What is the UK’s broadband future?

On downtime alone, the cost is substantial – estimated at £11bn per year. We are moving into a new era where speed – in upload, download and latency (the delay that happens in data communication) – as well as reliability will determine Britain’s place in the future digital economy. But what is the UK’s broadband future?

But without a substantial shift – from short-term incremental improvement to long-term future-proof progress – the UK runs the risk of falling further behind while its burgeoning tech sector decamps elsewhere.

Britain’s telecommunications network and resulting broadband and connectivity woes did not appear overnight. They are the result of nearly two centuries of evolution and the compound distortion of decisions made long ago.

Starting in the 19th century under Benjamin Disraeli, one by one, all the mediums of communication were nationalised: the telegraph companies (1869), the radio spectrum (1904) and, in 1912, the Telephone Company.

Fast-forward to today and the greatest issue at stake for Britain is the 2015 Ofcom strategic review of digital communications, which will set the framework for the next 10 years.

So how does it all work, what are the connectivity chokepoints and how do we compare internationally?

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Where are the broadband chokepoints?

Large rural areas –

about 1.5 million premises, or 48% of all rural premises, are not even able to access broadband speeds of 10 megabits per second (Mbits/s). For mobile coverage, the UK still lags behind in rural connectivity in 2, 3 and 4G with particularly poor reception indoors. Just 46% of the countryside is able to access 4G.

Not-spots and city centres –

a not-spot is an area which isn’t covered by a fixed or mobile network. In reality, most not-spots are partial not-spots as they tend to have one or the other. As well as remote corners of rural Britain having no mobile or broadband coverage, partial not-spots can also occur in city centres.

Poor knowledge about the copper network –

BT does not have a clear record on the quality, positioning and connectivity of the copper network at the local level. The quality of the copper wire varies widely, depending on whether it is pure copper, a copper aluminium alloy, copper-coated aluminium or even just aluminium, all of variable thickness and of differing lengths to the premises, with a corresponding impact on the throughput of data.

This makes it hard for third parties to know what level of service they can offer customers.

However, a lack of proper record-keeping in the early days of the laying of cables and pipes means that there is even sometimes uncertainty about which side of a road they are located on, leading to unnecessary expense and time spent in digging up tarmac and pavements.

Limited knowledge about the whole network –

unlike the power, gas and water grids that need to match capacity and demand in real time with prices, there are great unknowns within the telecoms network about quality, reliability and consistency of service. Actual Experience, co-founded by Dave Page and Professor Jonathan Pitts, has a cloud platform app that measures and captures the digital chain, identifying weak points in the internet network that result in sudden changes of speed or dropouts.

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Connectivity bandwidth

Data consumption is growing at around 50 per cent or more per year. These are the main drivers:

• Faster broadband speeds

– lead to more demand for internet use. Between 2014 and 2015, the average broadband speed increased from 23 to 28Mbits/s and average monthly data usage rose from 58 to 82GB.

• More consumption of video

– Faster internet speeds have enabled the use of video on demand services, which are the highest consumers of data.

Internet today – connected TVs present a choice of standard definition or high definition. In the near future, there will be more widespread use of ultra-high definition. This matters because the higher the definition, the greater the bandwidth requirement and the slower the download time.

There are potentially several wildcards, however, which suggest that these forecasts may be a conservative underestimate. Immersive 360-degree virtual reality – headsets will be available for more devices this year – will require greater bandwidth than any flat screen.

At the other end of the scale, there is also massive potential for the many billions of new battery-powered wireless sensors making up the Internet of Things (IoT) which will be connected to the web – sending out new packets and volumes of data that did not exist before, and to where the internet and mobile network did not reach.

Rival technologies

There are many competing and complementary broadband and connectivity technologies available or soon to be ready.

Fibre to the premises (FTTP).

This is for now the highest-performing internet connection. By bringing a fibre cable into the home or office, symmetrical upload and download speeds become available at 1Gbit/s, with low latency rates. However, by comparison with other European countries, the penetration of FTTP in the UK is very low – 0.003%.

Satellite broadband.

Many Britons have been receiving data from satellites since the late 1980s. Satellite broadband runs on the same principle but with higher bandwidth and can serve remote, poorly connected locations at much lower cost, more quickly. All of today’s broadband satellites operate in geostationary orbit at a height of 22,000 miles, which creates longer latency – 250 microseconds or more. However, download speeds are improving. ViaSat3 from 2020 will offer 1Gbit/s and largely uncapped data. It is well established in the US, with 700,000 subscribers but only a few thousand in the UK.

Fibre to the cabinet (FTTC).

This brings fibre-optic cable between the cabinet (often a roadside box) and the exchange for a high-bit-rate digital subscriber line (VDSL). This is the superfast option being deployed across the UK by Openreach and can deliver speeds at up to 76Mbits/s depending on the distance to the cabinet.
Asymmetric digital subscriber lines and ADSL2+. In the UK, these are the standard broadband services and offer speeds from 0.5 to 24Mbits/s.

Aerial fibre.

To avoid the costs of digging trenches in pavements and to the premises, in some cases it may be possible to deliver FTTP wound around existing telegraph poles and lines.

Line-of-sight or fixed-wireless access.

Line-of-sight broadband connections essentially place a transmitting tower on top of a hill and relay either satellite or mobile wireless connections to anywhere that is within range and has line of sight of the connection.

Mobile wireless.

In the UK, Relish has led the way with this offering, using 3G and 4G signals only for data to deliver 50-60 and up to 700Mbits/s to a router in city centres or rural not-spots that are poorly served by broadband.

Mobile broadband – 3G, 4G, 5G.

The average download speed for mobile today is 6.1Mbits/s rising to 15.1 Mbits/s for 4G ; 5G promises to have a speed of at least 1Gbit/s and may be available from 2020.

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A superfast future?

In December 2010, the government published Britain’s Superfast Broadband Future, with the aim of the UK having the best superfast broadband network in Europe by 2015. So did the government achieve that?

Based on data compiled by Analysys Mason, it appears that the UK achieved its aim of having the best network by 2015. But the wider picture is more complex and it does not mean that the UK could not have done better.

First of all, a national average of download speed would be a much more important measure, if the UK had an equal geographic distribution of population and economic activity.

However, it doesn’t. Very high bandwidth in remote corners of Britain will never have the same dynamic impact as in a concentrated bustling city centre. So it is concerning that London – Europe’s biggest city by economic output – has such a poor ranking compared to other European capitals, ranking 26th, just above Minsk.

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What can we learn from abroad?

All countries are different and work with varying legacy telecoms structures, regulatory environments, players and standards of living. However, there are two successful examples that the UK should pay close attention to when considering future broadband growth and investment.

Lithuania

Lithuania has the third-fastest connections in Europe. This is no small achievement considering it has a GDP per head around a third of the UK’s and a fifth of the population density.

How can it do this? In 2004, Lithuania’s equivalent of Ofcom, RRT, mandated the compulsory sharing of all passive infrastructure “…suitable for construction of electronic communications networks”. To further incentivise network investment, RTT went for low-cost access to ducts and poles.

In Lithuania, the typical price per metre per month of duct access is £0.028 whereas in the UK it is £0.078. The bottom line is that competition and very low access costs gave Lithuania additional network investment and much faster broadband than would have happened if the incumbent’s privileges had been left in place.

New Zealand

Across the UK, many telecoms companies – apart from Virgin Media – have been calling for Ofcom to refer BT to the Competition and Markets Authority in order to split off BT Openreach as a separate company.

This has worked well in New Zealand. In 2011, overseen by the regulator and approved by shareholders, Telecom NZ was separated into two companies – Chorus and Telecom New Zealand, which became Spark New Zealand. Chorus, the Kiwi equivalent of Openreach, is responsible for the network infrastructure and Spark provides internet, mobile and fixed-line telephone services. Crucially, Chorus was spun-off, not sold off.

This meant that existing shareholders were able to see an increase in value and retain enough cash flow for future investments. New Zealand is racing ahead not just in delivering more fibre-network investment and subscriptions, but in a flourishing range of consumer choice in video on demand, ISPs and fixed-line services with a goal for FTTP to reach 75% coverage by 2020.

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The road ahead

The UK finds itself at a crossroads. The demand for data, largely driven by video and hand-held devices, is growing fast, but the fixed-access network investment has been woefully behind the curve, especially in comparison to many other nations.

The lack of network infrastructure competition has been a huge hindrance. BT has done well to extend the life of the copper network, but Britain cannot be ready for the future with a mere 0.003% penetration level of FTTP. Incremental improvements with pre-existing assets based on short-term targets are no longer appropriate in a non-linear digital world.

Britain needs to have ambition, vision and longer-term infrastructure planning. This requires looking beyond the next five years and estimating what demand and technologies will look like. With multi-gigabit speeds, many new capabilities become possible.

Virtual reality is coming to market too, with headsets from Oculus Rift, Samsung, Google and HTC. A virtual world will be low cost, and more varied, spontaneous and flexible than the real world.

Above all, the marginal cost of adding new stock-keeping units – a measure of products in a given economy – will be close to zero and quickly exceed those in the real world. Virtual telepresence will lead to the death of distance.

Equally, the digitisation and automation of transport will be dramatic and requires low latency and frequent updates. Fully self-driving cars, expected on our roads from the middle of the next decade, will require high bandwidth in both directions.

Network Rail believes digitising the signalling system can increase capacity by 40%. And Nats (the national air traffic system), plans to make huge improvements by reducing the gaps between planes in airspace from nine to ten miles to just one mile. And flying drones – inevitably for deliveries, and maybe for people too – will rely on high-capacity, resilient two-way networks.

Britain already has many street cameras, but as the cost of data storage falls, much more will be recorded on video, which is demanding for networks.
Looking ahead, fibre to the premises has to be a big part of the solution for two reasons. First, in pure bandwidth limits, it is future-proof. At around 100,000 times that of copper, once it is in place, maintenance costs are low, it lasts for decades and hardware upgrades to much faster speeds for optical splitters, optical network units, and terminals are simple and off the shelf.

Until 2030, policy must look at more immediate concerns. Priority has been given to connectivity to the home to serve the retail market. But business needs much higher importance given to faster networks and competition for services to the workplace.

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