Tag Archives: broadband

So squeezed they stopped squeaking to each other

22 Feb

Oft-lamented short-term pressures drive the search for ‘asset efficiencies’.   With the benefit of hindsight, the making of unforeseen consequences seems to be rooted in a disregard for fairly obvious but difficult-to-measure policy impacts.

In corporate careers, management brownie points seem often to be awarded for displays of macho discipline encouraged by ‘perverse incentives’. Whatever the motivations, it is surely a matter of good governance that that short-term wreckers are not allowed to destroy values that underpin future sustainability.

Question Marks And Man Showing Confusion Or Unsure

But still it happens. Whatever presentational flavor of austerity or efficiency or asset utilization is used to justify the squeeze, the consequences are inherited by the next generation – or at least the next elected set of policy makers.

Or is that really so?

A recent article in The Economist takes issue with the conventional theories around short-termism.  A McKinsey study had argued that 73% of firms were short-termist and the ‘elite’ 27% actually performed better. However, the Schumpeter columnist begged to differ; questioning the evidence and doubting both the causality and relevance of labelling firms as short-term or long-term actors in our very dynamic market environments.

The Economist writer does, however, point out that many big firms ‘wallow in lucrative stagnation’ where profits are high but investment seems not to be boosted by the currently low cost of capital. Rather than label them short-termist and urging them to invest, the real need is for more rigorous competition policy to target ‘fat’ incumbents and boost new market entrants.

Such competition policy rigour might not be immediately popular amongst the self-regarded leaders but it is evident, in one sector at least, that this strand of policy imagination has already taken root. Hence the Chancellor’s autumn statement to inject funding into new entrants deploying ‘full fibre’ networks and also the recent indications coming from Ofcom of an urgent need to deliver ‘at scale’ the sort of infrastructure required to sustain a post-Brexit economy and enable (beyond 2020) an entirely future-proof collaborative architecture to support 5G Mobile.

So despite the common interpretations of austerity, efficiency, cuts, the general woe around short-term follies, narrowband thinking, or ‘squeezing until the pips squeak’, the more mature lesson seems to have been learned that those who are ‘too big to fail’ probably should.

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Fibre Mobile

16 Nov

Describing Fibre to the Cabinet (FTTC) as Fibre Broadband (more truthfully ‘phoneline broadband’ on shorter lines) has led to (a) great confusion for consumers and businesses and (b) huge dissatisfaction when advertised speeds cannot be delivered on account of the variable constraints of the remaining copper in the final link.

Thankfully that dilution of truth by Fixed Operators has not yet been mimicked by Mobile Operators.

mobile-phone-comms-tower-3031If they did so, any cellular mobile service delivered from a Base-Station linked to the wider world by fibre optics could be marketed as ‘Fibre Mobile’ – a tag that would seem nonsensical as many folk imagine that Fixed and Mobile broadband are direct competitors.

Not all cellular Base Stations are currently fed by fibre ‘backhaul’. Many of the consumer complaints of poor mobile service are rooted in coverage and capacity limitations (congestion) further back in the network and in an environment where highly variable demands on the service make tailored design difficult.

Design complications arise not only from the siting of Base Stations and their ‘backhaul’ capacity. There are technical limitations with wireless propagation – radio signals behave differently in different parts of the spectrum.   Designers must contend with a wide range of physical environments – the thickness of walls, foliage on trees and user devices moving at speed across Base Station areas – and they are also constrained by the licensed spectrum available, typically with separate upload and download frequencies.

The point of these observations is that these constraints and performance limitations will be cruelly exposed in the coming era of 5G Mobile. That exposure stems from (1) raised expectations of vast capacity to deliver video and other interactive ‘cloud’ applications and (2) the intended use of much higher radio frequencies. System designers will gain some relief from those challenges by advanced antenna design and complete digitalization – nearly all traffic is now in data form, including voice calls that in earlier mobile generations (and fixed line telephony) were ‘analogue’.

The dominant service design factor is the frequency. Ofcom is already planning to licence frequencies above 26GHz – vastly higher than currently used spectrum typically around 1.8 GHz to 2.6GHz. Lower frequencies (or in old terminology ‘Long Waves’) can travel further – hence the use of 0.7GHz for TV and radio broadcasting.

Some of that legacy TV spectrum usage has been cleared away to make room for wide area coverage of low data-rate services – typically sensors linked with ‘Internet of Things’ applications that often operate only in one direction.

fibre-mobile-freq-coverage-graphHigher frequencies are best used for higher-intensity and interactive applications – and readers will be familiar with the large dishes that beam signals ‘line of sight’ across the country.

At the frequencies now being considered for use in 5G mobile devices, typical coverage areas are reduced to around 200-metre radius and indoor penetration through walls becomes an issue – but throughput capacity is not so much of a problem.

The bottom line on 5G design development is that a vast number of very small lower-power base stations will be needed. These may be more like today’s WiFi routers, or in the style of pizza boxes, with external antenna that are almost invisible compared to today’s mighty masts. And almost all will need a high capacity link back to the Internet and other networks in both directions.

Estimates vary but complete coverage of the UK’s 24million hectares and property (outside and indoors) could, in theory, need between 5 to 7 million small base stations requiring high capacity fibre optic connections. The current operating model, with few sites earning high revenues for property owners, will need to change to many sites (including street furniture such as lampposts) with low (or even zero) wayleave fees.

It does not take a genius to understand that the future of Mobile communications is inextricably linked to the local availability of fibre connectivity that is (a) future-proofed (unlimited capacity) and (b) symmetric i.e. having an equally high speed in both directions.

Short-term improvements for current systems such as ‘national roaming’ and ‘mast sharing’ do not address the longer-term challenges – although they may provide some clues for future technical design and the shape of future regulatory and competitive (but more collaborative) market forces.

What is urgently needed is a reimagining of how we transition from the established notions of infrastructure competition to a more advanced appreciation of consumer and business needs and encourage the willing cooperation of users in shared infrastructure development.

At the same time, the UK’s ability to implement 5G Mobile requires a complete rethink of fixed line environments. The passive infrastructure (i.e. holes and poles) needs to be liberated and, like other utilities, managed in partnership with public agencies. Renewed investment in this arena is challenging and less than glamorous but urgently needed in this era of full-throttle fibre transformation.

Surely with that imaginative but radical ‘separation’ we could envisage a massive shift away from legacy copper networks to energy-efficient pure fibre optics. Sadly most of the public investment in the asymmetric ‘Superfast Fibre’ broadband (FTTC) ‘cul-de-sac’ has been a colossal diversion from the long-term ‘future-proofed’ requirements.

Our economy’s future now depends on policy developers, regulators, local governments and industry setting aside previous tech-ideologies and reaching an understanding of future interdependencies. Only then can the work of educating consumers and enterprise begin – an essential first step towards a more collaborative future that can enable the transition to 5G.

 

Teaching Mama to Suck Gigs

24 Oct

microphone in focus against blurred audienceA recent Telco industry conference listened attentively to a speaker extolling the wonders of Software Defined Networks. The audience was curious. Some delegates wondered why on earth their customers should be handed the keys to the profitable network management business – it could surely lead only to further loss of business. Convenience for customers seemed missing from their agenda.

Other delegates were even more appalled at the SDN turn of events – not only had the speaker broken ranks; it was more troubling than that. Here was an advocate for both SDN and (breathe deep, clasp forehead) Dark Fibre!

A horrified hand shot up at question time. No ordinary delegate and no ordinary question from a Telco senior. And the question spoke volumes for the gulf between Telco industry insiders and Customer expectations. “Surely”, he said after announcing his prestigious rank, “surely the service you seem to be offering . . . does it not require an element of pre-provisioning?” And there, in that moment, the chasm was revealed.  Steady on – let’s not anticipate this digital stuff catching on!

And at an even more recent conference a senior Telco apologist was busy tweeting that there was no need, no demand, no conceivable rationale, for supplying customers with more bandwidth than the Telco deemed necessary. He was not admitting that his technology was in any way inadequate – he was simply continuing the blinkered line that a better service was not needed. Proud he was of their great achievements in supplying a service that (even when stretched) fails to meet customer expectations. ‘Lines, damned lines and statistics’, muttered industry outsiders.

This aversion to demand, ignorance of market realities and imagined fear of investment risk goes deeper. In Telco Land the disbelief of demand is embedded in the very soul of their organisational being. Even if (surely when) they recognise the glimmer of a multi-Gigabit truth those insiders will want to deliver it with new forms of shared service – although most readers will not remember those distant telephonic times.

The consumer optimist may say that those Telco insiders are approaching the end of the line. Some consumers (a few) may already be fortunate to experience, at home or abroad, levels of broadband service that starkly reveal the shortcomings visited on others. Other consumers may ask why? They may ask whether the industry regulator is concerned? They may almost certainly ask why this shambles required so much tax-payer funded investment? And they will be told that it is all very complicated and impossible for ordinary mortals to understand.

It is time to wake up and admit that our experts (even with honest endeavour) made great mistakes. We now know it was a mistake to demand competition at the level of holes and poles. It was a mistake to allow those assets to be monopolised by their owners. It was a mistake to believe that copper phone lines could ever be future-proofed. It was a mistake to assume that Mobile would render fixed-line investment unnecessary. And, above all, it was a mistake to invent that dereliction of regulatory duty – technology neutrality – the ultimate achievement of Telco political lobbying.

But now, at last, we have a government that is minded to make amends.  It may be unwilling to admit to past errors (even though these stretch across many regimes) but it is only realistic to seek a better way forward. Fortunately the cost of doing the job properly has fallen and the previous over-hyped estimates are discredited. Cue rapid repositioning in Telco land – or watch that old guard drift away in a sea of irrelevance. It really is time to teach Mama to suck Gigs.

 

Passive Infrastructures – platforms for digital progress

27 Sep

 

stanley-steamerLike some chicken/egg conundrum the emergence of cars and the improvement of roads went hand in hand – each requiring the other to be fit for purpose.   And the evolution continues to this day although investment in the great civil engineering effort of new road building has largely passed.   Much the same was true of railways and energy distribution – evolutions to meet changing needs.

It is odd, then, that those using the ‘passive infrastructure’ for the digital evolution have not followed the same course. Unlike roads, the underlying infrastructure of holes and poles is still largely used to carry the equivalent of Stanley Steamers or Model T’s to convey the information that is now mostly in a digital form more suited to travelling at the speed of light.

This is much like a canal barge operator facing new competition from railways. They would claim that fast travel might be a danger to health or that speed should be curbed. The huge investment needed to pave roads must have been seen as exorbitant – until, that is, folks worked out the real cost to the economy and society of not doing it.

Of course, a complete replacement of copper wires with fibre is expensive but it’s nowhere near as expensive as previously claimed. The cost is probably less than half of early (over-puffed) estimates and still falling as techniques and materials improve. So the time is rapidly approaching when a combination of falling costs and increasing understanding of value eliminates the rationale for Stanley Steamers and Model T communications. Some would say that time has long-since passed. But logic is not driving the debate. At stake here are imagined fears for the shareholders of canal and barge operators Telco’s.

But, of course, those shareholders (investors) are actually sitting pretty. They own the holes and poles and until recently gave not a damn as to how they were used. What they now know, and are increasingly minded to say, is that if their holes and poles are not repurposed then others will build alternatives or find ways to avoid using them. And what they also know, since they hold diversified portfolios, is that all their other investments would be vastly more successful if light-speed connectivity made business flow faster and more reliably at far lower cost. And some would go further – seeing the need for true future-proofing – for who know what next will be coming down (or up) the line?

Unfortunately Shareholder Power is not of much concern to the enterprises in which they have invested. If grumbles grow they can be bought off with a hefty dividend and, in effect, told not to complain. Cash today nearly always trumps potential cash tomorrow. Long-term perspectives are rarely apparent to executive managements in the thick of the wood. Nor is it much concern for a regulator whose job it to manage fair play in this market rather than the long-term interest of the wider economy. It may be obvious to investors that the prime, most sustainable, asset is not the old twisted copper but the holes and poles.   But how can wiser heads prevail? It will not be put to a referendum but a view is emerging that a very different type of ‘structural separation’ may provide an answer without incurring vast overhead cost.

A transfer of the passive assets to new enterprises (part public owned) with a remit to set tariffs for their use would enable local governments and other public sector agencies (or the regulator) to provide proactive direction – incentivizing more efficient use, investing in regeneration and new-build and urging Stanley Steamers off the road. This type of Structural Separation is far more imaginative and likely to be more effective in creating strategies more attuned to our digital futures. It’s a fair bet that the ‘un-separated’ parts of the enterprises might suddenly see virtue in relaxing resistance to, for example, dark fibre.

Already the regulator Ofcom has demanded that hole & pole capacity is made available to alternative operators. Some cities, like Bristol, have the good fortune to own a duct network. In other (more dirigiste/clear-minded) countries the regulator has set a course for the elimination of the copper that clogs those holes and poles. Meanwhile government in the UK has asked, very gently, if our digitally inclined citizens might, perhaps, be allowed have the right to ride on slightly faster Stanley Steamers – leastways in one direction. The idea that Stanley Steamer technology could be stretched a bit more keeps recurring – but, like a cul-de-sac, that extended design is still very much a dead end.

Lots of very clever people will doubtless spend much time and money trying to find the blindingly obvious solution. Yes – the passive Structural Separation will take time and have an overhead cost (not to mention legal fees) – but that is a consequence of poor decisions three decades past. Sure – the complete infrastructure investment (holes and poles and cables) will be a cost for all parties – a fraction of an extra runway, a smaller fraction of HS2, an even smaller fraction of Hinkley Point. The more equitably shared design, however, could be delivered way before any of those projects and is likely to make all of them either a greater success or moderate their need. Deeply ingrained in Telco-talk is a view that ‘a level playing field’ is a large flat area under which they have buried the competition. Taking control of the playground would certainly improve the prospects for the UK’s new premier league of digital players.

Even the national energy demand would tumble if we stopped heating pavements with expensive cabinets full of electronics to push information down copper wires. The transformation could put a spring in the step for the prospects of Foreign Direct Investment (FDI) and we’d no longer hear the immortal words, “That’s another fine mess you’ve gotten me into, Stanley

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Graphic credit:  Steamcar.com

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.

 

 

Broadband Policy and Local Government

6 May

In the UK we hardly need the example of the increasingly fragmented approach so clearly visible in Australia to underline the need for Local Government intervention.

A recent study from ‘down under’ noted that:

In the Australian context, the recent decision to build the NBN using a mix of technologies will leave the country with a patchwork of different levels of access to the infrastructure as well as producing different speeds across the network. This will intensify the need to investigate the implications of telecommunications at the local level, as Australian local governments then need to respond differently based on the level of access provided for them in each case.[1]

The example is not needed in the UK because we already have a fragmented mix of technologies and, since the late 1980’s, never stood much of a chance of envisioning a more cohesive approach to digital infrastructure.  It is, however, only in recent times that Local government has taken a more determined attitude to this lever of economic and societal development.

But illustrating local impotence, there’s a common link in that final phrase ‘provided for them in each case’ – a sense that incumbents are a law unto themselves as if still nationalized and a touching national belief in the power of market competition.

This newfound realization of the significance of digital infrastructure at the local level is not merely driven by the need to catch up with central government programmes for online transactions in the cause of greater efficiency. Nor is it entirely induced by the devolutionary ‘letting go’ of top-down controls – a hesitant process that reveals great lack of imagination and inbred presumptions of local incompetence.

More than that is the emergence (though we still say it quietly) of municipal enterprise – the realization that local government has the clout and competence to play a vital role in creating economic and societal well-being. And, moreover, not cowed into silence on account of outdated and over-simplistic ideologies that would label Public=Bad and Private=Good.

Summoning the will-power to be so bold, Local Authorities are beginning to leverage their strengths – even where the outcomes disrupt the supposedly ‘natural’ order of things, like incumbent dominance.  Local leaders do of course need to ‘gather strength’ – not least because they do not get much comfort or assistance from national regulators who are mired in refereeing markets whose definitions are increasingly irrelevant at a local level.

In the context of ‘austerity’, there is thin cover in the search for ‘efficiency gains’ (AKA cutting costs) but the real motivations are to take ahold of the shambles and JFDI.  That is why there will be many more Gigabit Cities across the UK long before London aspires to join the 21st century.

Leadership strength is best applied holistically – and digital investment is but one (albeit enabling) part of local economic and community development. Those leaders who can grasp the bigger picture are unlikely to let go of the opportunity to deliver real benefit for local businesses and citizens.

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[1] Local Government and Broadband Policy in Australia: http://dx.doi.org/10.1080/10630732.2015.1073976

 

Holding the Line: fibre futures overstated?

7 Mar

In one respect at least Ofcom’s recommendations from its Digital Communications Review announced last week quickened the pulse of investors in future-proofed fibre infrastructure.

Fiber optics

Serious analysts described the moves as “a huge boost in helping the nation catch up with other countries’ increasingly advanced broadband infrastructures”. In media interviews, Ofcom’s Chief Executive Sharon White was keen to point out that UK had already achieved 2.6% penetration for Fibre to the Premises (FTTP) as an indicator of progress.

That 2.6% figure contrasted markedly with the report just seven days earlier that the UK had once again failed to reach the threshold of 1% penetration for inclusion in the European league table of optically connected homes and buildings.

Close inspection of Ofcom’s report reveals that the data was not Ofcom’s own assessment but relied on estimates by consultancy Analysys Mason – and, in turn the consultancy’s data supports a 2% UK penetration achievement in availability (not actual connections) of FTTP – a figure that compares unfavourably with Denmark (over 30%), Spain (over 60%) or Japan (70%).

So, discounting the quoted 2.6% figure (which may simply have been ‘over enthusiasm’), the 2% availability figure, if customer take-up were then estimated at 25%, would explain the difference between last week’s Ofcom-induced excitement and the previous week’s FTTH Council Europe disappointment.

Does this matter?

Supporters of BT’s Fibre to the Cabinet strategy and their plans for G.Fast would say not. What matters, they’d say, are not massive headline download speeds but sufficient capacity with which we can get along – leastways for the time being.   Others, of course, profoundly disagree – pointing to demands for symmetry, lower latency, future-proofing and an altogether better use of the UK’s energy supply.

There is another reason why the presentation of statistics matters.  Regulators – particularly those who would claim to be evidence-led – should surely be expected to present their views in ways that can be fairly understood by their primary audience, the citizens, businesses and public sector agencies on which the economy depends.

Ofcom’s outputs last week were greeted with mixed reviews – a welcome for clear intent on competitive Duct and Pole Access and severe doubts on the practicality and efficacy of such measures.  It is now for Ofcom rapidly to pursue their recommendations with renewed vigour – if only to prove that they were not misguided in stopping short of full separation of BT and its Openreach honey-pot.

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This article was first published by Total Telecom 07/03/2016