Published:
22-Jun-09
The Government's 'Digital Britain' report proposes to alter the definition of the USC in the UK to include the ability for all homes to connect at a broadband speed of at least 2Mbit/s downstream by 2012. Currently the USC specifies only that narrowband internet access speeds be made available to households. In order to introduce the broadband coverage requirement, the government has been working to make the necessary amendments to the EU-wide Universal Service Directive under which national telecoms legislation is drawn up.
According to the report, 11% of UK phone lines, serving 2.75m premises, are unable to connect at 2Mbit/s. Reasons for this are listed as:
• Problematic in-home wiring (~1.9m homes)
• Random network effects (~0.3m homes)
• Excessively long phone line to local exchange (0.55m homes).
The report expects a mixture of in-home consumer solutions (e.g. filtered faceplates on master sockets, new wiring), and expanded or new fixed (DSL, FTTC) and wireless (mobile broadband, fixed wireless and satellite) networks to upgrade speeds:
• Home wiring problems resolved by market or consumer. Not government subsidised. ~0.8m homes.
• Home wiring problems resolved under USC. Subsidised. ~1.1m homes.
• Random network effects resolved by special investigation. Subsidised. ~0.1m homes.
• Long telephone line resolved by FTTC upgrade. Subsidised; could presumably draw on combination of sources, USC and separate Next Generation Fund (NGF), if required. ~0.42m homes.
• Random network effects and long lines resolved by wireless or satellite networks. Subsidised. ~0.33m homes.
The FTTC solution – which runs fibre to the street cabinet from the local exchange - is proposed for areas where sub-2Mbit/s homes are clustered. While pushing up the minimum speed of 0.42m of the 0.55m homes with excessively long phone lines, the report forecasts that in total 1.5m homes would benefit from speeds up to 40Mbit/s as a result of FTTC upgrades under the USC.
To fund the USC, a combined £200m is expected to be drawn from Digital Switchover Help Scheme underspend and the Strategic Investment Fund (SIF) announced in Budget 2009; the former source will only be available until 2012. Other financial support will come from private partners and public sector organisations.
As in Scotland and Northern Ireland, the government will let contracts in so-called "not-spots" (areas where consumers cannot connect at 2Mbit/s). Those homes currently unable to connect at broadband speeds (150kbit/s) will be prioritised. A new body, the 'Network Design and Procurement Group', will be set up and run separate from central government to oversee the tendering process.
Our take...
2Mbit/s broadband universal coverage should ensure more equality for broadband access, regardless of location or circumstance (e.g poor in-home wiring). Residents in urbanised areas (which offer the higher ROI for operators for rolling out) typically enjoy considerably faster speeds – the universal coverage commitment should lessen this gap. The commitment also acts as a stepping stone for the report's proposal for 90% next-generation access network (NGAN) coverage by 2017.
Nonetheless, users with the baseline speed of 2Mbit/s may still be limited in their ability to access certain bandwidth-intensive services, e.g. reliably streaming high definition video through BBC iPlayer. Further, issues such as peak time network congestion could reduce speeds below 2Mbit/s at certain times, making the use of some services more problematic. While the report alludes to the need for more symmetry between downstream and upstream speed and lower latency in connections, it does not mention specific parameters for these, or for other important components, such as contention ratio or specifications for backhaul capacity upgrades to avoid congestion at peak times.
There is also a notable absence of a specific maximum price for a 2Mbit/s connection. The French government, for example, has proposed broadband coverage to all the population by 2010 at a minimum of 0.5Mbit/s and a maximum cost of €35/month (inclusive of equipment).
Speed upgrades to ~0.42m homes with FTTC may be eligible for funding from the separate next-generation fund (the report is unclear on whether this would be possible). The cost of upgrading these homes alone will be £252m assuming around £600 per connected FTTC home (to connect a home costs over double the cost to pass a home). Other than FTTC network deployment, which will presumably be carried out by BT which owns the street cabinets, subsidised network expansion to cover those not able to connect at 2Mbit/s could involve:
• Extension of BT's ADSL network to those very remote areas where it is still to roll out. There are 28 local phone exchanges in UK (including Docklands Zone Two in London) whose local residents have no access to ADSL. In all but one of these areas, residents also have no access to cable broadband
• Extension of mobile broadband (e.g. Orange, 3, Vodafone), fixed wireless (e.g. NOW, LLT, On Communications) and satellite broadband networks (e.g. Eutelsat (via ISP Tariam), Avanti). Due to current technology limitations wireless solutions are unlikely to deliver 2Mbit/s throughput in the near term; by 2012, however, they may be able to deliver the required baseline speed through advances to the technology.
Leaving aside these ~0.42m homes upgraded by FTTC and the ~0.8m homes upgraded by consumers themselves or by market-driven network expansion, ~1.53m upgraded homes would be funded by the £200m (equivalent to £138 per home) plus any private and public sector contributions. It remains to be seen whether this will be sufficient to cover the subsidies for operators to expand ADSL or wireless networks, or for employing technicians in certain cases (e.g. for homes experiencing random network effects).
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