A manifesto for broadband Britain after Brexit

A UK general election has been called for June. How should the next government approach the issue of broadband policy? Which way does the future take us? I offer some tentative answers…

The information economy era has arrived

The UK faces a challenging transition ahead from being part of the European Union to occupying a more globalist outlook and position. Our future will depend partly on how we engage with what is being called “the fourth industrial revolution”. The world has already progressed through ages of steam, electricity and oil, and now information is the key resource. All industries and economies are being reshaped by the converging forces of pervasive sensors, autonomous robotics, virtual reality, machine learning, nanotechnology, smartphones and wearables.

The UK’s future wealth and prestige will require us to develop market sectors both as producers and users of these innovations. As such, this merging of the physical and virtual worlds puts digital infrastructure under the spotlight, notably fixed and mobile broadband network access. It also requires suitable computing platform capabilities placed into people’s homes, schools and offices, together with centralised data centre facilities to form complete digital supply chains.

There is an infrastructure capability deficit

The mailbags of politicians are filled with many and varied concerns, yet few can have failed to notice the widespread dissatisfaction at the experience being delivered by broadband and mobile companies. This is despite having strong investment, competent regulation, enlightened policy, and vigorous competition. Today’s applications face significant delivery problems, and tomorrows are far more demanding.

The broadband industry is a new and immature one, yet has already gone through two policy phases. The first focused on the delivery of basic coverage, and the second on the increased capacity of the system. To meet the needs of both present needs and readily foreseen future ones, we need a third phase that grows capability. This raises technical issues like service quality, assured performance, system security, plus fault resolution; and economic ones, like vertical integration, wholesale access pricing, and retail service choice.

The current government’s policy approach to these issues is to focus development on two tangible and important technology areas: 5G and fibre access to the premises. These are both valuable and necessary contributions, but are not in themselves sufficient. Just as how water can leak from utility pipes, value can ‘leak’ from digital infrastructure through the ways we chose to engineer the network ‘pipes’ and their ‘joints’ and ‘taps’.

A policy change to a demand-led model

A third ‘f’ needs to be added to the 5G and fibre: fitness for purpose. This plugs the ‘value leakage’ to get the full return from the costly infrastructure assets. This represents a switch from a supply-led to a demand-led model, and aligns with broader industry trends in communications technology and management science.

From a technical perspective, it means meeting the needs of different applications across their whole development and deployment lifecycle. The economic model changes, as the money is tied to what user outcomes can be delivered, not what resource inputs or network mechanisms are offered.

The present ‘superfast’ approach cannot succeed technically, and an alternative ‘superfit’ framework is needed to transcend its limitations. The UK has a number of advantages that make it well positioned in terms of science base, market structure, and regulatory capability. We can avoid the trap of solving the wrong problem really well, such as topping international tables of broadband speed.

The new focus is on the systemic ‘joints’ and how they are measured and managed. The key requirements are to redefine the retail offer in user-centric terms; reinvigorate the wholesale market with richer service offers; remodel the role of BT and Openreach by expanding on the success of the existing separation; reformulate policy to reward what really matters to users; and redistribute money to align incentives to those outcomes.

Preparing for tomorrow solves today’s problems

By addressing the needs of the Internet of Things and the transition to an Industrial Internet, many of the issues that create dissatisfaction today will naturally be resolved. Broadband will mature and become a more predictable and automated industry, forming a core utility like electricity, gas or water.

The UK has created a regulatory environment uniquely suited to experimentation and entrepreneurial innovation. Several of the leading players in the emerging ‘digital logistics’ industry are British. We have a world-class media and IT industry. The risk is what happened in the 1960s and 1970s with container shipping, with the UK being slow to adapt, and permanently losing its leading position. The opportunity is to showcase how a market-based investment in 5G and fibre can deliver fit-for-purpose outcomes.

The missing element for a truly fit-for-purpose system is to create the broadband service transparency and substitutability necessary for a proper market to function. By looking at the complete digital service delivery supply chain, and not broadband in isolation, the UK can readily achieve a position of global pre-eminence in this domain.

Moving to a superfit market model makes technical and economic sense, the timing is right, being user-centric is politically the right thing to do, and it generates positive public feeling for our inevitable digital future. It is a fresh approach that can gather wide support, and be implemented by repurposing existing assets and redirecting resources.

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