Broadband Britain: Don't condemn us to the super-fast slow lane
Super-fast broadband should be attracting new buyers in droves, but it's not. Add to this the mismatched goals of the EU and the UK government and the long-term viability of the current plans begins to look in jeopardy
News that the UK is one step ahead of its EU counterparts in broadband rollout looks good at first sight, but it hides the fact that people aren't signing up for the higher-speed services.
Also, the government has not shared any plans it may have for bridging the gap between the EU's Digital Agenda ambitions and our own. Put these two facts together, and it becomes unclear whether the UK will be able to get to where it needs to be in broadband, even though it must make progress or risk being left behind economically and culturally.
Even at this stage in its development, broadband access is having an impact. Together with the online industry, it contributed £121bn to the British economy in 2010 — equivalent to 8.3 percent of the GDP, according to management consultancy firm Boston Consulting Group.
Its momentum also doesn't show any sign of slowing, as the same report predicts it will make up 12.4 percent of the UK's economy, or £225bn, by 2016. That would rank the broadband/online industry above construction or education in its economic impact.
At its current level, the sector accounts for around £2,000 in GDP per person. Super-fast broadband access brings in, and saves, money. It's that simple.
Given this, it was disappointing to hear that EU commissioner Neelie Kroes thinks that investment in the Digital Agenda is lacking across Europe.
"This attachment to 20th-century policy mindsets and business models is hurting Europe's economy," Kroes said on Monday, as the Commission released its Digital Agenda Scorecard report on how well countries are doing at closing in on targets.
"It's a terrible shame. We are shooting ourselves in the foot by under-investing. Europe will be flattened by its global competitors if we continue to be complacent," she added.
As the EU's Digital Agenda has set a target of 50 percent of European households signed up to packages of 100Mbps or more by 2020, the UK has quite a way to go in less than eight years. While BT and Virgin Media are rolling out infrastructure to deliver such ultra-fast services every day, their efforts aren't translating into actual customer sign-ups.
Super-fast broadband should be attracting new buyers in droves. But that doesn't seem to be the case.
We can cut Virgin Media and BT a break on this front, as neither has been widely providing a 100Mbps service for even a year yet. But the uptake of super-fast services — those in the 30-100Mbps range — is more worrying. Only 1.7 percent of people who can get these speeds have signed up for them, compared with an EU average of 2.4 percent.
While ultra-fast (100Mbps or faster) connections are relatively new in the UK, particularly for residential connections, super-fast broadband should be attracting new buyers in droves. But that doesn't seem to be the case.
For example, in its most recent quarterly statement, BT said around half a million customers had signed up to its super-fast Infinity service, which is largely underpinned by fibre-to-the-cabinet (FTTC) technology. As for Virgin Media, the company has said its co-axial-fibre service is now available to 10 million homes.
There are a couple of possible reasons for this. People could be reluctant to ditch a supplier in mid-contract and switch to a faster package, as this might incur fees. Or they may simply not know, or care, about faster speeds.
If it's the latter, and people don't know why they should be demanding reliable, high-speed access to the internet, then more education about the benefits is needed as soon as possible.
The future's... copper?
Just as crucial is what the broadband providers are doing to get the access in place. If the UK could build a countrywide fibre-to-the-premises (FTTP) infrastructure, this would remove at a stroke any concerns about reaching EU targets.
However, BT — the incumbent broadband infrastructure owner — recently said it has no plans to stop rolling out copper technology any time soon, as it believes its fibre-to-the-cabinet (FTTC) can be eked out to provide speeds of up to 300Mbps.
The problem is that the performance of copper cable degrades the further you go from the cabinet. Rural locations in particular would be left as isolated as ever in regards to broadband. It might bring incremental increases — a bump from 0.3Mbps to 3Mbps, for instance. While this is likely to be welcomed and significant to people living in remote villages, it won't bring the UK much closer to the EU goal of 30Mbps for everyone by 2020.
By comparison, the UK's own aims are for 2Mbps for everyone in the UK by 2015. The government has not revealed its plans, if any, for making up the discrepancy between these goals.
It's hard to see how the UK's amalgam of broadband upgrades and schemes will provide a long-term solution to the problem of high-speed broadband connectivity. What we need is a coherent plan from the government and regulators. Time is running out.