the significance of next generation broadband, Antony Walker said “This is really about the future potential for innovation and productivity growth right across the UK economy. Broadband is what economists call a general purpose technology that is relevant to almost every aspect of economic activity. It provides the potential for households, businesses and governments to do things differently, more effectively and more efficiently. And for some key parts of the economy, such as the creative industries, it will be the platform for transformative change that will open up a global market for entirely new products, services and applications.???

However, these benefits do not accrue automatically. The government will need to put as much effort into ensuring the rapid adoption and exploitation of these networks as it puts into ensuring their availability in the first place.

BSG response to Budget – full press release

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21 Apr 2009

BSG submits response to BBC Trust Canvas consultation

The BSG’s response to the BBC Trust consultation on the BBC’s Project Canvas proposals sets out the potential and significant impact this proposal could have across the broadband value chain.

Depending on how the proposal is taken forward in practice, it could have various implications, such as heightened pressure on broadband networks from increased levels of video traffic, to how Canvas could drive demand for higher quality broadband services and how such a UK centric development could affect global manufacturers of set-top boxes.

Central to the BSG response is the view that the BBC Trust needs to view the Canvas proposal in the wider context of an industry making the gradual and difficult transition to next generation broadband.

Furthermore, it is essential that this consultation is the beginning of the debate rather than a one-off and final assessment of the proposal.

Detailed, open and ongoing discussion across the value chain is vital to effectively assess a proposal that has such far-ranging relevance for the UK broadband value chain.

BSG response to BBC Trust consultation on Project Canvas

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07 Apr 2009

Australia dumps FTTN proposal – and starts again with FTTH

In an extraordinary announcement this morning, the Australian government have announced that they will spend up to A$43bn ($31bn, £21bn) on a new National Broadband Network, providing FTTH to 90% of Australian premises. The final 10% will be served using wireless technologies, capable of 12Mbps.

This scheme replaces the original FTTN project that the government had been developing since coming to power in late 2007. This plan, which had seen a number of bids submitted by industry, has been terminated. This was said to be partly due to the pressures brought by the global economic downturn on the value for money that Australian tax payers could achieve.

The Australian government will create a new company to carry out this project, in which it will be the majority shareholder. Private investment is anticipated. The new company will provide wholesale access (no retail services), and will be operated on a commercial basis. The government intends to sell down its stake in the company once the network has been constructed and operational for five years.

It is expected that the network will take 8 years to build and create 25,000 jobs. Some quick calculations suggest that the cost will be c£2,700 for each of Australia’s 7.8m households, although without more detail it is difficult to provide accurate costs per home passed or home connected.

Our cost modelling report suggested that providing point-to-point FTTH to 90% of UK households would cost about £21bn – about the same cost of the Australian proposal, but covering 22.5m homes, rather than Australia’s 7.7m.

This difference could be explained through the quite different geography and population density in Australia, and the fact that the network would presumably be an overlay to the existing network that didn’t make use of existing assets. However, the cost still appears on the high side.

The announcement has been welcomed by both the incumbent Telstra and its competitors. However, there are sure to be many challenging debates that will need to be held. The telecoms landscape in Australia is likely to change significantly as a result of this project and the regulatory reforms announced alongside the FTTH investment.

As before with the FTTN proposal, this is only the beginning of a process that has many hurdles to clear yet.

Peter Shearman, Policy Manager, BSG

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13 Mar 2009

One Year On – the Good Practice Principles on Audiovisual Content Information

The BSG today published the ‘Good Practice Principles on Audiovisual Content Information – One Year on’.

Last year the BSG facilitated the creation and publication of the Audiovisual Content Information Good Practice Principles. The principles committed signatories to providing clear, consistent information about audiovisual content, in order to ensure that consumers are able to make informed choices about commercially provided content.

This paper has been published one year following the launch, to give an update on how the principles have worked in practice. This includes how the signatories are working to meet the principles, and also includes information from three new signatories to the principles: BSkyB, MySpace and Tiscali.

Good Practice Principles on Audiovisual Content Information – One Year On

Good Practice Principles on Audiovisual Content Information

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12 Mar 2009

BSG submits response to interim Digital Britain Report

The BSG today finalised its submission to the government’s interim Digital Britain Report.

The response recognises the ambition and rationale of the report, while noting the challenging timescales. It goes on to highlight a number of challenges and issues facing developments in each of the areas of the report, and makes a number of suggestions as to how to address the actions raised.

BSG response to interim Digital Britain Report

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11 Mar 2009

Andy calls time on product placement….?

Somewhat behind original timelines, the government has today given further indication of how it will proceed with implementing the Audiovisual Media Services Directive into UK law.

Today has seen the publication of a press release, Ministerial Statement from Andy Burnham, and a document giving an overview of responses to the original consultation.

An initial glance (so forgive me if a more detailed read thows up further information) shows that whilst the main thrust of the government approach is made clear, there is still a long way to go on the detail.

Today’s documents state that the government wishes to apply the Directive only to those “mass media services whose principal purpose is to provide television programming to the public on demand.”

The scope of services that will be captured by the Directive has been one of ongoing concern and where clarity is urgently required – as stated strongly in the BSG’s response to the AVMS consultation.

As ever the devil will be in the detail. Watch this space for details of the Statutory Instruments that will carry this into UK law….

What is clear however is that the Culture Secretary has not shifted from his initial view on product placement (something that the Directive allows Member States to permit, should they wish).

The title of the press release perhaps gives it away: “preserving standards will be cornerstone of UK media services”.

This release then goes on to say that “mindful of the need to maintain public trust in television broadcasters and British television’s reputation for high standards” that the government has decided to go with the status quo and continue to prohibit product placement.

What is interesting however, is that the release also clarifies that product placement will continue to be allowed in films and overseas programmes (which we knew) but also in programmes made by and for UK Video on Demand (VoD) services.

And VoD services are described as “TV-like” in the Directive……..

Now, these are just questions rather than a statement of view at this point:, but:

– Is the government response to a policy development that is trying to regulate for a converged media world, actually then drawing distinctions between how broadcast and on-demand TV should operate and be funded?
– Will that become an irrelevance to the consumer as people become used to accessing TV-like content on the mix between their mobile phone, TV and computer and also a mix between real-time and on-demand?

Such questions aside, the line drawn in the sand here will come as a blow for ITV and others that have been pushing the case for product placement with the government.

It also prompts one to consider how this decision will impact on the development of the Digital Britain report, which gives considerable emphasis to possible measures to address the challenges for digital content.

Today’s announcement does say that the government will review its position in 2011/2 on the back of further research by Ofcom on product placement.

As other Members States take advantage of the opportunity to implement product placement however, the question is, will this timescale be too late?

Pamela Learmonth, Policy Manager, BSG

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08 Mar 2009

What is impacting on broadband speeds in the UK?

Last Thursday the BSG held a seminar with SamKnows, who were the technical partner on Ofcom’s Broadband Speeds 2008 report.

The seminar produced an interesting debate, with discussions ranging from issues of methodology and technical concerns, to the policy implications of the results generated in the report (James Enck at EuroTelcoblog has given his views on the evening).

One area that was of particular interest was the scatter graph (reproduced in the event handout) plotting line length versus average throughput speed. Although using straight line length (the straight line distance from a home to the exchange) rather than the actual line length, the level of variance in performance between lines of comparable length is pronounced.

We have commented before on this blog how difficult broadband is as a service to market, given the fact that the customer experience is to an extent out of the hands of the service provider.

Getting behind the reasons for this variance should be a central concern of policymakers and the industry alike. The causes of the variance could have important implications for the development of public and regulatory policymaking in this area. We wait to see what Ofcom’s second report on broadband speeds is able to say on this.

Peter Shearman, Policy Manager, BSG

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26 Feb 2009

Connectivity Scorecard 2009

Leonard Waverman, of the London Business School, recently published the Connectivity Scorecard 2009, a follow-up to a 2008 scorecard he produced.

The scorecard is one of the more comprehensive efforts to benchmark performance, given its global nature and its composite metrics that provide a more useful view of connectivity within a country. Interestingly, the US comes out on top, followed by the Scandinavian countries, the Netherlands, and, also interestingly, the UK.

The UK is able to rank highly because the index is based on usage and skills as well as infrastructure, with different scores and weighting for government, consumers and business. So, while we are behind in terms of consumer infrastructure development, we are ahead on usage, particularly by businesses.

We do, however, score fairly lowly on government infrastructure and usage, which will be of concern given Digital Britain’s focus on moving government services online, enabled by a broadband universal service commitment. A country report is available on the scorecard’s website.

The scorecard provides a more useful and holistic view of a country’s performance than other examples such as the OECD league tables, which are often based on one or two specific measures and normally based on infrastructure comparison, rather than usage and skills. However, as always with such an index, data quality can be an issue, and the range of sources available for measuring each country against a specific metric will be limited and vary in reliability.

In Pipe Dreams we called for international benchmarking of the UK’s broadband performance; the need for this was re-iterated by the Caio Review. This scorecard isn’t perfect, but is one of the best efforts out there. The approach should certainly be of interest to public and regulatory policymakers as the UK’s NGA debate continues.

Peter Shearman, Policy Manager, BSG

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13 Feb 2009

Creating the digital citizen of the future? Knowledge and confidence is key

The Government’s Digital Britain report rightly devotes a chapter to how you can “equip everyone to benefit??? from the digital future.

Whilst much of the commentary around the report has focused on infrastructure, broadband speeds and protection of copyright online, the important issue of how to drive take-up has been somewhat overlooked.

Such an oversight would be dangerous.

Without widespread take-up of broadband and the services which run over it, growth scenarios for the sector and the economy more widely will suffer.

Without tackling the various and often complicated reasons for people choosing not to get “online???, there is also the risk that a significant section of the population miss out on the opportunities that the digital future offers them.

Not a outcome that anyone would seek.

The Digital Britain report recognises that one of the reasons that people choose not to engage with digital technology is a lack of confidence.

The BSG agrees with this and believes that it is vital to resolve any consumer concerns and misgivings about how digital services work and their implications.

It may seem a self-evident point to make, but the provision of clear information about the nature of services can certainly go a long way to achieve this outcome.

This is the approach taken by the Good Practice Principles on Audiovisual Content Information, which were facilitated by the BSG. The Principles commit leading content players to give clear and easy to use information about commercial content that may be unsuitable to children and young people or cause more general offence, so that individuals can make informed choices about the content they want to access – whether online, on a mobile phone or through an on-demand TV service.

This week, leading social network providers across Europe committed to a set of principles to enhance the safety of children and young people using their services. These are to:

• Raise awareness of safety education messages and acceptable use policies
• Work towards ensuring that services are age-appropriate for the intended audience
• Empower users through tools and technology
• Provide easy-to-use mechanisms to report conduct or content that violates Terms of Service
• Respond to notifications of illegal content or conduct
• Enable and encourage users to employ a safe approach to personal information and privacy
• Assess the means for reviewing illegal or prohibited content/conduct

These principles embody existing practice of social network providers and further demonstrate the role that industry can play in giving the consumers the tools and confidence they need to engage with digital services in a safe and confident way.

As the final findings of Stephen Carter’s Digital Britain report are crafted, we hope it will conclude that in order to empower the digital citizen of the future, knowledge and confidence is key.

Pamela Learmonth, Policy Manager, BSG

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07 Feb 2009

Broadband v snow

Last Monday saw snow bring the majority of England to a standstill, and disrupted many businesses. But the ability to work from home remotely meant that the disruption for some was less than it otherwise might have been.

ISP PlusNet have produced data showing that the amount of VPN and other associated traffic on their network on Monday was double what it usually is, reflecting the amount of remote working taking place. While the FSB estimated that UK business lost up to £1bn in lost productivity, BT estimate that small businesses recovered £333m of that through flexible working arrangements.

Our work last year on the value of next generation broadband suggested that additional remote working opportunities would bring a variety of benefits to the economy and society – social benefits through better work-life balance and less need for travel; economic benefits in terms of increased productivity. We also included the benefits of remote working in disaster situations, such as flu pandemics.

However, we didn’t factor in snow. We might have to go back and revise our estimates if the cold snap continues.

Peter Shearman, Policy Manager, BSG

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29 Jan 2009

Digital Britain Interim Report launched

The government’s Digital Britain Interim Report has been launched. The press release is available here, and the report itself is available here. The BSG press release responding to the launch is available here.

We have produced an initial analysis of the report in a special edition of our newsletter. We are keen to hear the views and opinions of members of the BSG community, and anyone else with an interest in the broadband value chain, on the issues raised in the report.

If you have any views you wish to share please either comment on this blog or send us an email. We will pass on all views to the government’s Digital Britain team.

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