The new FTTH/B ‘panorama’ is based on September 2019 data collected via network providers and regulators in each country.
Our full report – including a graphic of the table – can be found via ‘Plodding Partners Leave Basecamp’ on the Medium platform.
In ‘Feeling the Heat’ I describe the green boxes that deliver an apology for broadband as ‘pavement heaters’ – not least because Roadside Radiators might seem just a little harsh.
At the same time it seemed worthwhile explaining why they appear always to be warm, even before they are baked in the sun.
But, however described, these green boxes qualify as rather poor ‘installation art’ – self-demonstrative (and, frankly, boring) monuments that disqualify their owners from any future role as a contributor to economic and social sustainability – or, as Greg Mesch (CEO of CityFibre) would say, lacking ‘the vision, passion and determination to succeed’.
Aided by the Advertising Standards (?) Authority – the folks who misheard ‘Full Fibre’ to be Fool Fibre or Faux Fibre – and Local Authorities for whom the digital dawn has yet to outshine the telephonic twilight – the once vital incumbent has lost the plot.
But, at least homeless souls will have warmth next winter as they shelter next to those green boxes.
And the Winners are . . .
[Westminster, 23rd October 2017]
Announcing the results of the UK’s 7th annual NextGen Digital Challenge Awards, Iain Stewart MP (Chair of the All Party Parliamentary Group on Smart Cities) congratulated the finalists for this 7th year of the NextGen Digital Challenge. In his address at the Awards dinner in Westminster, Ian Stewart summarised the progress being made in Parliament on the policy framework for a range of ‘smart’ initiatives including the advent of driverless vehicles.
Following Iain Stewart’s address, Richard Hooper (Chair, Broadband Stakeholders Group) and Derek Wyatt (Chair, Foundation for Information Society Policy) presented trophies to the winners across seven categories of digital endeavour.
The NextGen Digital Challenge Awards programme celebrates great projects. Every year the awards are adapted to reflect current trends and priorities in digital application.
Whether in Public Service Transformation, development of Digital Skills or new initiatives in Place-Making, these projects illustrate the wealth of creativity and innovation evident throughout the UK economy.
More than a focus on individual leaders, most inspiring developments are the work of collaborative teams who strive to ‘do things differently and do different things’ — innovating to overcome the inertia of established custom and practice.
The Awards Dinner in Westminster also heard former MP Derek Wyatt describe the plans for the 2018 ICF Global Summit in London next June. This 3-day event will bring civic and industry leaders from around the world to celebrate the development of Intelligent Communities.
Digital Challenge Awards Co-Founder, David Brunnen, also thanked the 2017 Judging Panel for their great work in assessing more than 30 shortlisted finalists each with their diverse Challenges, Solutions and Achievements.
2017 WINNERS
Public Service Transformation Award
Winner: NHS Education for Scotland @NHS_Education
2nd Place: Council for Curriculum, Examinations and Assessment @CCEA_info
Digital Skills Award
Winner: Armagh Banbridge Craigavon Borough Council @abcb_council
Joint 2nd Place: Arch Commercial Enterprises Ltd and Young Enterprise East Belfast @YE_NI
Innovative Projects Award
Winner: People Plus with Mendix @peopleplusuk @Mendix
2nd Place: CAST Fuse Digital Accelerator @TechforgoodCAST
Place-Making Award
Winner: Broadband for the Rural North (B4RN) @dig2agig #yorkshiredales
2nd Place: Good Things Foundation @goodthingsfdn
Digital Health Award
Winner: Driver & Vehicle Licensing Agency (DVLA) @DVLAgovuk
Joint 2nd Place: AHP Suffolk @AHPSuffolk and NHS Education for Scotland @NHS_Education
Networking Innovations Award
Winner: HATDeX — The Hub of all Things @TheHATDex
2nd Place: JT (Jersey Telecom) @JTsocial
Connected Britain Award
Winner: Diva Telecom @DivaTelecom
2nd Place: Tiree Community Development Trust @HIEScotland
[THIS RELEASE WAS UPDATED 25/10/2017]
___________
Notes for editors:
Further information and photographs available via davidb@nextgenevents.co.uk — +44 (0)7714 325 657
About NextGen
NextGen (NG Events Ltd) has supported digital innovation and sustainability projects for over a decade with a series of conferences, workshops and exhibitions to give voice to innovators, new network designers, applications developers and community builders. http://www.nextgenevents.co.uk/awards
About ICF
The Intelligent Community Forum is a US-based Research Think Tank with an international network of 159 cities and communities. Their research has tracked the evolution of inspired local leadership and the economic and societal impacts that flow from investments in digital infrastructures and their application to community needs. http://www.intelligentcommunity.org
Localism is the proactive administrative, economic and societal empowerment of places and their people. Across the world it is a force that battles against the natural centralist instincts of national governments.
Some societies are comfortable with federal structures that allow degrees of local independence. Others, more centrally directed, are far less tolerant of local deviation. At this time the UK is rapidly discovering that greater localism is a key to future international prosperity.
This shift towards stronger, more-empowered, local leadership has many champions across the political spectrum – and they are supported by many public and private actors.
Opposing these champions are the massed ranks of established national forces and major utilities. They worry that fragmentation leads to a loss of control, a slide towards fiscal indiscipline and greater complexity. Trust and experience in a common cultural adherence are key issues – defining a sense of identity.
But, while the shift has been debated for years as an issue in domestic politics, it is international trade that drives the more recent place-making emphasis. Localism is a global issue.
At this time when the UK national government is entangled in disentanglement from the European Union, central policy developers (with their dependence on macro-economic approximations) are painfully aware that their science is largely based on the aggregation of many local economic communities each with diverse needs and priorities.
Onto this stage now enter the long-promised metro-mayors and cities emboldened by new concerns for life after Brexit. Add in some fracturing of old political orders and the scene is set for a considered reordering of governmental structure – or possibly opportunistic power plays.
At its best Localism is about people and places. The people comprise residents, visitors and commuting employees. Businesses may create jobs, pay local property taxes and have expectations of local infrastructures but their employees, often commuting from far and wide, have no local democratic voice where they work. Heavily dependent on the redistribution of national taxation, Local Authorities are reduced to insignificant branch agencies with occasional competitive battles to adjust some funding formula that rarely reflects local priorities. Some places are sufficiently enlightened to spend public money predominantly with local suppliers – thus investing in greater local money circulation before it is syphoned away to big brands and Treasury coffers.
Local levers of power are minimal and this frustrates local leaders whose citizens expect them to promote local economic and social well-being. Woe betide, however, those places that fall markedly below common (nation-wide) expectations and risk outraged complaints of ‘Post-Code Lotteries’ and Daily Mail headlines.
Yet we know that some places are more successful that others. Some places seem to attract inward investment in ways that others do not. Some seem able to retain and employ their young people whilst others see only a drift away from home. Some places have a track record in creating new types of employment but others never recover from the demise of old industries. Some seem destined to be losers and never manage to catch the funding streams.
But we also know why some fail where others do not. Some attribute the differences to location, weather, historical accidents, insensitive policies or outmoded formulaic funding rules. Some places have been over dependent on outmoded industries and have not seen far enough ahead to plan a different future. But, most of all, the performance variations come down to the quality of locally collaborative leadership.
This much was recognised by Lord Heseltine’s Local Enterprise Partnerships – bodies that were, alas, quickly dominated by big-brand placemen – public or private. Fostering collaborative and constructive local leadership takes years – way longer than electoral cycles. And it demands a real understanding of local ecosystems.
All that was known and understood way before creation of the European Union. Pre-dating that by several hundred years, cities across northern Europe created the Hanseatic League – a trusted trading network that enabled deep relationships, economic wellbeing and cultural confidence.
The Hanseatic League still has echoes in modern times; embedded in an airline name and in the Business Hanse – an active network of enterprises seeking deeper cross border trade. UK cities, mostly facing the North Sea, very clearly understood that confident trading needed much more than a simple market – it demanded trust and whole community support. And building on those formative experiences the ‘new’ place-based strategists can understand why some communities succeed where other decline.
This is is why, instead of just puzzling over raw economic data and demographics, successful communities are now being assessed on the deeper quality of local programmes that cut across the top-down sector silos. Creating and sustaining a range of these initiatives requires long-term dedication and a spirit of willing community collaboration – from schools to hospitals, from transport providers to colleges and universities and, vitally, full engagement with really local small business ventures. Hence the recent calls for greater recognition of local business/community responsibilities.
All that, of course, would be helped by a central government that saw its role as an enabler, nurturing local differentiation, instead of a state supervisor determined to scold any local experiment that falls a little short of the lowest common denominators of cost-constrained public services.
All this we know from the evidence of hundreds of places around the world that have defied expectations and breathed new life into their communities. Building on capabilities that leverage the Smart’ technological enthusiasms of major cities, we are now seeing recognition of a newly empowered breed of ‘Intelligent Communities’. Some achieve this because, simply, “we’ve had enough” and others through inspired local leadership – but, crucially, all are making a name for themselves on the global stage.
It’s a puzzle for sure when we have an abundance of ‘fairly average’ national economic data but very little local data granularity to enlighten aspiring city leaders.
So when the central ‘industrial strategists’ scratch their heads and our political classes try to imagine how to recover from natural disasters or self-inflicted wounds, this time, we’d hope, the old sectorial orders must be refashioned – supplemented and overlaid with place-based and inclusive, locally-led, economic and societal nutrients. Tolerance and flexibility for their encouragement from the top down will (or should) seek accommodation with local homegrown energies.
______
This article was written as a discussion paper for the Global Summit Steering Group 2018.
To cynics the notion of changing what counts, and what is counted, is a classic goalpost-shifting exercise. From the top-down perspectives of macro-economists, barring a few definitional disputes, the numbers revealed by, say, VAT returns are solid. On the other hand, anyone rooted in the economic and social behaviors of local communities observes an extensive colour-chart of micro-shades. Both, however, would agree that, whilst artistically fashionable, citizens and their clustered communities could do without those distressed finishes.
As searchers for new growth strategies loudly sing cuckoo, Whitehall’s acknowledgement of the shortcomings of sectoral economics has been a long time a-coming in.
Call it devolution, call it empowerment, call it subsidiarity, call it place-making, call it Inclusive Growth, Municipal Enterprise or Regionomics, but whatever way you call it there’s no denying that economic growth and social development cannot be commanded from on high but must be created through local leadership.
That much, of course, was foretold by Lord Heseltine and his LEPs, The RSA’s City Growth Commission, the champions of Metro-Mayors, endless analysis by the Centre for Cities and myriad reports that sit uncomfortably with deep-set post-80’s dismissal of Local Authority competencies. And austerity certainly didn’t help the Northern Poorhouse.
But this new place-based impetus is not now an optional ‘nice to have’. The Brexit notion of tearing up the book, throwing the pages in the air and seeing what could be done with the pieces heralds a remarkable opportunity to do things differently and to do different things. Whitehall may not yet be entirely convinced and parliament may resist a more federal diminution of their imagined importance but, glory be, the people have spoken.
What is needed now is a clear understanding of how to better nurture place-making, local economic growth and community development. There’s no shortage of ideas that are soundly based on experiences from around the world.
Of course there’s a shortage of local data evidence – but no shortage of imagination. Some cities and communities prosper whilst others decay. It’s not difficult to understand why. Assessing the fabric of local economies means taking account of cross-cutting programmes that bind those vertical economic sector silos together. The priorities may vary to match local needs but local leadership needs a plan.
So, as summer is a-coming in, we say ‘blessed are the place makers’ for they are inheriting the opportunity to build a better future.
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.
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.
________
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.
If 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.
Higher 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.
A 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.
Like 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”
_______
Graphic credit: Steamcar.com
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.
Groupe Intellex 