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Lack of 'killer app' stalling fibre rollout

Without greater investment in Britain's broadband infrastructure, the UK could be put at a disadvantage, but drivers for change are still to emerge, say observers
Written by Natasha Lomas, Contributor

UK web fans could miss out on the "next big thing" on the internet if serious money isn't thrown at the nation's broadband infrastructure.

That's the warning from Ian Fogg, research director at JupiterResearch Europe, who was speaking during a Westminster eForum debate on the future of broadband in Britain.

Without investment to improve broadband infrastructure — such as fibre to the home (FTTH) and fibre to the cabinet (FTTC) — Fogg said the danger is "the next big thing on the internet may not work in the UK".

But, even so, Fogg admitted that the business case for fibre is "incredibly hard" as the market has seen a slide in the average price for broadband over the last few years and consumers don't see why they should pay more for fat-pipe access.

All-IP next-generation networks (NGNs) are being rolled out in the UK — such as BT's 21CN — but NGNs do not solve the problem of legacy copper wiring at street level, from exchanges to cabinets and homes — an issue known as "next-generation access" (NGA). NGA is the fly in the ointment of faster broadband in the UK.

Antony Walker, chief executive of the Broadband Stakeholder Group (BSG), told delegates the prospects for early investment in NGA are not good. But he said this is an issue that is likely to trouble small businesses before it annoys consumers, as SMEs might feel they are losing a competitive edge for accessing and competing in global markets where fibre deployments have — or may — outstrip the UK.

Consumer demand for upgrading the UK's broadband infrastructure is less clear cut, Walker said. This point was echoed by Ofcom executive Peter Phillips, partner for strategy and markets development, who said there is still "a lot of uncertainty" about how long current broadband networks will deliver what consumers need.

The speakers at the eForum touched on various applications — from videoconferencing to greater opportunities for home working to the rise of social networking and even the BBC's iPlayer — that might benefit from improved broadband infrastructure. But the general consensus was no "killer app" for NGNs has yet emerged.

JupiterResearch's Fogg said: "No-one has yet identified that unique application that can only be delivered over next-generation broadband."

Ofcom's Phillips added that there may even be some advantage to the UK holding back on broadband development — to see how things pan out in other countries and learn from their experience. The regulator is currently consulting on NGA.

The stance of the network operators was summed up by Andrew Lazarus, head of regulatory policy and strategy at BT, who said the company "does believe we can get a lot more out of copper".

Lazarus cited ADSL+ — coming next year, with top speeds of up to 24Mbps — and said speeds would still "satisfy a lot of apps". Issues such as broadband "not spots" — areas not currently served by fat pipes — and headline speeds are "not necessarily part of the fibre debate", according to Lazarus.

Lazarus added: "We shouldn't minimise the disruptive potential to consumers of mass change to fibre."

When it comes to fibre investment, operators have to take a much longer-term view, said Matt Yardley, principal consultant and head of the broadband group at Analysys — something which he said they find "unpalatable".

Another speaker — Andrew Heaney, director of strategy and regulation at Carphone Warehouse — suggested that sharing the cost of investment in broadband infrastructure between various interest groups, such as private-equity, consortia and infrastructure players, could be one way of driving broadband in Britain forward.

There's also likely to be a role to play for government in terms of subsidies, according to various speakers, especially when it comes to ensuring next-generation services reach rural and less densely populated areas, in order to avoid a new digital divide opening up.

The BSG's Walker added: "How worried should we be [about the future of broadband in the UK]? Not so worried that we make rash choices, but worried enough that we do some hard thinking about next-generation broadband."

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