We must create a broadband network fit for the decades to come

Tuesday 13 October 2015

We must create a broadband network fit for the decades to come

A shorter version of this blog appeared in the Daily Mail on 13 October 2015

Broadband is the technology with the power to transform communities, connect us with the world and drive our economy. Over the next few months, decisions will be made about its future that will be incredibly important for everyone in the UK. They will affect the choice, service and speeds received by families and businesses across the country.

Like many others in the industry, we believe a fundamental change is required. The problem is that BT, just one of the major broadband providers, has sole control of the national telecommunications network through its Openreach division. This creates a conflict of interest because Openreach also provides services to BT’s competitors. It’s as if British Airways owned Heathrow.

The service received by customers today is just not good enough. For around 90% of our customers, it takes over 10 calendar days for Openreach to activate a broadband line.  It’s doubly frustrating if you have to take time off work for an Openreach engineer to come to your house and then as has happens far too often they change the time or miss the appointment all together.

Aside from poor service, we are also in danger of falling behind other nations in terms of the quality of our network. A recent report found that London was ranked 26th among European capitals for broadband speeds, just ahead of Minsk.  

For the UK to top the global connectivity table, we must aim high. We think the industry should aim for widely available Gigabit broadband which is ten times the best available speed now or fifty times the average speed the UK customer currently gets. 

Many other nations are building fibre networks direct to the home capable of delivering Gigabit broadband. The New Zealand government has accelerated roll-out of fibre-to-the-premise broadband to 80% of the population by 2022.  Meanwhile in Japan and Korea, more than half the population already receives connection speeds of more than 100Mbps. However the current industry structure will not deliver the radical step change that would make the UK a future world leader. 

BT itself shows little appetite to take the fundamental step of delivering Gigabit broadband. It just plans to upgrade its existing copper network.  The newest technology that it is planning to deploy, “G.Fast”, still relies on existing copper lines that run into customers’ homes. Professor Peter Cochrane, BT’s former head of research and development, calls their vision “wholly inadequate”.

The solution is to separate the network from the rest of BT, freeing each company to be part of a more competitive market. As a brand new FTSE 100 company, an independent Openreach could raise capital and secure investment from the whole of the industry, not just BT.

Many broadband users agree this is the way forward. Independent research by YouGov shows that, of those with a view, more than three quarters believe Openreach should be independent.

If the national network gets the investment and ambition that it needs, the economy as a whole stands to benefit. The Chancellor calls productivity the “challenge of our time” and has announced an independent commission to drive progress in major infrastructure projects.  Greater productivity can also be achieved by making the UK a world leader in digital connectivity.  From the railways to electrification, the greatest gains in productivity have always been driven by step changes in technology and investment to harness innovation.  If we are bold enough to grasp the opportunity, investment in digital networks will return economic benefits many times over.

This is the perfect time to seize the opportunity. Ofcom is conducting a once in a decade review of the communications market. It will decide whether to ask the Competition and Markets Authority, the body that has examined the structure of the energy and transport sectors, to undertake a full market investigation.

To deliver the broadband that the UK needs to prosper, we must create a network that is fit for decades to come.


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