A Certain Uncertainty

16 Jul

Question Marks And Man Showing Confusion Or Unsure

Time and again in recent weeks the pleas from European business leaders (and particularly here in the UK) for an end to uncertainty – or at least less of a policy vacuum – might have seemed quite the opposite of what might have been expected from our supposedly mighty risk-takers.

Any fleeting signs of stability have momentarily bolstered stock markets and smoothed exchange rate readjustments and yet it is ‘disruption’ we are oft told that is the golden characteristic of progressive, thrusting, opportunistic and innovative times.

This apparent contradiction reveals another truth. Businesses like to disrupt others but otherwise dislike being disrupted – and larger business with more at stake like it even less.   Yes, they’ll welcome innovation – but only on their own terms. And that is, of course, why monopoly power is so dangerously regressive.

Even, as in the case of BT’s Openreach, where the threat of regulatory changes looms large, uncertainty can invoke the sort of paralysis that borders on an existential crisis. No wonder, then, that when interviewed CEO Clive Selley is sounding more like Macbeth: “If it were done when ’tis done, then ’twere well it were done quickly.”  There is no standing still in business and confidence is essential fuel.  Do nothing and nothing happens.

But his organisation’s current uncertainty exists only because of the ever-widening gap between national economic imperatives (championed by the regulator in lieu of government) and the resistance of an incumbent determined to extract shareholder value from legacy assets.

Put simply (though to be fair it is far from simple) Openreach can see little investment rationale in providing everyone with future-proofed broadband services. They would much rather stretch the capability of their existing copper assets and hope that demand for capacity can be constrained.

On the other hand, those who argue (in the national interest) for a future-proofed infrastructure (inevitably with vastly greater use of fibre) point to the wider creative constraints of underperforming connectivity. Download speeds are, they’d say, far less important than upload speeds, low latency, minimal packet loss, greater reliability and vastly lower operational costs.

And it is these factors that are now calling time on strategies that were decided well over a decade ago and based on dodgy economics. Fibre was said to be inordinately expensive. It was said many times over and that mantra became embedded in investors’ minds. And it was wrong. And facing up to that truth is awkward. Not perhaps as awkward as Brexit but, like that referendum, the choice has been determined by those whose delusions are most believed.

Now, more than ever, the UK needs to rethink the parameters around digital infrastructure investment. We applaud the creative industries and the clever clogs beavering away developing new services, cutting costs and making lives easier – particularly in the public sector. But all that cleverness is nothing without affordable underlying future-proofed connectivity.

Yes, in some places, gradually, we can find signs of a smarter approach. Yes, we can see that sharp, thoroughly commercial, minds have cracked the challenges of doing what was previously dismissed as not financially viable.   All that remains is for incumbents to recognize the new realities or suffer the consequences.

Meanwhile, leastways until our incoming Digital Minister grasps the issues, the UK will muddle through with a certain uncertainty.

 

 

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5 Responses to “A Certain Uncertainty”

  1. chrisconder July 16, 2016 at 4:59 pm #

    If the new minister has the same advisors as the old minister, he too will be convinced that the incumbent can clothe him in cloth of gold. Vaizey could never hear the people when they shouted ‘the Emperor has no clothes’. Let us see if the new man will be a fool too. Keep the faith people, the future is nearly upon us, and we have to bring on the fibre. Moral and optic, and clothe our nation in a suitable manner for the future. And copper doesn’t cut it any more. That was for the industrial revolution. The digital revolution needs much more capacity and it has to be symmetrical. Patching up obsolete tech is the road to us becoming a third world digital nation. For sure.

    • GroupeIntellex July 17, 2016 at 10:21 am #

      Yes Chris – but, if you don’t mind me saying, we should reflect on the distance already run and the impact of new (post referendum) realities. With any great upheaval the loss of continuity can be balanced by the scope for fresh thinking. The previous minister had gained great understanding of the ultimate need for a gigabit nation and will I’m sure share his insights with his successor. That does not mean that earlier judgements will dictate the future. To quote oscar Wilde: ‘Consistency is the last refuge of the unimaginative’ – and the new reality is that imagination is now very much in demand.

      • chrisconder July 17, 2016 at 11:54 am #

        I hope he doesn’t share his insights, he is convinced by the incumbent that gigabit can come down gfarce phone lines. I agree, fresh thinking by someone with a grasp of physics may save the day, but the distance already run has been dissipated by running round in circles dancing to the tune of the multi million pound marketing lobby and legal department of our monopoly telecoms supplier. If Oscar were alive today he’d probably have coined the phrase that nobody got fired for buying IBM, but Ed did.

      • GroupeIntellex July 17, 2016 at 1:01 pm #

        Chris – You have a point ‘running round in circles’ – I was reminded to look back at something I wrote back in 2003.

        http://www.groupe-intellex.com/editorials/18-gi-global/89-uk-households-broadband-adsl.html

        Maybe it’s time I resurrected some of my archived material and copied same to the then recently appointed chairman of Ofcom. In the 2003 article I made passing reference to his speech the day before – in which he called for ‘Liquid Bandwidth’ and poured scorn on ADSL.

        David Young (now Lord) is nowadays Chair of the Competition and Markets Authority – the body to whom Ofcom would turn if/when BT & Openreach separation became a determined prospect.

        cheers

      • chrisconder July 17, 2016 at 2:13 pm #

        I don’t see the point of separation, their legal dept and our civil servants would spend 10 wasted years trying to sort that can of worms. I know Vodaphone is pushing for it (see Times article today) but it ain’t gonna happen. What will happen is that the monopoly incumbent will continue leeching the copper assets until someone wakes up and Does Something. Then they will agree to separation, go bust, and government will then have the whole job to do again. Properly. With fibre. Then they’ll hand it all over to Openretch Mk2. You aren’t the only one who can predict the future, but nobody listens, nobody learns and probably nobody remembers we told them what would happen if they gave all the digital switchover funding to OR. The competition and markets authority are another useless quango, like all the others. We have provided gigabit fibre broadband to an area the size of Greater Manchester and now OR are overbuilding our villages. It doesn’t bother us, but what a waste of public funding. They don’t get any customers… One pair of cabinets is now out of sight because of all the weeds round it.

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