The Lords have issued a wake-up call to those living in a field of broadband dreams

This is a guest post from Rob Gallagher, Principal Analyst, Head of TV & Broadband Research, Informa Telecoms & Media.

The House of Lords call for the UK government to prioritise equal broadband access for all over superfast speeds for a slim majority should be a wake-up call to policymakers all over the globe.

For several years, Informa Telecoms & Media has warned that certain quarters’ growing obsession over Mbps risks obscuring the wider debate about how governments and regulators can foster a broadband market that truly benefits all of society.

In short, politicians’ fears that the UK will somehow be “left behind” by nations with networks capable of delivering speeds of 100Mbps or more, such as Japan and South Korea, have eclipsed the very real problem of those served poorly – or not at all – by the free market for broadband services.

The major flaw in their thinking is that no one really knows exactly how superfast speeds will benefit nations and citizens. Despite the fact that well over a hundred million homes are now subscribed to next-generation services, no applications that truly require the speeds only these new networks can provide have emerged.

The counter-argument is that such applications will undoubtedly emerge, much as those that take advantage of ever-growing home computer power have. Or at the very least, people will begin streaming more video, download more games and use more existing applications at the same time. Build it and they will come, if you will.

Leaving aside the questionable wisdom of basing a multi-billion dollar critical infrastructure on a notion that was widely popularised by a movie about a man who hears voices telling him to build a baseball pitch, there is yet another flaw in this part of argument.

Our research has shown that there’s much more to fostering an Internet market than just bandwidth, such as the vibrancy of local content markets and cultural factors. For example, the average Internet user in the UK generates nearly a third more Internet traffic than their counterparts in Japan, despite the fact that tens of millions of homes in Japan are subscribed to 100Mbps services.

In other words, build it and they won’t necessarily come.

As such, ensuring equality of access seems a much more laudable goal than competing in meaningless global contest based on Mbps alone. While average Internet usage in the UK is above those of a number of its peers, you can be sure it’s much lower for those poorly served by broadband today. The UK government’s current policy risks translating and even widening this gap to a next-generation world.

Whether the Lords’ counter-proposals are workable is another matter. The report proposes one single strategy for investment in open access “middle mile” hubs for the whole of the country, as opposed to today’s plan to rely on BT to deliver next-generation “last mile” networks to the first two-thirds of households and a mix of public/private partnership for the final third.

Various models similar to the Lords’ proposals exist, but are either unproven, struggling, or would not easily translate to the UK market. In addition, BT looks increasingly likely to mop up any use any available public funds to extend its next-generation network to the final third, as we predicted before the funding was announced (corporate subscription required).

Don’t get me wrong – I’m not against innovation or challenging the status quo. We’ve identified – and analysed – a number of examples in markets worldwide. But nothing in the Lords’ report and the UK today changes our view that the market will continue on its current lines, ultimately resulting in a next-generation infrastructure largely owned and operated by the former state-owned monopoly, BT.

Rob Gallagher, Principal Analyst, Head of TV & Broadband Research, Informa Telecoms & Media will be speaking at the Broadband World Forum, taking place on the 16 – 18 October 2012 at the RAI Exhibition and Convention Centre, Amsterdam, the Netherlands. Click here now to register your interest.


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