A week in broadband – net neutrality, content and competition

November 15, 2014 in Adrian's tech blog, Architecture & Technical, Public Policy by Adrian Wooster

Its been and interesting week to contrast the discussions and shifts in the broadband markets in the UK and the US.

In the US, the Net Neutrality debate is coming to a head as President Obama sharing his thoughts and with the FCC now considering how they might inject some additional layers of competition in an attempt to use market forces to avoid operators fiddling with customers traffic.

At the same time there are UK reports that  BT may be considering the scrapping their Wholesale division in favour of Openreach, reducing the separation between their infrastructure and the services that flow over it.

The timing of the latter reports couldn’t be better timed for the FCC’s deliberations.

In principle the UK has a market which creates a distinction between services and infrastructure; it is true the Europe doesn’t have the scale of problems the US has with net neutrality but our markets are certainly not in rude health.

To contrast the very different attitudes to net neutrality in Europe, its worth remembering that Eircom, the Irish incumbent was proud to advertise traffic fiddling, sorry shaped traffic, as a customer benefit offered at no extra cost to their valued customers!

Casting your mind back to the early dial-up days in the UK, there were innumerable ISP’s; many small, some large, and all with an individual, independent air about them. Remember Nildram? Pipex?

As the broadband market emerged there was significant market consolidation. Its possible, sensible even, to argue that this is a natural phase for any new market as it matures but today we have a very small clutch of vast service providers with a group of tiny, tenacious ISPs hanging onto a low single-digit percentage market share.

The UK’s flavour of net neutrality is less about meddling with content but with the content itself as BT and Sky wrangle over rights to sports with rugby fans currently the big losers.

The question the FCC needs to ask is “Why is this happening in the UK?”

Healthy markets rely on the participants’ abilities to differentiate and innovate. The ADSL broadband market was created such that the only significant differentiators were price and brand, and the only innovation was in the business model – the smartest way to give it away. Unchecked, this can only lead to the “pile it high, sell it cheap” environment with a small number of vast, lean organisations we have in the UK today. This isn’t a criticism of these organisations, either – they have been the most successful in coping with the market pressures.

The move to FttC (BT’s Infinity) has further impacted the scope for competition because its simply not commercially viable to deploy VDSL in competition to the incumbent with any scale. With no physical infrastructure unbundling there are no differentiators left apart from a brand associated with the content you permit over your service. This is the source of the inevitable and harmful battles over sporting rights with fans the biggest losers.

If the FCC are serious about using market forces to regulate net neutrality, they need to consider what the competition will be based on. A non-descript and narrow commodity market will result in a temporary pain relief and a diversion while the new service providers storm, form and then battle for content rights, taking the market full-circle but for more complex and expensive reasons; customers will increasingly become secondary as the competition becomes ever more concentrated and the battles ever more critical to the providers’ survival.

A US market will need to be created based on a set of products which can be combined to create a rich and diverse market, with ample scope for market players to innovate, and with sensible returns possible for all players in the market.

The UK doesn’t currently have this but if the FCC is smart it could start to lead the way if it learns from the UK experiment.

The fall-out for the UK?

If left unchecked, the trend suggests we should expect Sky to get more engaged in fibre infrastructure (they’ve just applied for code powers to dig up the roads) as BT gets more involved in content, and with BT preparing to use its 4G licence expect Vodafone to spend some of their considerable cash pile to get more interested in UK fixed broadband (Talktalk a target, perhaps?).

In other words, the links between content and delivery will grow stronger and the shape of competition more concentrated in the hands of an even smaller group of even bigger players with business models converging on Virgin Media’s (read: Comcast’s) cable model. And as this happens, expect Netflix, Google and Amazon to get more concerned about how their traffic is treated.

The UK’s trajectory is back to earth with a model not unlike the one the US is trying to escape.

Its your business to know your Open Market Review from your Public Consultation!

November 13, 2014 in Adrian's tech blog, Public Policy by Adrian Wooster

I’m starting to hear, again, some very confused and sometimes very wrong advice from within the telecoms industry regarding the flow of the state aid process and how it relates to existing network operators.

From the beginning, when an organisation – any organisation – wants to use public money to roll-out broadband it needs to go through a state aid process.

Even small investments, so-called ‘de minimis aid‘, need to go through this process although they may not have to notify the European Commission as the final step – de minimis aid is still aid and needs to obey the same rules as any other aid, it’s just considered too small to have a significant distorting impact on the market so the Commission doesn’t need to specifically rule on it.

For large interventions it’s considered very good practice to carry out an Open Market Review (OMR) and BDUK will typically insist on it. This is not a mandatory or even binding stage, and is simply used by the aid recipient to better understand the landscape in which they plan to intervene. The advice to existent network operators is that it is very helpful to reply to any OMRs that affect your but it is not absolutely “live or die” essential.

As pragmatic advice, I’d recommend that wireless operators specifically do consider submitting to OMRs as it can take longer to agree the coverage, especially for superfast NGA wireless networks. Starting that discussion early maximises the opportunity to press your case.

However, all interventions must carry out a Public Consultation which provides the one and only opportunity for anyone affected by the plans to provide their feedback. The Consultation has to remain open for a month and will contain maps and data which expresses the organisations best understanding of where they feel they can intervene and where specifically they plan to intervene; this will often be informed by the OMR process but is not limited to it.

Continue reading “Its your business to know your Open Market Review from your Public Consultation!” »

Creating a first draft fibre network using Opensource tools

November 7, 2014 in Adrian's tech blog, Mapping by Adrian Wooster

There are some fantastic tools out there for detailed design of fibre networks from companies like Comsof and IT Simplicity but they are sometimes overkill when all you want to gauge is if fibre is even the right technology to consider or if a project is worth going to the extra level of detail.

There are some excellent Opensource GIS tools out there with more features than most of us will ever need to consider – but are there enough to get that first draft fibre model to suggest whether fibre is the right solution?

The quick answer is “yes” but not in one place.

Continue reading “Creating a first draft fibre network using Opensource tools” »

Clustering spatial data

November 7, 2014 in Adrian's tech blog, Mapping by Adrian Wooster

I’ve  recently needed to find a way to break a large dataset of points into manageable clusters, ideally within a Postgres database.

I’ve not found anything in PostGIS, although would love to be proved wrong, so I looked to the R statistical language and to using the PL/R extension in Postgres (sorry, this post assumes R and PL/R have been installed).

After muddling around in a bunch of things at the edge of my understanding, I’ve managed to create a PL/R function that takes a set of spatially distributed points, processes them using R’s k-means tools, and returns them with a cluster id appended. Continue reading “Clustering spatial data” »

Estimating FttC/VDSL with free GIS tools

August 11, 2014 in Adrian's tech blog, Mapping by Adrian Wooster

One of the more common mapping questions I get asked is about predicting VDSL speeds – who might benefit from an upgrade to Fibre to the Cabinet (FttC) and who might be caught in what might be called the “NGA but not superfast” trap where premises are connected to an upgraded cabinet but don’t really benefit from it.

VDSL, just like its sibling technology ADSL before it, delivers diminishing speed with distance; in this case the further from a cabinet a customer resides the slower the speed they might expect. This decay is fairly well documented by manufacturers so can be predicted where the cabinet location and the copper network routes are known – but often only the location of the cabinet is known, or at least only the location of the cabinet is relatively easily found out, so some method of estimating the speed is needed based on some assumptions about the network.

The traditional method often used is to simply draw a circle of a given radius around a cabinet; at 1.4 km of wire VDSL is likely to deliver around 24 Mbps to a 1 km radius is often used to make some provision for winding roads. This can be misleading, as there is no standard degree of complexity in our road networks – some cabinets may well be located at the cross roads of a clean radial network while others are at the heart of a labyrinth of twists and turns.

A better method would be to use the road network and a “drive time” or isochrone algorithm but this is more complex and is more resource hungry when a large number so cabinets are needed. However, it is possible to create a model using this approach which works very well for clusters of cabinets using  QGIS, PostGIS 2.x, and the OpenStreetMap road network data loaded into a PostgreSQL database – all free resources!

Continue reading “Estimating FttC/VDSL with free GIS tools” »

Will the EU’s changes to broadband State Aid matter to you?

May 28, 2014 in Adrian's tech blog, Public Policy by Adrian Wooster

The EU has made a rapid start after the recent European elections by cutting the first bit of red tape – in fairness this has been coming for some time so perhaps its not possible to read too much into the timing.

New “block exemptions” make it easier to provide support to smaller projects without bureaucracy and delay. In particular, broadband projects will not have to be “notified” to or approved by the Commission if they are under €70 million – whether it’s for fast, next-generation networks or just “basic” broadband. That significantly cuts red tape for this essential investment – making it easier to roll out more networks for more people.

These enter into force on 1 July.

Essentially broadband projects up to €70m are now considered de minimis, or at a level where the potential for market distortion is considered too small to be worth reporting to the EU.

Does this make a big difference to UK broadband projects?

Continue reading “Will the EU’s changes to broadband State Aid matter to you?” »

All options on the table

April 2, 2014 in Adrian's tech blog, Architecture & Technical by Adrian Wooster

In my new role at Broadway Partners I was recently asked to show how different technologies provide different outcomes for the same area – the diagram is what transpired.

All Options

I picked the Oxfordshire village Swinbrook because its local and it has a very nice pub.

The three windows suggest which homes might benefit from each of  fibre to the cabinet (FttC), fibre to the premise (FttP) and wireless. Continue reading “All options on the table” »

Reviewing the market – what market?

March 21, 2014 in Adrian's tech blog, Public Policy by Adrian Wooster

The first wave of Open Market Reviews (OMRs) have been published by Local Authorities looking to refresh their maps of which areas remain with no plans for superfast broadband services, looking for operators to come forward with their existing coverage and their future plans for the coming three years.

On the face of it this is very good news – it hopefully means that alternative operators will have an opportunity to protect their footprint from overbuilding by another subsidised operator, and its essentially every operator with plans engages with the process if they are to have any voice later on.

However, the big problem with issuing Open Market Reviews now, before worthwhile data is published detailing which areas have already been subsidised, is that most Local Authorities have appeared closed to investment for the last few years so most OMR processes are likely  to simply confirm that.

That’s not to say that there aren’t organisations out there that would happily invest if they knew where it was safe to do so. A small number of counties may well have a busy time working through the responses but I strongly suspect they will be a small minority. Most are highly likely to get no more than perhaps one or two responses.

If the OMR is to be more than a process step in a chain leading to a procurement to subsidise broadband operators then it needs to be carried out some time after the market has had time to digest which areas can safely be invested in. If not, investment will be lost and the state is likely to be subsidising a market unnecessarily.

Its not just the public sector which needs an open market review – operators need their own, informing them of where the state intends to build.

Inflation touches the cloud – get used to it

March 15, 2014 in Adrian's tech blog, Architecture & Technical by Adrian Wooster

From time to time the basket of stuff used to calculate the official measures of inflation is updated to best reflect a typical spending pattern.

The latest update saw something of a watershed moment. For the first time the Consumer Price Index basket contains items which depend on good, reliable broadband.

Out went DVD players – in came Netflix.

Why is this important?

The CPI is not a predictor of the future, it’s a descriptor of the now. The change says that high quality commercial streaming services are a common item in UK consumers’ shipping basket. That Netflix, Amazon Prime, Sky’s Now.TV, etc are mainstream and not a fringe activity of the gadget generation.

It speaks to those that were critical of the decision to make BBC3 an online-only channel. The reality is that streaming is normal and that the key audience for BBC3 is the demographic most at home online. The BBC didn’t get a little more white, make and middle class, as was claimed by critics; it simply reflected the shift in society that the CPI is now confirming.

This small change in the way we measure inflation in the UK should shout at policy makers and commentators with any doubts about the value society puts on broadband, that fast internet is a key infrastructure that underpins consumer spending today, now.

Why is the UK so different? It just is but that’s an opportunity for operators

February 21, 2014 in Adrian's tech blog, Architecture & Technical by Adrian Wooster

The annual FttH Council Conference in Stockholm published it annual FttH/B league table for Europe which seems to perennially out of scope for having too little fibre connectivity to be counted. The UK is not alone, other major nations like Germany and France also struggle to make the grade. Heavy Reading also continue to predict that the UK won’t achieve what they call “fibre maturity” until after 2020.

This precipitated a number of conversations, as it does every year – why is the UK so different?

So here are some of the conclusions.

UK customers like a bargain

Price is king and other factors are perhaps less important than in some other countries. This has driven our service provider market towards a “pile it high, sell it cheap” model” which relies on scale more than in almost any other market. Internet services are not alone in this – price comparison sites are prospering in finance, insurance, energy and the key and sometimes the only differentiator is price.

This characteristic doesn’t mean we are rational either. Complaints about the biggest ISPs are common but there are alternatives that offer a better customer experience or more consistent performance but they cost a bit more so we suffer albeit not in silence. Again the Internet doesn’t have a special place in our irrationality. We sign petitions to keep our rural post offices and village shops open but do all our shopping online or in a major supermarket because its cheaper.

Continue reading “Why is the UK so different? It just is but that’s an opportunity for operators” »

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