Seeing the Value – will the UK Public Accounts Committee make the connections?

28 Jun

WestminsterIn matters of broadband policy many folks would not normally rate the chances of UK Parliamentarians having sufficient awareness to probe government policy to any great depth but in July their Public Accounts Committee will have the benefit of the National Audit Office report on the delivery performance of the Department of Culture Media and Sport – the current policy owner for the UK’s most critical infrastructure development.

The committee can, of course, give witnesses a fully televised hard time for the benefit of the wider public but much will depend on the members’ ability to ask incisive questions.   In their deliberations over the state of broadband policy the PAC will also have the benefit of the Information Economy industry strategy recently launched by the Department for Business (the former owner of broadband infrastructure policy) and, of course, the brilliant independent review of Public Sector Information by Stephan Shakespeare

Hearings of the Public Accounts Committee of the UK Parliament seem an unlikely platform for articulation of radical policy ideas.  The PAC may be regarded as ‘influential’ but in practice government can ignore its reports and the committee has no direct vote on policy issues.  At its best they can capture and deliver views that are of common concern – views and sensitivities that any government might be foolish to dismiss –  and this is why the combination of the NAO, IE and PSI reports is now so powerful.

Centre-right policy across the entire economy is firmly grounded in a view of competitive market efficiency that is so often a misinterpretation of its roots in the USA.    It is true that radical approaches to infrastructure provision in the USA have been routinely opposed in the courts with intensive lobbying from established industry interests.  That however has not prevented 135 municipal FTTP access networks from being deployed and is not deterring many others now in the throes of feasibility studies.  Indeed their regulator, the FCC, is actively encouraging the growth of new entrants to deliver local ‘future-proofed’ Gigabit networks – often in conjunction with local municipal Energy companies.

The reason for this municipal non-conformist economic behaviour is quite simple.  These cities and communities need jobs and economic growth – and someone has rumbled that the global market for the expertise that is engendered is not just huge; it is vastly greater than the growth prospects of an industry dedicated to limiting its own long-term growth in the interests of short-term market gains and value extraction from an outdated analogue infrastructure.

On the other side of the Atlantic the policy view of connectivity is analogous to their recently reframed position on Climate Change.  After years of resistance, after listening attentively to oil and gas lobbyists, realisation has finally dawned that the global market for sustainable energy is real, that climate change is real, and there’s an urgent need to gain qualifying experience if the opportunities are not to be missed.

Which is exactly the point made in the UK’s Information Economy industry strategy.  ‘UK Trade & Industry’ now understands that the global market for smart city management systems is worth around £400bn by 2020 and, if UK firms are to stand any chance of gaining a modest 10% market share, there’s an urgent need to have some sort of credible  qualifying experience.  So far only one UK city has made any real attempt to deploy an ultra-fast city network and, in a classically defensive and litigious response, BT and Virgin Media have opposed that initiative

The PAC may perhaps wonder why the Connected Cities programme is so lacking aspiration and urgency that the public funding is almost entirely ending up with established interests who are not keen to see citizens and enterprise provided with future-proofed fibre access networks.  They might argue the point from the view of Health, Energy, Transport, Environment, Education, Social Services or any departmental position that is now critically dependent on a fully connected digital economy.

They might even question the oddly antique view that the Information Economy is some small but growing sub-sector of UK industry – some clever clogs that do strange digital things – rather than the primary focus for revitalisation and rebalancing across the entire economy.

And, while they are rightly focused on public expenditure they might wonder about value for money for expensive public sector networks paid for by the public purse but not, it seems, allowed to be used for the benefit of citizens.

The digital penny may perhaps have dropped in a corner of the Department for Business Innovation and Skills but it is surely the Treasury that needs to understand the risks and true cost to an economy that cannot afford to prop up relics of the past.

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Related Links.

Searching for the Centre of the Digital Universe

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9 Responses to “Seeing the Value – will the UK Public Accounts Committee make the connections?”

  1. cyberdoyle June 29, 2013 at 7:07 pm #

    Reblogged this on The Final Third First Campaign.

  2. Peter June 29, 2013 at 9:53 pm #

    Does ‘smart city management’ need a ‘ultra-fast city network’? One is applications, the other is connectivity. For instance traffic lights need minimal bandwidth.

    • GroupeIntellex June 30, 2013 at 10:21 am #

      Peter, You raise an important and oft-troubling question – leastways one that troubles many on the supply side of the network industry – so thanks for the opportunity to explain why anyone (and especially smart city developers) might feel that they need all the capacity of Gigabit networks.

      The streetlight, even the most advanced remotely-dimmable LED streetlight, demands minimal data flow . . . . unless of course the lantern houses a public WiFi node, a localized 4G Femtocell to improve mobile data coverage, a CCTV traffic camera, some environmental monitors keeping track of air quality/temperature and public safety indicators like crowd density and noise levels.

      So let’s look at this question from four different perspectives – Innovator/Designer, Service Provider, Consumer (including Business and Public Sector agencies/administrators) and Economic Planners/Strategists – and I give no apologies for a long answer.

      Innovation/Design
      The process of innovation and design is very often one of taking things apart and reassembling them with the addition of new components to produce something that satisfies a greater purpose. The classic example is the collaboration by Mr Massey and Mr Ferguson that gave us the combined harvester. It’s a clumsy process and often iterative – designs evolve to gradually become more elegant and efficient and eventually become commoditized for recombination with other systems/products in a new wave of innovation.

      The design process is creative. Constraining the process by limiting capacity – excluding the options of collaborative combination – is the normal outcome when taking a narrow view of purpose and strict cost accounting. Why shouldn’t the lamppost be an input as well as an output device? (Hello Lamppost, Bristol) Indeed the Electric Power Board in Chattanooga now find that their connectivity intended initially to read meters and lower energy costs now enables them to offer consumers even lower tariffs if they opt for load control – auto-intervention to shed the power load across the city when disaster or overload situations dictate. Sure, that specific individual task does not need a Gig, but the key innovation-enabler is the relatively unconstrained and ubiquitous capacity for as yet unimagined fresh combinations with umpteen other activities.

      Service Provider
      We should be very careful to differentiate between utility access network providers and the vast range of services that travel on those networks – not least because a legacy of the telephonic era is some confusion in the public mind. This confusion is maintained by ardent marketeers who have not yet adjusted their propositions to a digital era where consumers are well able to construct their own combinative versions of their digital economy. Are the Apps on your smartphone the same as the Apps on mine? Some maybe but individual choices reflect individual needs. My notion of value will be different to yours because the context in which a service is being used may differ. My mobile is very rarely used as a phone – mostly it’s a remote control for my books, music, shopping, navigation, weather forecasts and the tide tables – and mostly it connects via WiFi into my fixed network and very rarely via the cellular system that spawned the device.

      In the context of smart city management there’s a common interest in developing smart citizens – those engaged in their community and enabled to collaborate at work and at home.
      The Services Providers – those who provide service/content platforms for doing stuff – are hugely dependent on the connectivity providers who permit the stuff to be done. If, as a city manager, you want schools to offload processing to cloud services you do not want constrained upload speeds or high latency. And those switched-on utility providers who have dared to venture on this path know from experience that, although it may seem that take-up amongst households of the very fastest options seems limited, the reason they have their lower-capacity customers is that those folks vote for the reassurance of future-proofing even if they do not yet know for what they will need the future headroom.

      Consumers

      Let’s start with non-domestic users – not because households are less important but because the business market includes a vast range from enterprise to public sector services and the latter carries a huge cost to taxpayers. City managers need to drive efficiency in everything they do – especially in times of economic hardship – and they need to explore all manner of innovative ways of improving citizen services at the same time. Capacity is not, for them some luxury. It becomes and essential in pursuing Open Data Transparency, the provision of higher employment skills and gaining greater citizen engagement. Cost differences between a fibre connection offering 100Mb/s and another with 1000Mb/s are marginal. The network providers may choose to extract a premium for higher capacity but the public service interest lies in deploying the capacity for greatest benefit – which is why the local kids can use the 3D printer on the 4th floor of the library.

      Domestic consumers (and these include the huge range of home-based workers) live in a naturally combinative environment of family and business needs. Any one task on it’s own may have minimal data demands but in combination – even with today’s limited range of devices – the aggregate demand rockets. Increasingly we expect the digital facilities at home to be replicable wherever we are – and if we are out of reach of the home network then we expect to find WiFi and/mobile filling the gaps elsewhere. Stuck in the traffic jam citizens expect to know how to avoid the faulty traffic lights or breakdown – and know this with far greater immediacy than waiting for the next radio travel update.

      Economic Planning/Strategy
      Last but certainly not least, from the perspective of those concerned to grow jobs and rebalance the economy to reflect new geographic and sector needs, the power of digital infrastructure investment is key in many ways. International service platform owners do not relocate jobs and investment to Northern Sweden because of the weather – their life-blood is connectivity and smart people in communities that have decades of connected expertise. Contrast those, no doubt strictly accountable, operations that do not allow social media to be used as part of the work environment. I do not intend to disparage accountancy – blessed are the bean counters who can tell us how many beans we can sow.

      Review the underlying reasons for success amongst the world’s leading ‘Intelligent Communities’ and you’ll find that advocacy – local pride and identity – differentiating those places, marking them out as magnets for investment and growing local enterprise at rates that shock. Many such places only twigged the need for action when disaster had befallen and the future looked gloomy – closure of old industries and austerity measures leading to a sort of self-inflicted degeneration. Having been shocked into action they needed to reboot – and sorting out their local digital infrastructure for a new future is a natural part of that process.

      In conclusion
      Yes, you are right in saying that the traffic light on its own does not need ultrafast network connectivity and the same is true for every other individual component of a smart city populated by smart citizens. But what makes these places and communities smart is their underlying connectivity – the ability to invent ‘things that work with other things’ and a deeply collaborative culture that does not recognise silo boundaries but encourages innovation.

      With apologies to John Donne, ask not for whom the connected traffic light glows or the lamppost listens – they are connected for you, for me and for everyone. We are all part of this connected continent of ideas and interactions.

      • cyberdoyle July 3, 2013 at 4:07 pm #

        Lots of things don’t need high speeds to run. But add them all together and they just don’t work on most peoples connections. Home owners will give priority to what they want the internet to provide, so there has to be plenty of spare capacity to run all the things that will save government/utilities money. Get a load of kids home from school doing homework, watching catchup tv etc and the connection falls over, and with it the smart meters.

      • Peter July 4, 2013 at 9:03 am #

        Not if the smart metering has priority. My point is that a high speed link eg. via fibre, is not necessary for smart metering.

        So what is the latest on smart metering in the UK? Have they realised that providing people with usage displays is interesting for the first few weeks and to save energy the best way is not switch things on. Or introduce time of day tariffs for all.

      • GroupeIntellex July 4, 2013 at 9:48 am #

        I think it is is instructive to look at the application evolution of smart metering in places like Chattanooga. The consumer awareness of energy use and motivation to modify arrives not so much from some local display but from enhanced billing data – not least the nudge of anonymised neighbourhood comparisons. Another great energy waste reduction derives from the local distributor (EPB) being able to judge more closely its wholesale power needs – the meters are read every 15 minutes. EPB also has the ability (for those who opt in) to shed the load – e.g. remotely turn down the central heating or air conditioning – and offer a reduced tariff for those who opt in. Only one example this of tariff flexibility.

        Another key facet of the EPB design is that they required 100% reliability at 100% of premises throughout their coverage area – the City and the surrounding County – and not except any operational fluctuations or mobile not-spots. It is of course the big consumers that have the most impact (and benefit). The street lighting conversion to LEDs in this City brings with it new flexibilities to dim them or selecting switch them off as each lamppost is individually addressable. Police cars can intervene if they need more light for an incident.

        As far as I know the grand plans to spend up to £8bn in the UK on smart metering have taken a knock – tho’ not because anyone suggested that we didn’t need a duplicate network (even if the mobile industry likes that idea) but because some Select Committee railed against the expense. The scale of the budget would have course handsomely paid for nationwide FTTH coverage with significant Health and Transport benefits – but let’s not get our hope up that the silos are going to be merged any time soon!

      • Peter July 4, 2013 at 10:37 am #

        And all of the above can be achieved now in the UK with ADSL or FTTC links before FTTP is widely available.

        They say – ‘Government estimates the benefits to Britain will exceed £7.3 billion over and above the cost of the £11.3 billion programme.’

        And ‘Government estimates put the average saving at £23 a year
        by 2020 on combined gas and electricity bills’. Wow!

      • GroupeIntellex July 7, 2013 at 12:11 pm #

        Final thought as this conversation has moved on – The FCC have made it clear that getting by with anything less than FTTP is a false economy – http://www.forbes.com/sites/ciocentral/2013/01/18/faster-sooner-why-the-u-s-needs-gigabit-communities/

  3. Peter July 10, 2013 at 7:32 am #

    There is a product for lamp posts – http://www.openreach.co.uk/orpg/home/products/ethernetservices/streetaccess/streetaccess.do

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