Tag Archive for 'aggregation'

12p or a fifth-of-percent

Published on May 8, 2011 in Adrian's tech blog. 0 Comments Tags: , , , , .

The Stakeholder Group’s (BSG) Commercial, Operational and Technical Standards (COTS) working group has written to BDUK recommending that they find their way to supporting the development of framework to ensure retail service competition on next generation networks.

This comes about two years after the team at BIS declined a proposal to do exactly that, feeling that it should be formed and funded by the industry at the recommendation of the BSG which, in turn, lead to the formation of the COTS process.

A year ago, when little progress had been made, a submission to the Technology Strategy Broad to build a market clearing system was also turned down, although that may have reflected the sometimes random nature of bidding to the TSB; one judge said the bid hadn’t understood the risks, a second said it fully understood the risks, while the third judge admitted they weren’t qualified to judge the bid.

Attempts to create a clearing system commercially also ran into treacle – enough written about that here already.

The reality is that it was always going to be necessary to create a wholesale marketplace for broadband services should the access market fragment as it has in most markets across Europe. It was obvious two years ago and its still obvious today.

If it were to cost around £1m to build a solution, it would equate to about a fifth-of-a-percent of BDUK’s £500m+ budget were the to have funded it.

Or, with about 8m premises in the final third, just 12p per customer were the industry to have funded it.

This really isn’t a big thing – other industries have done it – but, collectively, we seem to be unable to see our way around this.

This uncertainty is having a significant impact on the development of in the UK. Where schemes are developing, they are largely doing it as vertically integrated networks - not out of choice but of necessity. This is bad for the industry and customers alike, and remains a major failing in the BDUK procurement process where an open-access model is legal requirement.

Lets top sweating the small stuff!

Where might a broadband market take us?

Published on January 21, 2011 in Adrian's tech blog. 2 Comments Tags: , , , .

There is a whole train of thought which gets set in motion as soon as you start to consider what happens if the market becomes fragmented and more competitive at an infrastructure level.

Progress can be made quickly at first – fragmenting mass markets require a market; a market needs a marketplace; enter the Exchange; trading in broadband assets begins; the market learns to set it own price; and then comes some of the harder things to think about.

There is no such thing as a perfect market except as a thought experiment, and creative people begin to innovate when they encounter novel opportunities. Many of these innovations and turns add to the colour of the market and benefit the market participants but occasionally they can also have more challenging implications which may have a less beneficial impact. And that’s when market governance and regulation needs to step up.

Many sectors have evolved the checks and balances over a long time, and they never let up their guard or stop learning lessons – some of them very painful (think US mortgage derivatives if you want an extreme).

The broadband industry doesn’t have this long history to draw on – there is no two-sided broadband marketplace where assets are openly traded by a wide variety of market participants. But soon this will become a necessity!

The initial trading environment of the JON Exchange, for example, is currently the focus of work packages of the Broadband Stakeholder Group, the NICC, INCA, and a wide constituency of market members and pilot companies. At the moment much of this work naturally focuses on adapting the current interconnect regimes to the new broadband world. Falling from this are “use cases” used to check that the rules make sense and deliver something expected and of use.

Naturally the focus of this work is to create a solid trading environment which delivers the widest competitive broadband services, and its not a time for building in masses safeguards, wrapping the market up in knots, for what might or might not happen as confidence and experience grows. But it is worth starting the consider in the background some of the things which might come up, to help us adjust our mind-set to a more open and competitive environment – to take advantage of the positive opportunities and to prepare for the less positive ones.

Such a thought process came up recently – what are the implications of an organisation buying a VLAN on the market and sub-dividing it with further VLANs?

Continue reading “Where might a broadband market take us?” »

The hub of the argument

Published on December 6, 2010 in Adrian's tech blog. 0 Comments Tags: , , , .

At the Exchange, we’re very excited by the ’s announced strategy for superfast today. The feeling that network operators would be used by as pawns to bargain with BT again I think is receding; confidence among network operators and builders that its safe to invest should be rising; and JON Exchange is ready to play its part.

The last Government’s first generation broadband policy led to early improvements in speed and geographical coverage but largely ignored the need for a competitive infrastructure. Competition has ever since been focussed on a fairly narrow service layer with infrastructure investments largely limited to sitting on top of BT’s cables, unpinning BT’s dominance in the market. There was a general sense that the Government used smaller, alternative initiatives as pawns to negotiate the deal they always wanted from BT.

The legacy of that policy is that we now have widespread but very basic infrastructure without a competitive market which would have ensured continued investment at the most basic level – in the physical infrastructure to our homes and businesses.

Today’s announcement by signals a more balanced approach which should ensure a fair and competitive infrastructure market embodying diversity and innovation, and if successful will lead to market forces causing naturally occurring investment in the future.

By focussing on hubs as the gateway between infrastructure investment and service providers, the Government appears to be removing the assumption that BT’s exchanges and metro-nodes will be the default locations for new broadband investment. That’s not to say, of course, that BT will be excluded – I’m certain that they will win the opportunity to build and run significant parts of our future broadband ecosystem but the playing field feels like it has been levelled, giving alternative network operators an opportunity also.

The idea of a diverse and competitive market in any other walk of life is normally considered a good thing but the telecoms industry is largely used to a limited scope for competition, largely focussed at the service layer. Where it was permitted, competition generally flourished but the nature of competition even at these levels was often stifled by the lack of diversity in the basic infrastructure. The creation of a patchwork of infrastructures, stitched together around regional hubs and their offerings presented on an open marketplace is likely to change that forever.

Several years ago I called them Joint Open Network Hubs – JON hubs. Others call them village or pumps. Whatever we call them, JON Exchange excited by the prospect of helping to draw together the various parts of the industry in a vibrant and exciting marketplace.

Ambition is the new agenda

Published on July 18, 2010 in Adrian's tech blog. 1 Comment Tags: , , , , , , , , , , , , , , , , .

Last Thursday I attended the ’s Industry Day where they laid out their key policy framework and work programme for and the . If you hung around just long enough to hear , and Caroline speak, and with only one ear on what was being said while you rushed to submit your copy you might be forgiven for thinking this was another platform where the new government blames the old for a delay in delivering on a promise – BUT you’d be VERY wrong.

Before the election two phrases kept cropping up – “We’re in this together” and “Big Society”. For me, Thursday’s event was possibly the first time I’d seen a concrete example of what that meant in real terms. What was announced wasn’t a policy which handed large sums of money to a semi-state organisation to proscribe how better broadband would be delivered from on high. Instead we heard from Ministers explaining what their role was in defining and delivering the future, what we could reasonably expect from , and what needed to come from others.

We heard how the Government will remove barriers to investment and create the structures necessary to support local communities in defining their own broadband futures, and how industry would be encouraged to support that process, enabling a smart division of skills that could solve all but the most intractable of broadband problems.

And we heard from a Minister with a vision of 50 Mbps symmetrical services reaching most people by the end of this delivered by the combined efforts of Government, industry and communities. I suspect that sent a few shivers through Whitehall but knowing the people involved I’m sure they are universally excited by the challenge.

Starting immediately is a month long consultation seeking paper solutions to three paper broadband problems. These will be used to shape the Government’s support programmes, ensuring both commercial and organisations receive the right kind of support in the right manner. At the same time, the English regions and the devolved assemblies are each being asked to construct a long-list of areas they want to benefit from next generation broadband. From this, Broadband Delivery UK () will announce the location of three real market testing projects in September and begin a tendering process to find the right mix of commercial and players to make them a reality. From these projects they aim to learn about the impact of state aid, forms of broadband registration and demand stimulation, and infrastructure sharing open access models.

While this is going on, BD-UK will be negotiating with the EU towards a national state aid agreement which for the first time since dial-up modems were in short trousers will provide clear guidance to local authorities on what they can and can’t do.  State Aid legislation has been a bigger block to UK investment in broadband than almost any other, with state sponsored projects crippled by fear of challenge or paralysed by years of rulings before they can begin work. The first roadblock gone – and with it gone, a new process will be in place to unlock the public networks which already reach many of our most remote communities.

Secondly work will push ahead on infrastructure sharing including the opening up of BT’s ducts as well as other assets like the sewers and culverts. This is a knotty problem and not a panacea but an important element in making the UK an easier place to invest in. Second roadblock going.

With all this work hopefully complete – the lessons from the market testing projects learnt, infrastructure hopefully opened up, and state aid put to bed – the Government will announce the main programme of work next year to support local delivery of super-fast broadband, supported by what they termed “mid-level ” to make it easier for the service providers to link to homes and businesses. This time next year we will be well prepared for the main challenge ahead.

Did I hear all the answers on Thursday?No
Does that worry me?Quite the opposite – I’m relieved!
Am I excited?Absolutely!

For the first time in a long while, ambition is back on the agenda. Whether we actually achieve at least 50Mbps symmetrically to every corner of the UK doesn’t matter nearly so much as the way it will change the shape and aspirations of an industry, and the people and businesses that it serves. The journey matters as much as the arriving, and we are on our way.

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