Tag Archives: regulator

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.

 

 

Advertisements

The Collaborative Economy – and digital themes for 2016

30 Dec

Computer Weekly has reprinted an article that I penned when considering NextGen and Digital Challenge themes for 2016.   It’s impossible to rank their significance but in top place I have the Collaborative Economy – collaborative skills being now recognised as a fundamental for all manner of ventures, community projects and public sector initiatives.

New metrics for capturing Quality of Experience will gain supremacy over the poverty of legacy QoS measures (see previous post 8/12).   That trend will inform regulatory efforts – not least in considering digital futures.  Much will depend on regulatory expectations of (and insistence on) corporate capacity to collaborate.  In many ways Collaborative Advantage will outplay old notions of  Competitive Advantage.

Open Data will also contribute to a richer 2016 – particularly in Health and in Municipal Enterprise.  Here again collaborative skills will fuel progress – and once again leave non-participants wondering why their grand schemes fail to deliver.  Under the spotlight of new evidence, Municipal Enterprise will, in 2016, become openly and honestly discussed.   The ‘art of the possible’ will no longer be assessed by an elite but liberated by data journalists and the shift towards more Open Corporate Data as enterprises begin to catch up with the public sector.

Fiber optics

And finally 2016 will be the year when the UK wakes up to the realisation that digital access infrastructure investment is much more than searching for quick fixes by trying to adapt legacy networks designed for analogue telephony.  Digital access design is significantly different – and the entire UK economy demands fresh (collaborative) future-proofed approaches.

Collaborative Qualities: shifting focus from the poverty of QoS to the honesty of QoE

8 Dec

3d image Benchmarking issues concept word cloud background

Market behaviour is easier to regulate when those markets are narrowly defined. Service value and worth, however, can only be understood in the broader context of user application.

As the sharpest regulatory bodies are so inclined, and Ofcom’s approach to broadband is in no way an exception, the narrowing of definitions, with an intense laser-like focus on the perceived performance of specific components, stands in stark contrast to the more complex perceptions of customers.

It is entirely legitimate, indeed required, that market regulators should monitor dominant players and act to correct deviation from acceptable standards. Hence recent interventions in UK insurance markets to ensure proper disclosure of price increases. Ofcom is similarly right to be concerned about any sign of lax standards in line provisioning delays, complaint handling or repair times.

QoS Poverty versus QoE Honesty

The familiar ‘Quality of Service’ (QoS) measures that supposedly underpin contracts are often, however, reduced to a commitment to ‘best efforts’ with some compensation leeway for the most egregious failures. Those QoS measures are for most consumers (business, public sector or domestic) for most of time, fairly irrelevant. What matters more is their Quality of Experience (QoE) – but to a very large extent those experiences are way beyond the ability of component providers or their regulators to assess.

Take, for example, the consumption of on-line video. The QoE will be influenced by the functionalities of diverse access/viewing devices and the adequacy of delivery networks in a complex compound of components where the consumer is primarily interested in the overall outcome. It is pointless having an optimal home WiFi network if the capacity of the serving broadband line is inadequate to stream BBC iPlayer radio without lengthy buffering delays.

This contrast between the relative poverty of QoS metrics and a more meaningful, some would say honest, approach to QoE is hardly new. Tennis fans are enriched by on-screen metrics of player performance in much the same way as football fans appreciate ‘balanced scorecards’ that reveal much more about the run of play. Car drivers are not unaware of engine and system performance. Who has not sent an error report to the software creator when the laptop has unexpectedly frozen?   Smartphone users willingly volunteer their device and cellular network performance to independent assessors like Open Signal and make use of such data when considering a new purchase.

Self-reporting Collaborative Qualities

The ability of product design teams to embed self-monitoring functionality is gathering pace (1) . Soon your new television will know and report the Netflix versus YouTube download times, the speed of channel switching, the latency of interactive gaming, audio and video glitches, packet losses and network congestion? And, moreover, attribute component causality for failings.

But all of this rich, and very real, QoE measurement is, until such time as it is routinely collected and analyzed, beyond the purview of market regulators and even further beyond the providers of narrowly defined components – even when those providers are trying to sell bundled services that compound both content and connectivity.

Organisational Collaboration

This is not simply a challenge for broadband providers and their market regulators – though one undeniably exacerbated by an unwillingness to provide future-proofed fibre unconstrained by the limitations of legacy copper.

Businesses of any type in any sector are increasing required to be collaborative. But how can one judge their current and future capacity to collaborate? Conventional indicators of chronic business instability – for example cash-flow constraints – are difficult for prospective partners, suppliers and clients to research and evaluate. The relative lack of Corporate Open Data, in contrast to Public Sector Open Data, is very gradually being tackled – not least via recent studies that showed how more Open organisations have less difficulty in attracting investment. (2)

This shift is, however, still seen as counter-intuitive by older business managers (and their legal advisors) who hold outmoded views of aggressive competitive advantage that do not sit comfortably with this greater need for collaboration. Meanwhile market regulators, who take a narrow view of their remit, pass up opportunities to spur their market players and investors towards greater openness and honesty. This is a recipe for increased regulatory irrelevance.

No place to hide?

Enlightened product & service designers will increasingly enable citizens and organisations to find value and worth in the context of their own application environments and also enable them to become evermore vigilant in the pursuit of component supplier failings.

Will market regulators be able to adapt to a more holistic view of consumer expectations and national imperatives?

Will regulators demand something better than QoS?

Or will the need for regulation be displaced by openly available and undeniable performance evidence?

__________

Notes:

  1. For example of converged benchmarking see Huawei Converged service panel_v0_20150907
  1. Corporate Social Responsibility and Access to Finance by Beiting Cheng, Ioannis Ioannou, George Serafeim :: SSRN

 

Hold or Flip, Twist or Quit: better connectivity hinges on investor confidence

26 Nov

There are pivotal periods of infrastructure evolution that are subsequently seen as revolutionary.

In the early 1980’s employers started grasping the notion of distributed computing.  Before those times computers were big expensive beasts.  In the late 70’s and early 1980’s there were diverse ‘mini’ and desktop ‘personal’ computer choices – with equally diverse Operating Systems.

hi=-tech buildingThe critical step into personal computing had little to do with technological progress – indeed some saw it as retrograde. It was almost entirely about legitimisation.  When IBM defined a PC Disk Operating System (later adopted by Microsoft) some feared it would bring chaos and confusion to their ordered world.  The worst of those unsettling fears didn’t materialize but the scope for ‘creative disruption’ was boosted.

Settling on a standard (albeit proprietary) backed by the global covenant of the IBM brand, created huge confidence for investors and businesses – legitimising what had previously been regarded as slightly suspect.  Moreover it exemplified the very best way to utilise brand strength in the global economy.  It must have puzzled many of IBM’s loyal employees at the time.  It probably qualified as an ‘unnatural corporate act’.  It certainly demanded inspired leadership from within their ranks.

The point of recalling this story is to contrast those heady times with today’s challenges for infrastructure investors.  Some, like Apple and Google, are not afraid to move on – never resting in pursuit of progress.  In the connectivity arena, however, some incumbents seem determined to keep the lid on progress for fear of corporate calamity and/or investor uncertainty.

In matters of online ‘eCommerce’ activity it is generally recognized that the UK has ‘got it’ big time.  That is to say the nation simply cannot get enough of it.  And therein lies the broadband rub.  Some cannot get broadband at all – even in the urban jungle of London – even at the old 2Mb/s floor.

From the mid-1960’s onwards the capacity of copper to cope with ever-faster data rates (whilst still being used for phone calls) has been remarkable.  But that technological stretch is now failing to keep up with demand.  In computing, IBM chose not to defy progress.  In broadband connectivity the big brands, not yet ready to admit the game is up, have built two defences.  Firstly they’ve adopted network designs that are difficult to unbundle.  Secondly, they’re leveraging their old networks by a very gradualist approach to fibre – unfortunately leaving sites at the end of long lines inadequately served.

Some attempt at legitimisation is evident – leastways from government. It may be reassuring for investors to know Ministers believe in getting better broadband.  Interestingly the PM’s recent ‘brave’ promise of a universal 10Mb/s broadband commitment is a massive challenge to incumbents and a great opportunity for future-proofed alternative networks with no legacy assets to preserve.  That message is fast getting across to local government leaders who’d rather see economic growth as an antidote to further austerity.

Pretty much everywhere the old question ‘how much capacity do they really need’ is derided. The question only existed because pre-fibre networks couldn’t cope.  There is now no doubt about market demand for properly future-proofed networks – but let’s not fret about past mistakes.  This is the time for fresh thinking.

Fiber optics

Fortunately, it’s also a time when all the old investment parameters are being reset.  The costs of doing the job properly have fallen.  The economic value of doing it properly has been recognised. The demand for doing it properly never greater.  The costs of borrowing never cheaper. Return on investment ever higher. The danger of living in the past never more evident.  Even the future for mobile services depends on kicking old addictions to legacy networks.  Astute investors are primed for the next wave.

To be fully effective, flipping would have been better taken at the flood but that moment has now passed and brand power is withered by dither and delay.  Establishing long-term expectations, national imperatives and investor confidence is complex but is now no longer the preserve of politicians or incumbents.

This then is a critical time for emergent leadership, investors and for the entire economy.

Regulators have previously understood their role in remediation of past market failures.  In the absence of any credible long-term policy objectives from government is it possible that the market regulator can choose to be more forward looking?

Investors routinely ask ‘Is this all I’m ever going to get?’   Can ‘market failure’ now, similarly, be understood (by the regulator) as inclusive of an apparent lack of imagination and any adequate sense of direction?   If so, how could that forward-looking viewpoint be used to legitimize and incentivize new competitive investment?

In Ofcom (and their Digital Strategic Review) we must trust.  The nation expects.

NextGen 15 and the growth of online platforms

15 Oct

The Call from a subcommittee of the House of Lords was just too tempting.

Their Lordships’ inquiry into online platforms was prompted by the European Commission – a classic legislative HoLresponse to mutterings that surely ‘something must be done‘.

But looking at the questions posed, it became clear that the great success of online platforms might be largely due to the fact that nothing much has been done.

There may be a case for consumer protection in a world of uneven comprehension but there is certainly little justification for market protection by over-egging regulation.

And, moreover, jotting down some notes for their Lordships’ committee, it became clear just how good the UK is becoming at this sort of innovation.  We may not be home to the Googles, Twitters or Skypes but we have no shortage of great examples of online platform innovation.

So it was too tempting – how could we not respond?

The NextGen Digital Challenge Awards – this year being presented in their Lordships’ House on November 5th – provides just the evidence they need to encourage lawmakers to desist from further lawmaking that might stifle our innovators and entrepreneurs.

For readers addicted to following the ways of Westminster, the full Call from the Committee  ( online-platforms-call-for-evidence ) will need to be read alongside the Groupe Intellex response to HoL subcommittee on platforms Oct 15

Alternatively, and far more fun,  you could attend NextGen15 on November 5th and/or the Digital Challenge Awards Dinner in the Peers’ Dining Room of the House of Lords – but hurry – registration for the latter closes on Monday 19th October.

Telecoms Regulator considers tackling the inherent dishonesty of most broadband services

26 Jul

[The saga continues – see previous episodes starting with Ten Eggs – Ed]

We have a responsibility:

for ensuring that consumers of broadband services are appropriately protected and informed”,

and,

transparent information around the speed most likely to be achieved . . . . should also be available to consumers before a contract is entered into.”

UP TO PLACARDWith those brave words the Telecoms Regulator in Ireland reported on a pilot project designed to discover just how difficult it is for broadband customers to be sure what it is they are being sold and what performance they can expect.

There are, of course, umpteen reasons, excuses, conditions, escape clauses and, for sure, a few honourable exceptions where some customers get almost exactly what it says on the tin.

And this was just a limited pilot project – so there’s ample wriggle room around sample sizes, the duration of the exercise, the customers’ own incompetence, the variable load on the system, unreasonable expectations, school holidays and, of course, the weather.

What they found was hardly surprising. What they think they can do about it is altogether more difficult.

So we know that:

  • rural areas are relatively poorly served,
  • some fixed lines work better than wireless (including mobile),
  • upload speeds are important,
  • low latency is increasingly essential, and
  • fully-fibred connections beat super-slow copper and fibre/copper combinations hands down.

More than that we know that we don’t know enough, but, curiously, most customers have come to expect poor service and only between 19 – 23% would say they were not satisfied.  Blessed are they who expected very little.

But what’s to be done?

The Regulator has a 4-point policy plan around:

  • Transparency for Consumers (Business and Household)

Consumers should be able to compare different broadband offers from different providers in order to choose between them – in regulatory-speak, ‘make informed choices’.

  • Consumer Education

Apparently we should all learn more about physics so that when we buy rubbish we know we are buying rubbish – even if the adverts suggest otherwise.

  • Contractual Commitments

Contracts should state how bad the service can be – though minimum service levels should not be set so unreasonably low as to provide an easy get-out clause for slack performers.

  • Market Information

There should be more of it.

And the bottom line?

 We should have great sympathy for any regulator of a market that specialises in services that are not honestly marketable.

This Regulator notes, “it has powers with respect to transparency and in relation to contracts and minimum quality of service and will consider how best to use those powers to achieve the best outcome for consumers.”

We should marvel at such restrained tolerance.

Meanwhile, like most comms regulators, the banner of Technology Neutrality is held high.  Well it sounds sort of fair, doesn’t it?

Surely ‘tis only reasonable to ensure a continuing freedom for connectivity providers to under-deliver in the profitable cause of sweating the assets they inherited from the pre-digital dark ages?

In any other sector, governments would intervene in their national interest.  Advertising Standards bodies would see red.  Trading Inspectors would rule against such local economic blight and outlaw such short-term get-rich fixes.

Why do we suffer this tendency of the telephonic tribe to serve up technological cul-de-sacs?

Why countenance their demands for subsidies from the public purse?

Do they, do we, imagine there is no alternative?

But, hey guys, that’s the market hand these regulatory bodies have been dealt.

And, if it’s not their job, who now will shift the infrastructure into 21st Century gear?

 

Three (UK) substitutes for five minutes thought

12 Feb

220px-levin-bbcWhen the late, great, Bernard Levin was writing in the 1970’s for The Times, he dismissed repeated calls for the return of capital punishment as just ‘one of the popular substitutes for five minutes thought’.  That phrase suggests he had in mind plenty of other substitutes worthy of his ire.

Now, more than two decades on from his passing, the death penalty that he might have raged against is the likely death of an economy where governance has lost its bearings.

There’s no knowing, of course, what ‘popular substitutes’ he would nowadays have selected for his brilliant brand of incisive criticism, but current fascinations with all things digital suggest at least three – these being prompted by the growing evidence of the economic impacts of infrastructure investment and the impending tsunami of data being unleashed by video technologies.

Read the full story

Written from #FTTH2015 Warsaw and informed by presentations from VentureTeam and Diffraction Analysis.

Presentation Press Conference FTTH Conference 11 February 2015

Graphic credit: BBC