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Analyst Insights Ovum: Analyst view: The Lords Select Committee report on Communications
Jul 31, 2012 – Metthew Howett 

“For a long time it was joked that the UK was on a “low-fiber diet” and that the government’s broadband policy represented a “poverty of ambition for a digital Britain”. Today a report from the House of Lords Select Committee on Communications adds to these cries and calls on the government to set out an even bolder vision for broadband policy than is currently being followed. However, with nearly 50 recommendations and no indication of costs or how they should be met, it is likely to be dismissed as little more than a pipe dream.

“The report combines a good narrative of how the UK ended up where it is with some questionable recommendations and ultimately a solution that has already been dismissed as unworkable. It rightly criticizes the vague ambition set out by the government to “have the best superfast broadband in Europe by 2015”, and calls for more clarity on speeds. As ISPs themselves are increasingly criticized for the advertising of misleading speeds, it seems only right that the government is clearer when outlining its ambitions.

“It is also welcomed that the obsession should not just be on the availability of products with certain speeds, but also the number of people using them. Despite 60% of UK households having access to superfast speeds, just over 6% are currently using them. Any government-led strategy should think about the poetry as well as the plumbing.

“There are aspects of the report that will strike many as simply odd. Some recommendations appear to ignore the fact that access to BT’s network (both copper and fiber) is already available on equivalent and non-discriminatory terms and that winners of government funding must provide open wholesale access to their networks. It also criticizes the government for giving time for market forces to play out. While this is most likely by accident rather than design, it has shown that the private sector is still willing and able to roll out next-generation broadband services to parts of the country that were originally thought of as underserved.

“The report is also noteworthy for its inconsistencies. Despite criticizing the government for dismissing technologies such as white space, it fails to make almost any mention of how mobile might contribute to bringing broadband to all areas of the UK. The only recommendation included is that all existing spectrum should be handed over to mobile operators and current TV traffic moves over to IP – with seemingly no consideration of the consequence this would have on bandwidth demands or incentives to invest in the network.

“There are certainly things that the government could and should be doing that it is not currently. The importance of mobile as an affordable option to reach some areas of the UK should not be forgotten and the House of Lords rightly recommends that Ofcom should foster the use of other communications providers’ infrastructure. To achieve the former, policy-makers should consider the possibility of mobile operators using existing passive infrastructure for backhauling mobile. To address the later, it should extend the duct access obligation currently on BT to other communications providers. There are also many other barriers faced by network operators, such as those relating to street works, that need desperate reform and which promisingly might now get looked at.

“More generally, in recent years there seems to have become an increasing disconnect between the government and regulator on policy aims and objectives. The most striking example is the long-awaited award of spectrum for 4G mobile services. At times the regulator seemed to lack a basic understanding of what operators were likely to do with the spectrum and failed to design an auction accordingly. Similarly the government seems to have ignored warnings that the UK risks slipping behind unless the currently planned auction stays on track. With well-targeted intervention the government could make the difference it wants to. At the moment it seems unsure just exactly what it should be doing.”



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