By Peter Cochrane, 17 October 2005 14:55
COMMENT Written from a location that looks like a little bit of heaven, with really high-speed access just outside Agios Nikolaos, Crete. Copy dispatched by free LAN at 2Mbps.
Recently I have attended one conference or function after another where it has been stated that the UK is leading the world in the broadband revolution. Apparently we have the deepest penetration and more people online per capita than any other nation.
However, my travel experiences would say otherwise, and so I decided to investigate. First of all it seems that anything that is always-on and faster than 128Kbps qualifies as broadband in the UK. Second, asymmetric services also qualify. Third, government statistics seem to focus on service availability rather than actual physical connections. Aha - I think we have it!
Looking at all the information sources I can locate online, it seems the UK fits into the world scene as follows: by households online: around 15th; by population served: around 18th; by growth rate last year: 14th; by lines added in 2004/5: fourth; by total lines per capita: sixth. The only way I can get figures that get the UK in the top three is to look at the potential number of homes and offices that could be connected should they choose to be so - as opposed to those that are actually connected.
The clearest UK government definition I can find for broadband accounting is as follows:
The government's target is for the UK to have the most extensive and competitive broadband market in the G7 by 2005. The DTI measures the UK's progress every six months based on an index developed jointly by government and the Broadband Stakeholders Group (BSG). In 2003 the UK government reported on the UK's progress based on:
1) The extensiveness index, which combines coverage and the addressable market, the UK moved up to third equal with the US.
2) The competitiveness index, which measures choice, price and regulation, the UK was ranked third.
3) The take-up index, the UK was joint sixth in the G7 with Italy.
So still not number one in 2003 then but in 2005 lots of claims to be at the top of the G7 stack! Is this a travesty of political weasel words and fumbling, or a reasonable view of reality? Pre-1990 broadband was defined as 2Mbps and above in the UK. But post-1990 it had been watered down by a factor of 16 to 128Kbps.
At this point I am reminded of an old adage from my student days: 'Governments tend to use statistics much as a drunk might use a street lamp - more for support than illumination.'
But it gets much worse! Apart from the asymmetry that typically sees 512Kbps downstream (from ISP to the customer) and 128 to 256Kbps upstream (from customer to ISP), there is the small matter of sharing. It is not unusual for between five and 15 (or more) UK customers to share a single port. Ergo, the actual rates presented can be one-fifth to one-fifteenth of the 128 to 512Kbps speed - and therefore a fraction of a typical dial-up connection. Indeed, some customers have complained that so-called broadband services have been so slow they have reverted to dial-up as their primary service.
So what are the real leaders of the pack doing? Well, to find out you have to visit southeast Asia and look at Korea and Japan. They started at 10Mbps as standard, then quickly moved up to 50Mbps, and are currently rolling out 100Mbps. And what are they planning? How about a 1,000Mbps rollout by 2010? And best of all, by law, the advertised rate has to be supplied to every customer - there is no sharing so no dilution, just a 'fire hose' of bits. In fact they really do have a broadband service!
What, I hear the G7 telco executives asking themselves, would people do with 10, 50, 100 and 1,000Mbps? This, by the way, has been a question they have been asking continually since the first 9.6Kbps modem was rolled out some 25 or so years ago. The answer of course is that it's none of their business. In the same way the water, gas, oil and power companies supply their atoms for our use without question, so should the network companies supply bits! But the real answer is: everything - radio, TV, games, internet, email, video-on-demand... you name it.
Why don't we do more of this in the UK? Simple, we don't have any broadband to speak of - just a watered-down (or narrowband) trickle of bits that just about lets us stumble around the net and communicate by email. The real online revolution has yet to hit the UK and much of the G7. Until the politicians actually use the technology, their assessment of reality will remain cloudy and disconnected from the economic reality.
Saddest of all - what they really don't seem to understand - is that the future economy of the G7 as a whole is largely governed by the rate of true broadband rollout and the ensuing creation of new businesses around that base. The UK's lead in the computer games and animation market has already been lost to southeast Asia because of the lack of broadband connectivity. The next big losses may well turn out to be those dependent on distributed and/or grid computing. If so, this will impact some of our biggest earners in pharma, medical and aerospace. To say the least, we don't have much time, and we don't have broadband!
Comments
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1. Steve Berry
Excellent article - well done.
UK's broadband infrastructure is shoddy to say the least.
Unfortunately, that then manifests "punitive" issues on the end-user ( download caps / shared connections at the ISP end - as you rightly pointed out etc... )
I have difficulty in seeing how that situation will change in the foreseeable future.
Starting with "short-term" objectives at the top, only leads to longer term-issues / fragmented infrastructures.
As usual, the (relative) lack of investment / longer-term strategy ( or lack of one ) is arguably the root of all of this.
2. Simon
Trying not to just bash BT because we can, I think they must take a lot of the blame - though probably more so teh regulators who have failed to properly control them.
BT have a dominant position - in most areas a virtual monopoly. Until very recently they did have a monopoly of supply in many areas simply because LLU didn't (still doesn't ?) have a viable business case. Therefore many people have no choice - they take a BT broadband line badged by whatever ISP they choose. With that comes whatever restrictions BT chooses to impose.
You don't need to remember much of your telecoms business to know that time and time again, what we have gratiously been allowed to have from BT has often been a watered version of what other countries have to offer - and the main point people have made time and time again is that many of their marketing decisions seem to be based on doing as little damage to their lucrative leased line services as they can get away with. ISDN - no D channel signalling for ages, and when it does come it's in a form that makes it uneconomic for many uses. Broadband - limited uplink speed, contention, and no SLAs, all designed in part to make it inferior to a leased line.
Now BT are a business, and you cannot blame them for wanting to maximise their profitability - and that is the problem. For far too long, we have been in a situation where some pretty serious decisions have been made for the good of BTs shareholders and not the good of the country. All this with just about nothing done by the regulator or government to control it.
3. Michael Turner
Interesting to see what the UK is doing. (And saying.) Here in Canada, latest stats show that about 73% of homes have internet service, and 50% of homes have DSL or Cable broadband, which would equate to 67% of users now being on broadband. There is vigorous competition between the Telcos and Cable industries, and though our definition of "broadband" tends to be somewhat flexible, my cable service is probably representative --- I'm routinely seeing downloads of between 2Mbps to 3Mbps, and as low as 500Kbps from some slower sites. And I get always on unlimited use at $38 Cdn / month, or about 16 pounds sterling if my calculator is right. Incidentally, we also now have broadband internet available throughout all but the high arctic via a new Canadian direct broadcast Ka band high power satellite. This is an option for those in deep rural areas that can't get cable or DSL service. Though it's almost twice the cost.
4. Richard Sarson
In the UK, promise and reality are poles apart. My Telewest connection is supposed to give me 10mbs download. I tested ii just now, and all I am getting is 1.1mbs. And I am paying £35 for the privilege.
By the way, I do seem to remember that Peter worked for BT throughout the period when Canada and other countries ramped up their Broadband offerings, which BT was loath to do, because BB threatened its investments in ISDN (128kbs). So, Peter was part of the problem.
5. Richard
How many have trouble-free broadband?
A disturbing number of people seem to have endless problems with their broadband services: ISPs blaim BT; BT blaims ISPs; customers lack service.
Often, the "local loop" is in poor repair so even "local loop unbundling" will not resolve the problems.
Somehow, BT needs to improve the maintenance of its local network: We've often been assured that our phone line is testing OK, even when the BT cables are broken!
Until "broadband" reached our village, we had reasonable dial-up internet speeds. Since then, the speeds have dropped to less than 28.8kbps. We've now discovered that without telling us, BT had suddenly connected our phone line to a line sharing device, halving its capacity. (But still charging the full rental!)
Despite all EU and UK regulations, BT staff insist that their phone lines are for speech only, and are not required to carry internet traffic.
6. anonymous
Agree! However the cost of UK "Broadband" was not laughed at emphasized or investigated enough!
7. Soren Bergmark
I have been bilding Broadband to villages around The City of Pitea in Sweden. This is true Broadband. Singelmode fiber to the home 100Mb/s. Each village is connected with 2GB/s to the central node. This should bee used for TV, Internet surfing and IP-telephony. For about £20 a month you get a Internet connection with up to 10Mb/s. Anything less then 5Mb/s is "slowband" and is available to most homes by DSL technique.
8. anonymous
Come on we all know it's not in the Telco's interest to provide the level of service they're providing in Japan.
It's got to be cheaper and more lucrative for them to sell you 1mb 2mb and 8MB lines with capped usage for up to £40 a month than it is to flood the market with Gigibit services that would also kill their lucrative leased line business in one fell swoop. We can't rely on competition because, even though we play at it, having competition through the farce of BT selling wholesale products through ISP's (let's see who can sell the same crap service for less). It's still coming through 60 year old BT copper.
The real competition should be coming from the Cable companies who despite digging up every pavement in the UK through most of the nineties still haven't provided a serious competitive infrastrucuture to the BT network. We need a least one other company to provide a backbone that competes with BT's monopoly and that can provide wholesale services on a similar scale. BT new IP infrastructure sounds promising but realistically when are SME's and home user going to see the benefits of that except at a huge premium.
The government needs to step in, but judging by the 3G license auction (that put 3g services back by 5 years ) they haven't really got a track record of encouraging innovation have they? Wouldn't it have been better to have given the contracts to companies who gave the best deals to consumers and business. A lesson the government should learn maybe when thinking about fixed networks.
9. gaijin
last time I looked, neither Korea or Japan were in South EAST Asia. However, broadband availability in two Asean countries - Malaysia and Singapore - is far superior and cheaper than the UK.
What is also totally lacking in the UK is broadband content so consumers are forever going offshore, which is of course more expensive for the ISPs to provide. The difference about Japan and Korea is the majority of internet traffic stays inside the country.
10. Lindsey Annison
Peter will be delivering the keynote speech at the Access to Broadband Conference on 22nd November at CityPoint in London. The "BroadbandEndGame.com" is raising precisely this issue and challenging Government and industry about the hype, as well as discovering what we can do about it by looking at best practice from around the world.
Your input very welcome - come and have your say. This is not a speaking heads conference - it may well be more active on the floor as we are having problems getting speakers from Government departments who don't seem to grasp the issues raised in Peter's article.
11. Steve Berry
Richard - slightly OT - but if you're supposed to be getting 10MB downloads then you should have a 100MB connection. There's roughly a 10:1 ratio between connection speed/effective download speed. So the figures you reported are probably correct in the context of what you're paying for, unless BT are offering a 100MB service.
12. anonymous
Japan did not start with ADSL at 10Mbits/s any more than UK consumers share a port with 5 to 15 other users, these are just plain factual inaccuracies.
UK ADSL circuits routinely deliver>90% of their headline advertised speeds.
Nice rant otherwise. So why are companies not investing in these higher speed services in the UK? Did the market provide them in Japan & Korea, or was it publicly funded, or did the Govt force their provision by regulation.
13. chris
Really? obviously not, your report sounds more like the truth than anything I have read previously. To quote from your report:
"Until the politicians actually use the technology, their assessment of reality will remain cloudy and disconnected from the economic reality".
I think you have hit the nail on the head. They don't use it, they don't understand it, their PA's or secretaries might know more about it, but they have no idea of the world outside, they don't know the problems of ordinary people and businesses, (especially in rural areas) Politicians, funders and decision makers are advised a lot of the time by the wrong people and they don't realise this.
I heard the chairman of a global company state yesterday that the village he lived in was supplied by carbon fibre and he really enjoyed the benefits it brought - (he is on a 512kbps aol account) - he has no idea that the towns and cities in this country have far more, or that other countries in the world have megatimes more, and he will never EVER get more than 512 where he lives, and in fact is lucky to get that.
Hope this debate continues but I know nobody can prove you wrong...
...you are right
bet the end game will be fun.
chris
14. Donald Ranasinghe
I am very pleased to have read your excellent article. You have done a great deal of research to get to the bottom of 'UK's big claim' of being the broadband leader.
I didn't know where to put my face in shame at a world broadband forum in London 2 years ago. Far East has over taken broadband penetration into all communities than any of the European countries and the US.
UK did not have a visibility at all worth noting in the list of dynamic broadband providers in the world. Broadband is not just for the economic growth of the country. It should be cheap enough to provide a decent education for the less well off. Free online educational courses are available from many US, Korean and Japanese Universities, but not in the UK. I ask myself why cannot this happen in the UK ?. The simple answer that comes to my mind is that there is no vision for the future genrations in the UK.
If company profit is what prevents this from happening, then government should step in to make it happen.
When I raised this question at the world broadband forum in London, not a single European broadband provider had a satisfactory answer.
UK will sit and boast and others will lead the way ahead.
15. David Harrington
Right on, Peter! CMA has been criticising dodgy stats and "wide narrow-band" mentality for the past 2 years, including a submission to a PITCOM meeting in May last year. On the downside, BT is still "trialling" 8Mbps - the Japs moved on past this back in 03. But maybe the most hopeful statistic is the catch-up rate. At least Ben Verwaayen doesn't hold the same views on broadband rollout as his predecessors - he's put some umph behind it, and Ofcom has thrown the old Oftel pussyfoot approach to unbundling out of the window. What price an upgrade to the USO?
16. Peter Cochrane
RE: 'By the way, I do seem to remember that Peter worked for BT throughout the period when Canada and other countries ramped up their Broadband offerings, which BT was loath to do, because BB threatened its investments in ISDN (128kbs). So, Peter was part of the problem'
Peter was working his tail off deploying fibre to the home at less than the cost of copper in 1986 - and I have to say - failed to win against the dark side of the force! Sorry - I really tried! - Peter
17. Peter Cochrane
No - they started with a huge fibre to the home investment - right off the bat they could see the potential!
18. Tony Parkin
One of BT's greatest political 'successes' was persuading the regulators in the moving of the broadband goalposts! In the year 2000 broadband meant at least 2MB till the marketing moles started burrowing. But I do remember that Peter was on the 'light' side even then - so it does seem unfair to accuse him of being part of the problem!
Keep on telling it like it is Peter....
19. anonymous
A seriously flawed and mis-reprentative view of the Industry and technolgy. We are already offering Gig Ethernet connections today. And for those that need it the cost are trival compared to the bsuienss need. Your just bitching because we wont give you an uncontended, unmeter Gig link with free install and under £15 per month.
20. PGS
Although thought provoking as ever, Peter Cochrane's article does not adequately acknowledge the progress which has been made in the UK in the past 30 months.
I suggest that the jump from POTS to Always On ADSL has greater significance than the much anticipated further evolution from the 1 or 2 Mbps available to most of us today, to 8 or even 20Mbps in the foreseeable future.
Although BT were undoubtedly (extremely) slow off the starting blocks, the eventual roll out of the UK's current modest ADSL (& cable broadband) services to around 5,000 exchanges (& over 80% of UK households) has actually been pretty rapid by any standard.
It is to be hoped that BT will now continue the evolution to a true broadband service at a similar pace.
21. Peter Cochrane
Excellent - you choose not to identify who you are - and you make my case for me brilliantly in one word - contention! Many thanks, Peter
22. Peter Cochrane
Not according to my data, experience and experiments and thos of others - unless you mean at 03.00 in the morning! Peter
23. John Lucas
So what is the solution? The real problem is surly that running fibre to the home (or kerb) will cost billions and whoever does this (presumably BT or NTL) will need a reasonable chance of making a return on the investment, i.e. Ofcom not forcing prices down for political reasons.
A good analogy is gas: When I was young British Gas changed the whole country (well people in towns anyway) over to North Sea Gas. Every home in each street had to be surveyed, their appliances adapted and switched over on the same day. I presume at the same time the distribution network had to be switched over as well. A large gang of fitters descended on each town to do all the work. BT could do the same, street by street, town by town replace the copper with fibre, fit a new CPE in each home and thereby efficiently switch the country over.
Note however: 1. Gas does not reach rural areas because it does not cost in.
2. British gas has a monopoly so knew they would get their money back
So how do we move forward? The economics depend on how many people in each street will take additional services, how much they will pay over the next 5 – 10 years and whether BT will be allowed to charge enough to make it worthwhile. The much higher take up of the internet has greatly improved the business case however how much extra will the average home pay for 20M plus broadband? To make it fly you have to tempt a good number of people away from Sky and I don’t suppose Mr Murdoch will let that happen very easily. Finally the Government have to step in to guarantee they won’t change the pricing rules so at least one significant variable is removed from the equation.
Thanks for a very interesting article.