Broadband UK - Ubiquitous, superfast (100Mbps+) delivery is achievable

Broadband UK

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Broadband UK | Ubiquitous, superfast (100Mbps+) delivery is achievable

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UBIQUITOUS, SUPERFAST (100MBPS+) DELIVERY IS ACHIEVABLE

Broadband UKIn deciding to write this document, I am aware that much intellectual property is being recorded, and effectively handed to companies, and organisations that can profit from it. wispa Limited, and myself, will be unlikely to profit from this act.

It is necessary for those who can, to do. Ubiquitous, isuperfast (100Mbps+) broadband in the UK is not just desirable, it is absolutely necessary for the social; economic and global future of the UK.iiBDUK was created by the UK Government to disperse some £500m+ of public funds to plug gaps in the rural broadband delivery, with an aspiration to have most citizens able to access 2Mbps+ speeds.

Additionally, £100m (at the time of writing) has been allocated to 'Super-Connected Cities', alongside various other funding.

The total declared 'pot' runs to around £800m.The challenge is simple.

2Mbps is the digital equivalent to giving motorists the right to have a child's scooter. The more grand aspiration of 20Mbps+ availability to 90% of the population by 2015 is the equivalent of giving those same motorists push bikes.

To truly compete on a global stage; give our future generations access to new learning styles; allow our businesses to compete regardless of their geography etc 100Mbps should be considered the absolute minimum delivery necessary.

Whilst there are plenty of commentators that will ask 'who needs 100Mbps+?' the reality is that the question demonstrates a total lack of understanding of our future world. 100Mbps+ is the entry point to the Data Revolutioniii.

This should be the aspiration, indeed this

should be the absolute minimum target that our Government is challenging the communications industry to achieve.

Instead it seems that we have gone, cap in hand, to an industry holding the nation to ransom for paltry delivery and a systematic lowering of expectations.

This paper will first investigate the current situation at the time of writing, and then investigate the opportunities to achieving 100Mbps+ for every citizen in the UK.

It is possible.

This is not a feasibility of new technologies, nor is it a 'wishes and dreams' document.

It will clearly set out where we are, and the steps to achieving what is necessary, within the 'budget' as set by the Government.

Richard BrownChief Operating Officerwispa Limited

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A WORD FROM THE AUTHOR

Broadband UK

CONTENTS

UBIQUITOUS, SUPERFAST (100MBPS+) DELIVERY IS ACHIEVABLE...............................................................................2A WORD FROM THE AUTHOR..................................................................................................................................3OPENING STATEMENT..............................................................................................................................................6UNDERSTANDING THE DATA REVOLUTION...............................................................................................................9UNDERSTANDING WHICH INFRASTRUCTURE TO BUY................................................................................................13THE RAMIFICATIONS OF MEGA CAPACITY................................................................................................................15SO WHAT DO WE DO?........................................................................................................................................20INCENTIVISE OUTPUTS, DON'T FUTURE CAST..........................................................................................................21HOW, WHAT AND WHY........................................................................................................................................24INCENTIVISING A MARKET SPACE...........................................................................................................................27NEW GOVERNMENT MARKET INCENTIVES...............................................................................................................36EXAMPLE COSTING OF NEW GOVERNMENT MARKET INCENTIVES...............................................................................41CONCLUSION..................................................................................................................................................... 43APPENDICES.......................................................................................................................................................44B4RN..............................................................................................................................................................45ALPHABETICAL INDEX..........................................................................................................................................47END NOTES.......................................................................................................................................................49

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Broadband UK

OPENING STATEMENT

When I was part of the couple responsible for starting a rural ISP in Wales1, it was with the clear intent to be able to deliver to those potential subscribers who, through fluke of geography, were isolated enough that they did not represent a suitably large financial opportunity for the primary ivISPs (predominantly BT).

Where the 'big players' choose not to go, often represents an opportunity for the market entrant, who wishes to capitalise on 'softer' competition, whilst still having a profit opportunity. Additionally, it presented a situation where it was possible to follow this profit motive, whilst still 'doing good'.

Within a year, it became obvious that the geography of the opportunity had been vastly underestimated, and that the perception that those on the fringes of towns would have fairly universal access to good speed broadband access was plain wrong.

Very few citizens of the UK have access to broadband that is truly fast. A tiny minority have access to superfast speeds (100Mbps+).

If the UK is not to slip behind the rest of the world economy, it is quite impossible to imagine a future that does not involve ubiquitous, affordable superfast broadband.

• Children will learn in ways not yet agreed, or conceived

• Businesses will no longer be limited by their location

• Commerce can take place at an extremely rapid pace

• The 'vcloud' will evolve into a more tangible and useful entity

• The media world will be irrevocably changed

• Communications will finally replace unnecessary journeys

• Endless opportunities not yet imagined will be created for entrepreneurs

None of this is uniquely my thesis. Malaysia; Japan; Germany; USA are just some of the countries that are already posseting these and many more ideas.

The key to the UK's future is to be a part of those ideas. To show leadership in those ideas.

Our current aspiration, as decided by our Government, is for 90% of the population to have access to 30Mbps or better by 2015.

Simply put this is pitiful.

1 eXwavia Limited

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Broadband UKAlready some of Asia enjoys access in excess of 80Mbps, and the plan for much of this area is to have fixed line access of 1Gbps+. If we are aiming for 30Mbps+ we are already being left a long way behind in the next evolution of the world economy, and we will be unable to recover the situation without spending a considerable amount of time as a non-primary economy.

I would like you, the reader, to imagine an economy in the UK that does not need to have banking in the Square Mile of London, because location is only relative. No longer does the FTSE need to be in the most expensive part of the country, or even in a single location. Financial institutions need not locate themselves in large buildings anymore, as teleworking is not just possible, but demanded by many employees.

HQs of major corporations are no longer centred around major metropolitan areas. Gaming companies are the biggest players in the entertainment industry. Movies are made by organisations for pennies on the previous pound investment. viDNA experiments take place on 'kitchen tables' rather than in multi-million pound laboratories; collaborative organisations are pan global, not pan county.

This future economy pays no heed to the address of the companies that they deal with, and many of the transactions take place online, digitally (whether by viiVoIP or simple web transactions). This future economy changes the internet so fundamentally that it is no longer just a collection of websites, but a mesh of interacting environments. Social networking matures into genuine business relationship environments that are carried out exclusively online. Transactions take seconds – data is shared by the petabyte or more.

This economy is massively bandwidth hungry. It cannot exist without access to hundreds of Mbps. Regardless of what the UK does in the next few years, this economy will exist, and those that have bandwidth to keep up will prosper. Those that do not will not.

The last industrial revolution saw the UK become a world power. We have maintained our position in the world, just barely, on the back of our success during that time. The next revolution is coming, and this one is to be a Data Revolution. The viiiLuddites will still fight the change, not by smashing machines this time, but by decrying the importance of bandwidth. Those that embrace the future will be the new First Economies of the world.

I am adamant that we have to be part of that Data Revolution.

This document will lay out, in clear steps, how we can ensure ubiquitous, accessible, and affordable superfast broadband for all of our citizens, without jeopardising our existing

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Broadband UKeconomy today.

It is the responsibility of our Government, the communications industry, and the readers of this document to make these steps – or alternative ones – a reality, and cement our nation's future.

wispa LimitedChief Operating Officer

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Broadband UK

UNDERSTANDING THE DATA REVOLUTION

1. Broadband in the UK today is typically characterised as 'haves' and 'have-nots'. Essentially, this attempts to capture (predominantly) urban dwellers who have access to fairly good speeds (approaching 20Mbps or better) and those in less urban areas that are languishing far behind, often on <1Mbps speeds in the worst cases.

2. This simplistic attitude is further reinforced by Ofcom in the production of meaningless reports that catalogue the relative failures in rural areas of their attempts to modify the competition in the market space, together with the expected

competitive advertising between the various suppliers in the industry.

3. It is not unfair to state that the UK is a nation of 'have-nots'.

4. If we wish to truly measure the situation as it pertains to broadband in the UK we have to look beyond our shores, and make a national comparison to our competitive nations, not to areas within the nation.

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Broadband UK5. When we do look overseas we can find

lots of anecdotal evidence across the globe of much faster speeds, indeed some of those are mentioned in the earlier parts of this document.

6. What is likely to be more useful is to be able to visualise this, which is what the image included on the previous page attempts to do, albeit from a US perspective.

7. What is plain to see is that, whilst the image is clearly designed to show how far behind the curve the USA is, it shows the UK much, much further down the curve, both in speed and (importantly) cost per Mbps.

8. The previous image shows the situation in 2009 – the image on this page shows 2011.

9. Progress has been made in the average

speed (4.6-10.6Mbps), and cost per Mbps (down from $10-20, to around $3), we are around 10% of Japan's average speeds, and even 25% of France, a near neighbour.

10. Given what we can see from the progress, or lack thereof in the last two years, it is clear that there is an underlying root, that needs to be exposed.

11. Why are Japan so far ahead in the

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Broadband UKspeeds, and price race? Why are our near neighbours in Europe, consistently faster and cheaper than the UK?

12. Some protagonists will point to BT and try and rest the responsibility (blame) at their door. Of course, there is a case to answer there, but this is not the root. This is only a symptom of a wider malaise.

13. The malaise is a combination of a lack of ambition; a lack of understanding of the importance of large amounts of bandwidth availability; and a lack of knowledge of how to 'fix' the problem.

14. BT bear some responsibility in this area, but they are driven by the requirement to satisfy their shareholders requirements first. It is unreasonable and unfair to expect them to bear the burden of the nation's future, when their primary responsibility as a Plc should (and is) to the shareholders that have invested in the company.

15. With this said, it is clear that BT could still do more, but this is where the primary failure is discovered.

16. Ofcom have summarily failed in their tasked objective which is to encourage competition in the communications market, and to curtail the undesirable effects of having such a dominant force as BT within that market space. Ofcom have demonstrated a total lack of understanding as to how to engender this competitive environment, and have tinkered around the edges without delivering anything of substance. Indeed they (Ofcom) have created press releases with such overblown and unsubstantiated claims that the communications industry see them as ineffective, and BT treat them with a degree of derision.

17. Westminster have not covered

themselves in glory either. There is some concern that BDUK is unlikely to deliver anything of substance, and in any even the communications industry believe that the majority of the BDUK money was pre-allocated to BT (whether by agreement or assumption).

18. The vision demonstrated by DCMS is of such low quality, and of such low foreseeable impact, as to be considered inconsequential. The money allocated to BDUK is, however, far from inconsequential in a time when austerity is forefront in any future plans for development.

19. The primary issue with Westminster policy and actions is the determination that we should be subsidising the installation of broadband infrastructure. This fundamental misapprehension is the root of the problem described above.

20. Government intervention through policy and funding is an absolutely wonderful thing, provided that is delivered in a manner that truly changes the future. Government intervention and funding that is misplaced will only result in the installation of infrastructure that cannot deliver the goal of universality in ubiquitous, affordable, superfast broadband.

ixTimBL or more formally, Sir Timothy Berners Lee, is widely renowned as being one of the fathers of what we now consider the internet. His understanding of connecting hypertext to transmission protocols and domain name conventions allowed us all to use a browser to find websites in 'cyberspace'.

21. For the first time, it was not necessary for the user to go directly to the content location, and search engines could guide

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Broadband UKthe user to likely content locations.

22. This revolutionary idea, which we all take for granted today, enabled the typing of a search into a website, that would then list many websites where the search results could be found.

23. Google monetised this search and turned it into one of the largest companies on the planet today.

24. The reason that this is worthy of note, is fax modems, that were originally intended to just communicate the contents of a hard copy document from one fax machine to another, were the gateway to this new way of finding information.

25. In as little as 30 years we have moved from 12-18Kbps communication of predominantly text based communication, to Mbps of data on a single web page. The rate of growth of information available has been colossal.

26. Data chunks have reached such a massive size that we are expecting more and more new words being used to describe the amount of data that is being moved.

27. This is having a significant effect right now. In April of 2012, Encyclopedia Brittanica confirmed that 2012 would be the

last year that they would be publishing the printed version of their encyclopedia.

28. At £1195 the encyclopedia represents a very poor investment for the knowledge contained in a 5ft shelf. The same space in digital terms could hold every written piece of work for the last 1000 years.

29. We may all lament the passing of printed material such as the Encyclopedia Brittanica, but our Luddite ancestors lamented the passing of the old production methods in a similar manner. The reality is that it is increasingly irrelevant what we

think.

30. Data is the new steam power. We need to follow xStephenson's example and embrace the knowledge and lead from the front, not decry it's import and wring our hands.

31. Understanding that data is so significant for our future, and understanding that to move such vast amounts of it around takes relatively huge bandwidth, it takes virtually no leap of further understanding to

realise that the way that we move data is irrelevant.

32. It has already been mentioned that data

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b bit→B byte→

Kb kilobit→KB kilobyte→Mb megabit→MB megabyte→Gb gigabit→GB gigabyte→TB terabyte→PB petabyte→EB exwabyte→ZB zettabyte→YB yottabyte→

Broadband UKwas originally moved via fax modems. Later, data modems came into being, more suited to moving this new media, and faster too. Speeds rose from 12Kbps, to 18, 24, 36, 48, 56Kbps...

33. Then ISDN changed the game with 128Kbps.Then mid-band at 256Kbps – 512Kbps.

Then broadband at 1Mbps+

Then fast broadband at 2Mbps+

And so on.

35. Copper was used as the carriage media, primarily because the GPO (then British Telecom) had invested huge amounts in telegraphy, followed by voice calls. Then light was used over fibre optic cablxie, a wonderful new way of moving data in increasingly large volume and increasingly quickly.

36. The UK has witnessed satellite communication for data, GPRS, GSM, 2G, 3G, and 4G to come.

37. Wireless, WiFi, LTE, WiMAX, the list of ways that humans move data is almost as long as the list of ways that have fallen by the wayside.

38. The common element is that almost every technology mentioned is the 'best' possible way to move data in a particular situation.

39. Just like the fax modems first used, infrastructure for moving data is superseded at a frightening rate, leaving only the requirement to move data as the constant element in the equation.

40. With an environment where data volumes are increasing at a rate that requires new words attempt to describe that

volume, and infrastructure changes being the norm, rather than the exception it is paramount that the focus is not on the infrastructure, or the data volume itself, but on the ability of citizens to participate in this movement of data.

UNDERSTANDING WHICH INFRASTRUCTURE TO BUY

41. It is totally inconsequential for any Government to consider the support of investment in today's technology.

42. Believing that it is possible to 'buy' infrastructure today in order to secure our tomorrow is a fools errand.

43. Back in the days of video cassettes, BetaMax was considered a much superior technical format to VHS. In a relatively brief period of time the BetaMax format was superseded by VHS due to adoption by users. Within a very few short years VHS itself was superseded by DVD.

44. Understanding that our Government is utterly committed to aiding the installation of fibre installations for its' broadband aspirations, and understanding that those broadband aspirations are woefully short of the future requirement is key to understanding the situation as it exists today.

45. What is relevant today, and for our future is the understanding that the movement of data will continue to grow at an unfathomable rate. Participation in that data movement will shape our society, economy and nation in a way that is just as

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Broadband is irrelevant

'Superfast' broadband will be irrelevant imminently

Broadband UKsignificant as the changes that history witnessed during the Industrial Revolution.

46. The Industrial Revolution created a UK that was, and remains at the time of writing, a world economy.

47. If we genuinely believe that the UK can be part of the next seismic shift in world economies, the participation in vast data movements is a pre-requisite.

48. Those data movements are not taking place in the way that was previously anticipate either.

49. Not long ago it was believed that PCs would represent the future of data movements, and yet one of the most significant data movement increases has been via portable devices such as xiismartphones and tablets.

50. In a world where there are approaching 7Bn people, it is believed that there are approximately 5Bn mobile phones, of which approximately half are bandwidth hungry smartphones.

51. The computing power of even entry level smartphones, or tablets is far in excess of computers of less than 5years ago.

52. With dual-core, and even quad-core CPUs being part of the standard hardware build of these devices, and the most recent 3G/4G, WiFi connectivity being built into the devices at the point of market release, the opportunities for users to move data are growing at an exponential rate.

53. Good or bad is no longer a consideration for a nation that wishes to have a first world economy in the near future. It is irrelevant whether we believe that our children should have tablet computers to replace the slates of the Victorian age. This Data Revolution will

happen, and it will not stop for us to catch up.

We lead, or we follow.

The facts of our situation today are:

• The Data Revolution will be as significant as the last Industrial one

• Access to moving data is the key, not arbitrary decisions on methods

• Non-participating economies will be demoted to the least important on a global stage

• Westminster has inadequate aspirations

• BT is not the problem

• 100Mbps+ will be the minimum entry requirement for leading economies in the Data Revolution

• Ubiquitous, accessible, affordable access is paramount

• Changes to the way we access data will continue

• Outputs for citizens should be the focus

• Government investment in infrastructure is pointless and wasteful

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THE RAMIFICATIONS OF MEGA CAPACITY

54. During the previous section, the reader could be forgiven for thinking that the author is in some way anti-fibre installation.

55. Nothing could be further from the truth.

56. Westminster, and regional Government constantly claim to be 'technology agnostic', and yet Government investment is focussed on the installation of fibre, almost at the cost of all other types of broadband/superfast broadband installations.

57. I on the other hand, care little for the methodology of delivery. To take this further, when using data (websites, banking, email, etc) I rarely even consider the method of transition unless there is a problem with that transition.

58. This is exactly how it is for the vast majority of data users today.

59. An analogy may be useful to understand why we should not be interested in the way our data moves, so much as that it can, and in sufficient volume.

60. It is likely that the reader of this document will be a car driver, or at least will have sufficient knowledge about cars to know they need fuel.

61. When we pull into a fuel station, it is extremely uncommon for us to consider how the bulk fuel in the tanks arrived at the fuel station that we have stopped at. We just lift the nozzle, and pump the required amount into our car in order that the car will do what we want it to do.

62. Data is exactly the same. We do not consider where it came from. We do not

consider how it will reach its' destination, just that it will.

63. The act of consuming data is extremely close to the way we run our cars. We spend very little time considering where our fuel comes from, or what is happening to it whilst we consume it, and yet the globe is a voracious consumer of both fuel and data.

64. No consumer of data should need to be concerned in the least with the manner in which the data is being transmitted.

65. Once we understand how data consumers consume data, we need to consider data producers.

66. Data producers will fill every scrap of capacity available to them with new functionality, and new 'features', because they can.

67. If there is 100Mbps+ bandwidth universally available, it is an absolute that data producers will find increasingly innovative ways to make the available bandwidth seem inadequate. This is not a deliberate malevolence, this is how the boundaries of technology are stretched to the point of breaking, and then another innovator will find a new way to move that data in a more efficient or faster flowing manner.

68. We want this to happen. It is not important if we are part of 'the industry' (whatever that happens to be), it is that these types of innovations occur due to the availability of a boundary to push and positively move forward our technology opportunities.

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Broadband UK69. If the UK supply the boundaries to

push, then the innovators will move to push them in the UK. If they are in Brazil, likewise.

So, understanding that:

• Data movement is the key consideration, and not the method of movement.

• Regardless of the boundary set, innovators will push at those boundaries

• Innovation will happen in the locations most suited to those innovations

• The methodology of data movement is in constant flux

70. We can then move onto the Government insistence on supporting a particular technology – fibre broadband.

71. Whilst fibre is, and has been for almost a decade, the fastest way to move data in a consistent and mass-volume method, the same could have been said for copper transmission for two decades.

72. What we as a nation are doing via our Government is choosing a carrier technology to bet the farm on (to borrow US phraseology).

73. Get it right and we'll be okay. Get it wrong and we'll be in the economic doldrums for decades to come.

74. Why would a Government do this? Obviously it is always amusing to speculate, but there is significant evidence to suggest that Westminster spends a great deal of its' time listening to BT for advice on what the future holds.

75. To be clear – I think this is not

only a good thing, it is absolutely essential. The largest telecommunications provider in the UK should be listened to.

76. Listened to, not believed to the exclusion of all other evidence.

77. The predominant problem for the Government (regardless of whether it is UK or regional) is that there is an attitude condition that has focussed attention at the current best method for delivery fast/superfast broadband.

78. Whilst it is a useful focus, it is impossible for the Government to enter into any purchase arrangement (which is essentially what all the funding has been structured as) that will result in a sustainable outcome.

79. Markets, regardless of their type, and most especially those that are rooted in fast moving technology, pay no respect to the desires of those that have purchased todays technologies. New innovations will seek to make those technologies irrelevant, redundant and no longer required.

80. This is the nature of innovation. It takes the existing and stretches what is possible until it is necessary to replace it.

81. An extension of the difficulties of Government is the abject failure that is Ofcom.

On their website they declare:

which is laudable.

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Telecoms

Ofcom is committed to a thriving telecoms sector where companies can compete fairly and businesses and customers benefit from the choice of a broad range of services. This section is dedicated to information and research for the

telecoms industry.

Broadband UK83. Sadly, by any measure of this

commitment, they have summarily failed.

84. Whilst the telcoms sector could be considered to be thriving, in comparison to Japan, Malaysia, even Phillipines, the rate of growth of the telecommunications market is slow.

85. Companies competing fairly is impossible (even for significant players such as Virgin) when BT own most of the network infrastructure required to carry data at the core.

86. Businesses and customers are not benefiting from a choice of a broad range of services only a choice of where to buy those services from. In many cases these are carried via BT infrastructure in any event (Plusnet for example) both in the last third and core.

87. Simply put, Ofcom have absolutely no idea how to regulate the Telecommunications market space to achieve these aims. A poignant example of this, was their assertion that a reduction of the wholesale bandwidth pricing in rural areas would result in 3m citizens receiving cheaper broadband. The actual net effect has been zero. Not least of all because the actual overall first year reduction in cost for those ISPs in those areas, was just 80p per user (assuming 40 users from an exchange).

88. This, of course, did not stop Ofcom sending out press releases claiming a 'win' for the regulator and the consumer.

89. I have yet to see a similar press release admitting that they, in actual fact, have had no tangible impact at all.

90. In the clearest possible terms, Ofcom are a distraction for the industry at best. At worst they are positively in the way, and are

not assisting so much as preventing a more open and competitive market space.

• A misguided Government

• BT driven by shareholder benefit not socio-economic benefit

• A regulator that cannot regulate

• A huge fund of money that is dedicated to purchasing infrastructure

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Broadband UK

in the forthcoming Data Revolution we will either lead

orwe will simply be left behind by the

leaders there is no middle ground

Richard Brown, COO wispa Limited

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Broadband UK

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SO WHAT DO WE DO?

91. This document title suggests that 100Mbps+ is achievable.

92. It is perfectly acceptable for cynicism in this statement. It takes no effort at all to find endless 'experts' that will tell us that to install sufficient fibre across the nation to achieve 100% coverage would be £15bn, £30bn even £100bn.

93. They are almost certainly correct.

94. In addition that investment would almost certainly be out of date inside a decade.

95. It is important that this document not only laments the current situation, and the author's belief that the UK is headed in completely the wrong direction, but also to offer a new direction. There is a way to achieve what the nation requires.

96. Far from simple, and requiring a degree of confidence that is not currently evident in the existing Cabinet, the following pages will set out a journey that will result in a total spend comparable to the existing announced funding from Westminster (£800m), and that would deliver 100Mbps+ to anyone that wishes to receive it.

97. As to be expected from previous pages, this is not a new technology announcement, it is just the sound application of known conditions in any market, and careful application of stimuli and regulation.

98. At the absolute root of this plan is sustainability. Once this path has been taken, future development that will maintain the UK position as a thought leader in this space will be applied, without the need for new financial stimulus.

99. Clearly, at some stage, there will be a 'new' problem to solve. A new challenge will face the globe, but this paper is intended to deal with only the movement of data via sufficiently fast methodology.

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INCENTIVISE OUTPUTS, DON'T FUTURE CAST

100. Outputs should be the only focus of any Government's policy or investment.

101. The problem with this statement is that if we were to approach any politician today, they would all claim that outputs are the only consideration.

102. It takes a brave man to look in the mirror and realise that, actually, they don't know what the answer is. To prevent this admission, our politicians have built a culture of absolute, utter, and complete conviction to a path of action. Until that fails, and then something else receives the same attention. This is where we have learned to expect to see the 'U-Turn' headlines.

103. Governments, regardless of their geography, politics, or country size have only a single task. To serve their population to the best of their ability, and to deliver the best possible standard of living possible with the resources available.

104. Their 'job' is not to attempt to decide how this should happen.

105. Analogies are useful in this context, not least of all because it requires many of us to turn our accepted thinking on its head.

106. If we want a child to do a chore, a constructive methodology is to reward the successful outcome of the chore being completed. This teaches the child that positive behaviour receives reward, even if the chore is not seen as positive by the child.

107. A less positive methodology is bribery. Offering the child a reward prior to task completion allows the child to enjoy the

benefits of the reward, regardless of whether the chore is completed.

108. Even worse is to threaten to punish failure to complete the task. The child then associates the parents' desired outcome

with a negative outcome for them.

109. Understanding that we need to reward the outcome, is directly applicable to managing, or incentivising a market space.

110. Any focus should be on the receipt of the desired outcome, not on the input.

111. Ofcom for example, use the 'we'll punish you for not allowing competition' or worse 'we'll punish you for being the biggest' approach, by forcing price reductions (however meaningless to the rest of the market space) upon BT. The outcome

has been that BT employ a significant number of people to manage Ofcom and find ways of minimising the 'punishments'.

112. As another example, the UK Government made three key mistakes in setting up BDUK:

1. Excluding <£20m turnover companies

2. Focussing on technologies (3G/4G and broadband)

3. Offering the money prior to outcome

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Broadband UK1. The exclusion of growing companies limits the innovation to the established players in the market space. These are proven time and again to be the least innovative, and the least adaptable to market changes.

114. BT no longer seek significant 'step change' type innovation. They just cannot. If the next, fastest, way of moving data was to bounce light off rain drops, BT would not wish to see this move into their market space. Their huge investment in copper and fibre networking prevents taking this new method into their infrastructure easily.

115. A new entrant without such huge legacy investment however, is able to use whatever they believe to be the best possible way of achieving their desired outcome.

116. Essentially, what the Government is perceived to have done, is precisely what they have done. Exclude the most innovative organisations from the available incentives.

117. 2. By focussing on desirable technologies, the Government have declared what they consider the future to be. This in and of itself is a type of bravery. There is unlikely to be any senior executive in any telecommunications company with such a high degree of confidence that they would bet the future of an entire nation on such a consideration.

118. It is an absolute that we cannot be omniscient when it comes to future casting the telecommunications industry. Anecdotally, we have already mentioned VHS versus BetaMax (where intelligent consideration determined BetaMax as the 'better' format), but there is also Bill Gates statement that:

119. 119. So, even the 'great' Bill Gates, who is a billionaire precisely because of what he believed could not make him rich, cannot foresee what the future holds in his own industry.

120. What we can foresee, with reasonable accuracy, is the growth of things. The growth of data is exponential. It has already happened, and will continue to happen. The technologies that allow the data to move, will be changed to keep up.

121. 3. By offering to pay money in advance of the desirable outcome, we have effectively bribed the child.

122. The Welsh Government tried this with RIBS, where they paid millions to BT to enable exchanges for broadband. BT enabled the ones that made the most commercial sense to them, and through excellent contract negotiation, proved that they had met the requirements laid out by the Welsh Government.

123. The reality is that the 'up-front' money allowed BT to do what they chose, regardless of whether the Welsh Government received the outcome that they wanted.

124. It becomes increasingly obvious that rewarding outcomes is how to incentivise a market space. Investment in new companies is often delivered on precisely this basis.

125. Milestone events are set, and investment injection is agreed based on those milestones. When a milestone is met,

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It's not manufacturers trying to rip anybody off or anything like that. There's nobody getting rich writing software that I know of.

Interview with Dennis Bathory-Kitsz in 80 Microcomputing (1980)

Broadband UKthe next tranche of investment is delivered to the start up organisation. Failure to meet the milestone may result in the withholding of that tranche of investment until the milestone is met.

126. The problem with this approach for a Government is that it requires a sound understanding of what they wish to incentivise. Without such understanding it is necessary to 'guess' what the investment should be made in. When you are listening predominantly to an organisation with a vested interest in a particular technology or methodology it is no particular surprise when that is the favoured vehicle to invest in.

127. This is very much the first step for the UK.

128. The Government needs to metaphorically hold its hands up and say that they do not know what the right technology is, nor do they know who is best to deliver the desired outcome. They also need to be absolute in their conviction as to what the desired outcome is.

129. This is brave.

130. Currently Cameron is our Prime Minister, and as a leader he receives vast amounts of briefing information from industry leaders with regard to the Telecommunications industry. Much of it is read on his behalf, and best opinion is passed to him with regard to what appropriate action may be.

131. This is also shared with departments

such as DCMS2, who then are tasked with policy creation.

132. They are all receiving the same 'best-opinion' however, and subsequently the approach remains the same. Buy into the

'best' technology/methodology in the hope that the outcome will be desirable.

2 Department for Culture Media & Sport

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Can Cameron be a true world leader?

Broadband UK

HOW, WHAT AND WHY

133. Change our thinking, and the way that the UK Government intervenes into this market space.

134. Incentivise the outcome not what method that outcome shall be derived by.

135. At the point that our leaders are able to change their understanding of what it is to reach a desirable outcome through incentivising the achievement of that outcome, grants/intervention funding etc will become infinitely more effective.

136. If we are to make the BDUK/Super connected cities/any other investment money truly deliver a step change in the economic future of the UK, it will take a brave politician to make it clear that there is no money for infrastructure, regardless of how 'good' that infrastructure is.

137. There will be huge lobbying pressure to prevent this, as the major beneficiary of all the announced funding will be BT who have already established planning around the accrual of £500m+ of Public funds that will contribute to their future investment in fibre networking.

138. If I were leading BT I would not be doing anything different. I would make sure that I accrued as much of the Public funds as I possibly could, not least of all because it would deliver fantastic value to my shareholders.

139. This is not, however, in the best interests of the Public purse.

140. That's not to say that BT do not have a significant role to play in the delivery of the UKs' future, they clearly do, but they should not be the default option, nor should they

receive funding based on a commitment to deliver increased infrastructure coverage.

141. The Government needs, as an urgent method, to withdraw any funding that is centred around the commitment to deliver infrastructure. This should be replaced with a clear and unambiguous statement that the Government will reward any organisation that is shown to deliver the desired outcome.

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Broadband UK142. We, as a nation, need to understand

what we need from data movement.

143. Is it only speed, or is latency, quality of service, etc important.

144. To be clear, speed is the single most important aspect of any desirable outcome. A minimum speed of 100Mbps is the entry point for world leadership.

145. Note that this refers to a minimum speed. Not 'upto' which is meaningless and if Ofcom were truly able to regulate the industry would have been erased from the industry vocabulary a long time ago.

146. If we accept this to be true, which for the purposes of this document we shall, then what other considerations should we make that would give us the desired outcome?

• Latency is important. This is the effective time that it takes for data to travel to the recipient. It's importance is minor for web-browsing, emails etc, but is fundamental for online collaborative gaming, media streaming (so called 'on-demand' viewing), and for financial transactions will be viewed as mission critical. It is typically measured in milliseconds, and gamers (a very good measure of what is 'acceptable' in this regard) consider 23ms to be the maximum for addressing their desired server. Latency is affected by distance, intervening equipment and the infrastructure construction itself. As such it is necessary to decide between which two points latency will be measured, and agree a desired figure for that journey. It is my opinion that 20ms should be the

latency target, over an agreed distance, or to an agreed destination.This may vary according to where the measurement is being made from, but in any event it should be agreed and then measured to demonstrate that it is achieved.

• Quality of service (QoS) is much more subjective, and much less straightforward to quantify. At its most basic form it chooses which data traffic will receive priority, and allocates a better service to those data transactions than others. Obviously in an ideal world, all traffic would receive the highest priority and subsequently the best service.In practice it is necessary to make automated decisions that are preconfigured to manage data transactions.An example of this is VoIP (Voice over Internet Protocol) traffic, which are calls using data transactions. VoIP is quite sensitive to latency (mentioned above) and also packet loss. If we consider packets to be 'chunks' of our conversation, packet loss is one of those 'chunks' being mislaid or delayed. This results in broken voice conversations or undue delay in the speech.QoS is a capability that goes hand in hand with both speed and latency to a certain extent and it may not be possible to fix a value that is considered a desired outcome.

146. It is clear from the extremely brief discussion above that setting desired outcomes to incentivise may not be as simple as only picking a download speed

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Broadband UKlimit. No discussion has been given in this document to:

• Upload speeds being synchronous with download speeds

• Price to access bandwidth

• Device accessibility (PC, Mac, Smartphone, Tablet, TV, Set top boxes etc)

• Timescales within which this should be achieved

• Method of measurement (regulation)

• etc

147. This is primarily because this document is designed to show the steps to achieving 100Mbps+ for the entire UK, not to blueprint precisely the elements of that achievement.

148. The objective should be for clear, unambiguous and (most importantly) verifiable outcomes to be declared as desirable, and so subject to reward.

149. Naturally, there is much work to do to quantify these outcomes, but they should not be set with BT in mind. This is not about incentivising what is already possible, this is about incentivising moving the UK into the thought leadership of the world.

150. As such the outcomes cannot be described as targets; they cannot be achievable with little effort; and they must meet the minimum requirement of 100Mbps. By making these outcomes the only source of market incentivisation it is clear to the industry which direction they should head in whilst not making any unsafe future casting with regard to technologies or

methodologies.

151. Fibre is almost certainly the way forward for the foreseeable future, indeed it is possible, likely even that fibre in some form will be with us for decades.

152. That does not make a commitment of public funding to the existing way of delivering fibre a safe or advisable route of action for a government to support.

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INCENTIVISING A MARKET SPACE

153. The method of incentivisation is currently moot. It is a payment to a contracted organisation or organisations to deliver infrastructure.

154. Clearly the purpose of this document is to discuss a more advantageous method to incentivise the industry.

155. Having set the outcomes that are desirable, the rewards for those outcomes need to meet three measures:

• By real incentives to successful organisations; individuals

• Not cost the UK more than the benefits derived

• Attract innovation to the UK to the detriment of other economies

156. Real incentives are not short term, but are predictable in their value. As such, whilst cash payments are always desirable to an organisation, there are smarter ways for a Government to incentivise an organisation.

157. In considering incentives, I have spent a great deal of time researching what attracts organisations to market spaces, or indeed citizens to be employed in those market spaces.

158. For organisations, the motive is almost exclusively one of profit. Very few organisations exist for purely social reasons, and those organisations that do are rarely found in the telecommunications space (with the notable exception of B4RN).

159. If we wish to incentivise an organisation to meet our desired outcomes,

we have to meet the profit motive that they hold for the organisation.

160. For citizens it is less straightforward, motivation can be as simple as satisfying an earning requirement, and then as complicated as being a 'part of something'. Earnings requirements are more straightforward to consider, but if the UK is to attract intellectual property from other economies then the 'softer' incentives will also need to be met.

161. Collectively the incentives for successfully delivering the desired outcomes need to be shared with the organisations and the individuals in proportionate terms.

162. The benefits to the UK for such thought leadership, and for delivering world leading data transmission capacity are virtually impossible to calculate in cash terms.

163. There have already been dire predictions within this document of what will happen to economies that do not lead this Data Revolution, and the consequences of failure are easier to imagine, than the quantification of 'what its worth' to succeed.

164. The best measure of cost, is the existing budget of C£800m established by the Government, together with no new costs.

165. When we look at it in this vein, it becomes more straightforward to decide how to measure the rewards on offer.

166. £800m of cash, together with benefits for investors in organisations that are successfully delivering the desired outcomes seems to be an excellent starting point.

167. If we accept that there is £800m in cash, then we can decide how to divide that amongst our desired outcomes. If we

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Broadband UKchoose to incentivise certain geographies (rural areas for example) we only need establish the definition for those geographies, and then the ratio of 'over incentive' for achieving the desired outcomes in those geographies.

168. £800m will not last particularly long however, if we blindly follow the flawed 'results' model adopted by the Welsh Government within their BSS (Broadband Support Scheme) using EU funding. The mechanism that they have used is effectively a maximum bounty (£1000) for delivery to an individual. It takes little effort to establish that £800m divided amongst 26m households is unlikely to be sufficient to achieve 100Mbps+ for each household (£30.77 per household).

169. Understanding this, it is necessary to see how it would be possible to 'stretch' this cash with other tangible benefits that would result in market participation.

170. Costings will be discussed in more detail later in this document, however it is worth noting some of the incentives that have been considered (whether included or discounted) for the purposes of clarity.

171. This should help to clarify that nothing should be 'off the table' when it comes to generating sufficient activity in this market space.

• Tax free earnings for organisations for a period of time (5years for example)

• Tax free earnings for employees of companies delivering desired outcomes

• Enhanced investment taxation for individuals investing in startups that are successful in delivering desired outcomes

• Reduction or removal of VAT on items required for the installation of infrastructure to meet the desired outcomes (repaid at point of measured success)

• Business rates elimination or reduction for qualifying companies

• Re-investment of profits attracting taxation benefits

• 'Fast tracking' of working permits for qualifying companies attracting overseas employees with skills

• Relaxation of planning requirements for infrastructure installations

• Reduction/removal of taxation on organisation earnings for activity where they are actively assisting a qualifying organisation in the successful delivery of the desired outcomes

• Reduction/removal of VAT on organisation charges for activity where they are actively assisting a qualifying organisation in the successful delivery of the desired outcomes

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Broadband UK172. Many others have of course been

considered (and no doubt many missed), but the ones shown would all have a negligible or zero impact on the Treasury.

173. When understanding how to cost a step change in a market space, there are (broadly) three considerations:

• What are the desired outcomes

• What is the cost benefit (need not be cash – could be social)

• Is it affordable (this can be short/long term)

174. The first element has been dealt with elsewhere in the document.

175. Cost benefits have been mentioned, but have been expanded upon in appendices.

176. This section is dedicated to affordability.

177. In order to make an appropriate assessment of affordability, it is necessary to agree the method by which affordability can be measured.

178. In simplistic terms the measures of affordability can be summarised as:

• Is there sufficient funds to do it

OR

• Are the net gains sufficient to justify the spend

OR

• Is there a reason that we should ignore affordability and do 'it' anyway

179. For governments the measure should always be the second one, and this is what

we shall use for assessing the affordability of the steps to bring about the step change in this market space.

180. For completeness, the first measure is not being used as cash cannot be the primary consideration for the economy of a nation.

181. The last measure is not being used as this could place an 'open chequebook' mentality that would be detrimental to the nation.

182. The chosen measure allows for significant investment (in various forms), but also expects a tangible return on investment for the nation in both cash and socio-economic terms. The key is that both can be measured, and in turn the return can also be measured.

183. Understanding the method by which we intend to measure the success of the step change in market space influence, also allows us to quantify, or at least to describe, the benefits that are expected to be derived.

184. Communication of those benefits is important, as it allows a Government to demonstrate an appropriate reason for a late change in direction, without it being labelled as a 'U-Turn'.

185. Unfortunately there is sufficient anecdotal historical evidence to suggest that politicians may not always make the most appropriate decision if it is necessary for them to be seen to 'change their mind', and so it is the author's task to be sufficiently verbose to allow for sufficient justification to be available.

186. The socio-economic benefits should be considered first, as these are less tangible in cash terms, but may be more significantly felt by the population at large.

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187. Digital inclusion

188. We have (collectively) been talking about a digitally included society for some time now, and it is worthy of explanation expansion. We would like to define digital inclusion thus:

189. This definition is useful in so much as it is broad enough to allow for sufficient scope, but specific enough to bring meaning to the phrase.

190. If the market space intervention suggested within this document is to prove to be successful to this socio-economic benefit it has to allow 100% of the population who wish to participate in those online activities to do so. This means sufficient bandwidth (we have agreed that 100Mbps+ should be considered the minimum), at an affordable rate.

191. At the point that this can be reasonably delivered, the Government's existing plans for online access to services and information can be realised, and the economy as a whole can benefit from generations of non inclusion.

192. This has a long term cash economic benefit, that cannot be accurately calculated in any useful terms, but one that inevitably shall result in a cash, or revenue benefit by supporting the other, more definable desirable outcomes.

193. Education Modification

194. The educational system is renowned for teaching pupils out of date software and computing techniques. This is a function of having to agree what should be taught, and then the fast pace of the industry making much of what was agreed prior to the school year redundant. The reader could be forgiven for assuming that this is the area in which the major socio-economic benefit would be derived.

195. In fact it is likely that the significant benefits would be derived in the non-technology areas of education.

196. Ways of learning are rooted in a Victorian tradition of rote, and face forward type learning. Whilst much of this has been challenged, and some schooling does not fit this archetype, it is not unreasonable to state that the techniques are less applicable to the connected society than perhaps they may be.

197. I have no intention of showing what education should be; it is not an area that I consider that I hold expertise, nor is it clear necessarily, what tomorrow's educational environment should look like.

198. What is clear is that the availability of ubiquitous, fast, and affordable bandwidth would enable teaching to change forever. Collaborative learning spaces would no longer need to be a classroom; at the youngest age, children could learn about other nations, directly from their peers in those nations; universities would become relevant again as hubs for learning (a change away from the seat of learning) and our brightest potential would be highlighted in those advanced learning environments rather than shunning them to conduct independent collaborative learning and experimentation outside of a University

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The removal of access barriers to the whole of society wishing to participate in online activities.

Broadband UKenvironment.

199. Education would be fundamentally different, but not a change for changes sake, a change to the positive.

200. Social Mobility

201. The challenge that most governments have faced is how to allow the most disadvantaged portions of society, access to the opportunities of the most advantaged in society.

202. Much hand wringing has taken place over the decades over how to enable social mobility in a population, indeed many (far more scholarly than I) have dedicated tens of thousands of words to discussing the issue and how one may choose to go about resolving it.

203. Giving access to the 'digital world' removes many of the barriers to education; opportunity; availability of resource material etc. It is a fact that ubiquitous; fast; affordable bandwidth would be the single most significant change to social mobility.

204. The presentation of the opportunity should always be the driving consideration in social mobility enhancement. It is impossible to force a society to be upwardly mobile, it is perfectly possible to enhance the environment to allow social mobility, however.

205. The ability to create online businesses; find employment; learn; research; participate in disparate communities etc are all enablers to social mobility. There has never been such a significant opportunity to make such a fundamental change to the future of a nation than the Data Revolution.

206. Health of a nation and Healthcare

207. Much has been made of enterprises such as NHS Direct, and various online GP 'live chat' type services, some of it less than positive. The primary concern appears to be one of adjacency. In the absence of being able to physically examine the patient, it is assumed that the medical practitioner can only ever offer poor diagnosis, or advice.

208. There may be something in this, but what is extremely clear is that an informed society often chooses to be healthier. This choice becomes a social norm rather than a 'nanny state' directive.

209. The problem that any Government has with educating a society in health issues, is the balance that is necessary between the accepted information, and the reception of that information by the society.

210. Too strong a message and the message loses impact because society 'wont be told what to do'. Too weak a message and the message itself is not taken seriously. Huge sums of money have been dedicated to leaflets, TV Adverts; on the page advertising; legislation etc in order to try and push a reduction in smoking, or unprotected sex. Much of this has had a negligible end result.

211. Inform a society and the tend to move the curve towards a more desirable state, simply by making better choices. There is no better information vehicle than the internet. The author would be the first to admit that much of the information that can be found on the internet can be called into question, not least on its accuracy.

212. And yet...

213. Information that is allowed to become part of the online zeitgeist becomes part of a society's thought process. An example of this is the apparent disgust for what Kony

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Broadband UKhas been doing with regard to child soldiers. Whether or not the information is entirely accurate is less important than the overall awareness that has been brought to the situation. Politicians, newsprint, and society have all participated in the condemnation of child soldiers, and Kony's involvement in that.

214. Child soldiers received a new interest in society.

215. Managed properly, smoking; obesity; child mothers etc could all become part of the same zeitgeist. The access to this zeitgeist is what makes it possible for society to benefit from the healthcare benefits that the Government would wish to promote.

216. The more straightforward information is to access, and broader the spread of society that can access it the more effective the communication. Online consultations etc are a nice benefit, but strictly in addition to the availability of information to all.

217. Environment Benefits

218. Unfortunately, much of this has been repeatedly overstated, not least by those with a vested interest.

219. Video conferencing was to change the way we had meetings, and even made its way into popular near future movies. The reality is that people like social contact when they are doing business, so the actual impact of being able to hold video conferences is reduced by that.

220. That is not to say that video calls do not have a significant part to play in the reduction of unnecessary meetings – they very much do, and the carbon dioxide production reduction will be extremely welcome.

221. Ubiquitous, affordable access to fast broadband has considerably more benefits to the environment than the simple reduction in vehicle journeys. Some examples are:

• Reduction in printed literature (email, websites, video messages etc are all more effective and much lower impact to company comms budgets and the environment). This could be measured in hundreds of millions tonnes of CO2 that is not produced, plus hundreds of thousands of tonnes in reduction of landfill.

• Smart metering would be possible for the first time, allowing production of energy to be better managed (lower waste) and a reduction in cost to both producer and consumer

• The increase in teleworking (non location dependent working) has been calculated in hundreds of millions of tonnes of CO2 reduction. Whilst the reduction in journeys is quite significant, the reduction in heating/lighting and building use is also extremely significant.

• Newspapers are increasingly moving to online only models. It's estimated that at the point that printed papers cease (not inconceivable when one considers that Encyclopedia Brittanica has ceased printed versions in 2012), that the savings of CO2 production will be in tens of millions of tonnes, together with a reduction of a similarly large reduction in landfill input.

• A reduction in the rate of growth of air travel (use of teleconferencing) would likely have a more significant

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Broadband UKeffect than the reduction of business meetings domestically. A 10% reduction would result in hundreds of millions of reduction in CO2

emissions.

• Cloud computing reduces the requirement to keep replacing hardware in homes and businesses, and in some cases eliminates the requirement for new hardware entirely. This in turn reduces delivery journeys (of the hardware itself), reduces power consumption (fewer devices required in total) and so CO2

production. Finally, it reduces significantly the amount of hardware that finds itself in landfill. Most IT hardware is difficult to process (see WEEE directive for requirements) and the inclusion of some heavy metals in PCB manufacture can make hardware uneconomic to recycle, adding to the costs of businesses for ethical (and legal) disposal.Giving access to true cloud computing (see appendices) it would be possible to significantly reduce the environment impact, whilst still improving access to innovative services.

223. This should not be considered a definitive list, but these benefits are not solely environment linked – virtually all see a significant reduction to the cost at the public purse, and indeed would allow us to more easily meet our Kyoto commitment.

224. Whilst these socio-economic benefits should not be considered a full and definitive list, they should indicate sufficiently for the reader the nature of those benefits.

225. Where reasonable quantification can be made these shall be included in the following cost analysis.

226. In addition to the 'softer' benefits of a socio-economic nature, there are of course benefits that are directly economic.

227. These are directly quantifiable to either the consumer; business; or Government. These include (but are not limited to):

228. Bulk cost reduction

229. There is plenty of scholarly discussion around the relationship between the increase in demand and supply, and the proportional reduction in cost.

230. This would essential make the provision of the infrastructure hardware necessary to provide the capacity to move large data chunks much lower than it currently is today. If this plan is implemented in full, it is not inconceivable to imagine that on shore production; distribution and servicing facilities would be required, which in turn would lead to increased employment.

231. When costing hardware for inclusion in infrastructure, even BT (who buy more hardware than any other communications company in the UK), cannot use the sort of buying power, that an entire buoyant market space would be able to drive.

232. The driving down of purchase cost of infrastructure hardware has a positive net effect for the Treasury. The process of cost reduction due to volume, requires volume. Whilst this paper will suggest the reduction (possible elimination) of taxation for the purchase of infrastructure hardware directly related to the delivery of the desired outcomes, it does not anticipate the removal

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Broadband UKof:

• Import duties

• Duties/taxation on components

• Taxation of staff working in production; distribution or servicing facilities

• Taxation of profits derived in production; distribution or servicing facilities

233. As these would be new activity in the economy, they are previously not accounted for by the Treasury and subsequently would be classified as new incomes.

234. Outside of infrastructure hardware, the bulk cost reduction effect would also be witnessed in the following areas:

• Fibre optic cable manufacture; supply

• Copper cable manufacture; supply

• Transportation of required components/hardware

• Training in the use/installation of the hardware and peripherals to the infrastructure

• Ancillary component manufacture; importation; supply (connectors, tools, etc)

• Vehicle sales/leasing (new labour mass needs to be able to get to install locations)

• New employees to provide support services to production/importation/installation/servicing personnel

• Accountancy/legal services

• Peripheral activities –

◦ catering

◦ printing (albeit reduced in requirement the overall volume is still likely to increase)

◦ Safety clothing

◦ Training services

◦ Furniture supply (teleworkers or office)

◦ Health & Safety assessment (teleworkers and installation staff in particular)

◦ Roadwork contractors (for under road installation)

◦ Quarry production and support staff (roadwork infill)

235. As stated above, this is not intended to be a definitive list, but the impact is quite straightforward to extrapolate.

236. Increased taxation recovered by Treasury

237. Despite this document calling for our Government to be brave enough to limit, or remove, taxation on those organisations and individuals who deliver the desired outcomes, the additional support activity would generate significant new revenue for the Treasury.

238. Further expansion of this area can be derived from the costings section.

239. Inbound investment

240. The attraction of overseas (or retention of currently UK based) organisations would allow for the increase of revenue in the economy, together with

the increase in taxation to the Treasury.

241. Whilst this document was being

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Broadband UKfinalised, Australia announced a AU$35.9bn 3yr plan to get 93% of the population access to 1000Mbps+ internet that would commence imminently. The remaining 7% would be given access to satellite.

242. The plan would also directly employ 16 000 workers.

243. The plan has attracted significant criticism for it's cost, but the sitting Government remain unmoved, and point to a 'changing global economy' as the justification for Australia's investment.

244. Almost as a sidenote, the Australian Prime Minister has been quoted as saying:

245. It would appear that Australia have been receiving much better future casting with regard to data usage than our own Government, and are actively building an economy around data movement, in an attempt to attract inward investment.

246. If Australia are prepared to gamble AU35.9bn, during one of the worst global recessions witnessed, simply to place high speed data capability into every home and business, it is obvious that they expect the net gain to exceed this investment, and secure their position in the Data Revolution.

247. This is, of course, only the most recent announcement, and Malaysia have already (anecdotally) invested in excess of US$1.12bn in direct cash investment and market incentives.

248. Malaysia's sum of investment is not

dissimilar to the amount committed to investment by the UK government, albeit Malaysia started earlier, and appear to have a very 'open chequebook' approach toward ensuring their citizens have access to high speeds.

249. High speed access in turn will attract new companies to Malaysia, who in turn will employ citizens and derive new benefits for the Malaysian Government.

250. A truly virtuous circle.

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Broadband UK

NEW GOVERNMENT MARKET INCENTIVES

In order to make this as straightforward as possible to digest, I have simply listed (with some narrative) each step in turn.

i. Immediately cease the payment for infrastructure acquisitionThis will be entirely unnecessary and the allocated funds are required to contribute to the initial activity that will actually influence the market space.

The expected return under the current conditions satisfies only 2Mbps+ for the population, with some areas/subscribers achieving better speeds. These new measures make this spend an irrelevance.

As such the reallocation of these funds to something that will derive true benefit to the Nation, and will allow for entry to the Data Revolution is a pre-requisite to success unless additional (similar) funding is to be allocated.

ii. Define agree and publish desired outcomesIn their simplest form this is 100Mbps+ for 100% of the population; some modification of this will be necessary, but should be clear and unambiguous.If latency, QoS etc is to be included as part of the qualification, it is essential that the method of measurement is uncomplicated and unambiguous.

Only if truly considered as being highly desirable should any other Desired Outcome modifier be considered, with the exception of synchronous upload and download speeds.

This modifier is easy to understand and highly desirable, albeit not necessarily practical in all situations.

iii. Agree and publish 'tax breaks' for qualifying companiesCompanies or organisations that can demonstrate that the agreed percentage of their customers can access 100Mbps+ (100% is desirable, but may be impractical) to qualify for tax relief on related activity/profits.

Clearly 100Mbps+ should be available to 100% of an organisation's customers in order for them to be considered a qualifying company delivering the Desired Outcomes. With that said, there is an excellent case for the Government to consider allowing companies to become qualifying at lower percentages (no less than 90%) if this would generate sufficient market activity.

iv. Agree and publish enhanced returns/incentives for rural areasSome areas must receive enhancements to the standard incentives to assure 100% of geography receives coverage.

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Broadband UKThis is essential. Rural areas must not be neglected, nor should they be pushed to the latest possible deliveries. If an organisation is geographically disparate then it is unacceptable to allow them to become qualifying by only serving urban areas.

Additionally, there is an excellent case to enhance the benefits of new market entrants that would solely seek to exploit their advantage in rural communities. Careful consideration should be given to delivering a sufficient incentive to serve rural communities, whilst also maintaining a balance that ensures urban areas are not perversely affected.

v. Agree and publish personal tax benefits for employees of qualifying companiesThis is to encourage skills to the UK and to encourage the retention of existing skills. Tax free income should be determined so that each employee could earn up to £50 000 per year without income tax. This would equate to a cost to the Treasury in the order of £10 000 per annum per qualifying member of staff.

The Data Revolution participant countries will be needing the services of a relatively small number of personnel across the globe.

It is imperative that UK residents are encouraged to stay, and overseas skills are positively attracted to the UK. A recent (to the creation of this document) announcement by the Australian government (NBN) declares the creation of 16000 new posts to deliver a AU$35.9bn project.

Failure to secure both domestic and overseas skills will prevent UK leadership of the Data Revolution.

vi. Reduce or eliminate VAT on qualifying hardware/software/ancillaries/cableThis would reduce the cost of installation for qualifying activities significantly, although it may be more desirable (and advantageous) to apply this to on shore manufactured items rather than imports, and this would be the preferred outcome.

It is of course possible to incentivise a market space without giving them VAT benefits. In this circumstance however, the Government is encouraged to consider

that heating fuel is seen as a 'necessary' social expense and is subject to a much reduced VAT rate. Entry into the Data Revolution is a similar social expense and as such the investment made to ensure our leadership should be considered in the same way. This would act as a huge incentive to inward investment, and allow the UK to truly become a global leader in the Data Revolution.

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Broadband UKvii. Remove Ofcom responsibility from this sector

They have proven to be ineffective, obstructive to progress and demonstrate no understanding of the market space. The consequential reduction in funding could be redirected to mitigate the costs of the desired outcomes activities.

Additionally, a replacement regulator, headed by ex industry professionals should be established to regulate fibre frequencies; special planning powers etc This should be a body with strong autonomy (within parameters) to allow it to keep pace with the industry in a way that is currently not possible.

If Ofcom do not lose responsibility for this sector there is a strong possibility that it will be impossible for organisations to deliver in an appropriate manner in any event. Ofcom do not understand the space for which they have been given responsibility; cannot move quickly enough to reflect the ever changing landscape, and (possibly most importantly) negatively impact rather than positively encourage competition in the space.

Immediate removal is recommended, so that there is a clear and unambiguous message to the market space that the Government truly wish to see a fast pace of improvement for the nation.

viii. Organisations that previously qualified (already have 100% of their customers on 100Mbps+) should have benefits backdatedThis would send an absolute message to the market space of the commitment of the Government, and would not retrospectively penalise the very few organisations that have already demonstrated this thought leadership.

Rewarding thought leadership is an extremely positive action, and carries the absolutely clear message that the Government wishes to encourage this type of innovation and action.

By post rewarding those that are prepared to commit themselves to the cost risk that benefits the nation, encouragement is given to thought leaders who may be reticent to adopt such risks in the future.

This industry will continue to develop and the message that the Government will review those that contribute and reward if they can, will assure our continued leadership of the Data Revolution.

ix. Planning restrictions for cable installation etc to be relaxedWhilst there is no desire to create a 'free for all', planning cannot be allowed to take the time that it currently does. As such this system needs either to be relaxed and restrictions removed or to be fast tracked as a priority application. In any event, planning regulations should be removed as a barrier to activity.

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Planning constraints include; ducting; new cable installations; satellite dish installation; new hub/exchange building; road side cabinets; overhead cabling. Whilst (as previously asserted) there is no desire to see a free for all in these areas, we cannot allow undue restriction to slow the installation progress.

As such it is likely that a combination of gentle softening of planning regulations, together with a fast track processing of all applications in this area is almost certainly the most advantageous course of action.

If required this could be given a review period, so that changes could be frequently examined for any undesirable outcomes and modified accordingly.

x. The £800m already allocated should be disbursed as incentive paymentsThis money is currently allocated to the purchase of infrastructure contracts to meet a paltry 2Mbps+ for the nation. These contract negotiations should cease where commitment has not yet been made, and instead be replaced by a series of bounties. Most appropriate way of disbursing these funds would seem to be in non-geographically ideal locations.

Once businesses have established themselves in localities, there is much evidence to demonstrate that the market matures and establishes quickly, giving sustainability.

One method that would certainly attract market space attention would be to place bounties on particular geographies. Selecting an area, and declaring it a special consideration area that would attract £x hundreds of thousands in cash payment, in addition to the other incentives would allow investors or organisations to see that their investment capital will have a direct cash return at the point that all residents can achieve 100Mbps+.

Clearly this is a blunt tool, and would need much more careful consideration than offered in this document, but cash incentives in addition to the operational benefits derived by qualifying organisations would further incentivise the market space to actively seek to deliver in areas that would ordinarily be marginal in terms of profitability.

xi. Consideration towards enhanced EIS for investing in new companies delivering the Desired OutcomesCurrently EIS stands at 30% relief with a maximum personal annual investment of £500k. It is recommended to move the relief to 50% and the limit to £2m for qualifying companies with a backdating consideration where companies can demonstrate pre-qualifying status.

Whilst there is always a reluctance to be seen to giving enhanced rewards to those

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Broadband UKindividuals in our society who hold significant personal wealth, when it is for the benefit of the nation, we must swallow our collective pride and reward the risk they take in such investment when it is for the collective good. I have no difficulties with giving significant benefit to wealthy investors when the result for the Nation is equally significant.

Inward investment is not always about attracting funding from overseas, often it is simply a case of preventing the funding that could be available being utilised to the benefit of another nation.

If there is a direct choice for a wealthy individual between overseas investment and UK investment, it is our duty to make the UK investment the most attractive one.

There is no real perceived impact to the Treasury for this action as it would bring new investment funds to the market space, rather than simply redirecting other investment funding.

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EXAMPLE COSTING OF NEW GOVERNMENT MARKET INCENTIVES

Activity description £000s cost

£000s benefit

Comments

Direct payments to organisations satisfying the desired outcomes

800000 These funds are already allocated by the Government in various forms

Loss of taxation from organisations satisfying the desired outcomes

1000000 Estimated figure based on assumed taxation payments, and existing regime for corporations and VAT

Loss of taxation from individuals working for organisations satisfying the desired outcomes

50000 Reduced taxation for those individuals (assumes £5k in lost taxation for 10k people)

New import duty for new hardware 27600 Assumes hardware (including ancillaries and cable) is 2% of VAT collected, and will see a 30% increase to duty paid (based on 2010 budgetary figures)

New VAT duty for new hardware 48600 Assumes hardware (including ancillaries and cable) is 2% of Excise Duties collected, and will see a 30% increase to duty paid (based on 2010 budgetary figures)

New VAT duty collected for new economy activity 81000 Conservative estimation based on entire economy increase of 1%, (based on 2010 budgetary figures), as a direct result of new telecommunications activity

New corporation tax collected for new economy activity

43000 Conservative estimation based on entire economy increase of 1%, (based on 2010 budgetary figures), as a direct result of new telecommunications activity

New income tax collected 150000 Conservative estimation based on entire economy increase of 1%, (based on 2010 budgetary figures), as a direct result of new telecommunications activity, and new income tax collected being directly proportional

New NI collected 9900 Conservative estimation based on entire economy increase of 1%, (based on 2010 budgetary figures), as a direct result of new telecommunications activity, and new income tax collected being directly proportional

Reduction in benefits paid (due to new employment) assuming a 5% reduction in unemployment

405000 This calculation is based on reducing the total cost for unemployed (based on a report commissioned by M Hoban 2007), and estimating the benefit of a 5% reduction to that figure adjusted for higher

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Broadband UKActivity description £000s

cost£000s benefit

Comments

unemployment

Overall savings on listed Government saving, assuming a net saving of 3% per activity area due to less costly communications; reduced printing; lower cost of transactions etc

192000 Listed areas of cost reduction of 3%: Housing and Environment (£27bn), Health (£122bn, but an estimated administration cost of £5bn used for calculations), Personal social services (£32bn)

Cost to administrate the desired outcomes scheme 100000 Assumes that these would be new costs associated only with this method of market space intervention although these may already be covered with existing regime

1050000 1046200

Net cost to treasury £3 800 000 per annum at this activity rate.

Assuming that the £800m has already been budgeted and is subsequently available to 'spend' then this activity rate could either be vastly increased or maintained for the next 210 years.

It should be noted that this is not a Chartered Accountant, or Treasury view of the proposed change in the Government spending, it is intended that this figures be used as the starting point for understanding that there is a significantly better way of changing our economy, and that it is absolutely possible to do this without failing to meet our austerity measures.

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CONCLUSION

By clearly defining what the Government will reward, it then allows the industry to decide how to achieve those outcomes. The industry know (or will innovate) far better than a Government ever could, regardless of how well informed that government believe that they are.

At the point that the UK Government decided that they would fund fibre installation (albeit presented as investment in ubiquitous 2Mbps+), the UK was condemned to remain as a bit player in the Data Revolution.

Allowing the market to decide how to achieve the Desired Outcomes will result in, new entrants talking with established players for specific geographies; large companies collaborating with smaller or even new entrants.

All will be seeking to achieve the same set of Desired Outcomes, in order to benefit from the rewards offered by the Government for achieving these outcomes.

By removing the ambiguity of the outcome, the Government is able to be truly technology agnostic, and allow the market to find its own solutions to deliver those Desired Outcomes.

Whilst the nature of achieving those Desired Outcomes is not assured, the reward for achieving the outcome must be.

It is my opinion that it will take a braver Government than the one that we have in place to implement these, (or similar) planned steps.

Without this, or something similar, we condemn the UK to a future economy that

will be nothing like that which anyone can remember.

Our citizens will see their standard of living eroded in a manner that is practically inconceivable today whilst we watch previously 'minor' economies attract massive inward investment, and their citizens enjoying an increasingly good standard of living.

Compared to failing to lead the Data Revolution, the economic slump that we are experiencing will feel like losing a pound coin down the back of the sofa.

I'm unable to deliver this plan, but it is beholden upon those who believe they hold knowledge to shape our future to share it with those that can deliver it.

This document is not the answer, but it does show the direction toward that answer.

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APPENDICES

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B4RN

3B4RN is an exemplar of what is possible.

Broadband for (4) the rural north, would ordinarily be lauded as prima facie evidence that Government intervention at a minimal level is all that is required.

No public funding has been received by B4RN, and yet all of its subscribers will enjoy 1Gbps fibre connectivity. There are no other product ranges to choose from, the minimum and maximum speed is 1Gbps symmetrical (upload and download speeds are the same) access to every subscriber. The only other element that can be added is VoIP, which allows subscribers to dispense with their copper line from BT altogether.

Monthly charges are £30 for the bandwidth.

The initial investment has been generated through the sale of shares in the company, which is then used alongside a volunteer labour force, and installation of cabling in field margins (with no wayleave costs) and gardens.

Equipment costs (including CPE, cabling, ancillaries etc), together with backhaul costs are the only expenses the organisation has. There are no salaries in the initial 12mths, and other than a small interest return programmed to be paid to shareholders, the primary reason the company exists is to solve their local bandwidth issues.

As an exemplar of what a society can do, it is possibly the best of its type in the UK.

And we should collectively be ashamed of the fact that they exist.

Whilst, the UK has enjoyed a history of individuals and small groups coming together to solve problems, in our history we have held this examples up to the world, and replicated them until it becomes the norm (interested readers may wish to look at our mains electricity network history for a practical example of this).

With B4RN they have been, for all intents and purposes, ignored. No government support, BT constantly pointing to 'issues' and 'low practicalities' of the installation that has taken place.

£800m has been allocated by the Government to companies that are in excess of £20m in annual turnovers. B4RN of course do not fit into this category, and yet their service is virtually without peer in the industry.

The B4RN model is entirely unsustainable on a UK scale. It takes extraordinary individuals to run a Limited company, without salary (even for the initial setup period), but with the burgeoning responsibility to their community. Such a group of individuals is rare, and we cannot place the future of our nation on the hope that sufficient similar groups can be found.

3 http://b4rn.org.uk/ - inaugural dig took place in March 2012

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Broadband UKWe should also be rewarding such groups, where they exist, and positively encouraging their success. By doing this we create an upswell of positive action that can contribute to the UKs success as a whole.

The proposed Government market intervention suggested in this document would allow the B4RN volunteer Board (at least for the first 12mths) to consider making a career of what they have done, and would allow us all to benefit from their skills by getting them involved in other regional projects; start up companies and established multi-nationals alike.

Removing the initial voluntary aspect of what B4RN do would not detract from their success, it would reward it, and allow us to demonstrate to other regions what they can do, and how they will be rewarded for helping us all to become leaders in the Data Revolution.

B4RN have already done more thought leadership for the Data Revolution than our Government, and yet if one read the Press it would be easy to think that the Government is securing our future.

Roll something similar to B4RN out across the UK and we have a chance. Follow the existing folly and we do not.

Simple.

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ALPHABETICAL INDEX

3G................................................................................................................................................................... 13p., 214G................................................................................................................................................................... 13p., 21Bandwidth..........................................................................................................7, 11p., 14p., 17, 26, 30p., 45BDUK.....................................................................................................................................................3, 11, 21, 24Broadband................................................................................3, 6p., 9, 11, 13, 15pp., 21p., 28, 32, 45BT..........................................................................................................6, 11, 14, 16p., 21p., 24, 26, 33, 45Cloud................................................................................................................................................................... 6, 33Data Revolution.....................................................................................3, 7, 9, 14, 18, 31, 35pp., 43, 46DCMS................................................................................................................................................................ 11, 23Digital inclusion...................................................................................................................................................30Economy......................................................................................................................................................................

Economic................................................................................................................................................................

Economy...................................................................................................6pp., 13p., 29p., 34p., 41, 43

Gbps.....................................................................................................................................................................7, 45Google.....................................................................................................................................................................12Government................................................................................................................................................................

Governments........................................................................................................................................................

Government................................................................3, 6, 8, 11, 13pp., 21pp., 26pp., 41pp., 45p.

GPRS......................................................................................................................................................................... 13GSM.......................................................................................................................................................................... 13Healthcare..........................................................................................................................................................31p.ISP...................................................................................................................................................................................

ISPs...........................................................................................................................................................................

ISP..................................................................................................................................................................... 6

ISPs.................................................................................................................................................................................ISP........................................................................................................................................................................... 6

Lte................................................................................................................................................................................ 8LTE............................................................................................................................................................................. 13Market space............................................................................4, 9, 11, 17, 21p., 24, 27pp., 33, 36pp., 42Mbps...........................................................................3, 6p., 9p., 12pp., 20, 25p., 28, 30, 34, 36, 38p., 43Ofcom.................................................................................................................................9, 11, 16p., 21, 25, 38Petabyte..................................................................................................................................................................... 7

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Broadband UKQoS.................................................................................................................................................................... 25, 36Satellite..................................................................................................................................................... 13, 35, 39Smartphones.........................................................................................................................................................14Social mobility......................................................................................................................................................31Social Mobility...................................................................................................................................................... 31Social networking..................................................................................................................................................7Socio-economic.................................................................................................................................17, 29p., 33Super connected cities......................................................................................................................................24Treasury..................................................................................................................................29, 33p., 37, 40, 42VoIP...............................................................................................................................................................7, 25, 45WiFi....................................................................................................................................................................... 13p.WiMAX..................................................................................................................................................................... 13Wireless................................................................................................................................................................... 13Wispa Limited....................................................................................................................................................3, 8

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END NOTES

i Superfast – currently has no true definition but is commonly accepted to be 100Mbps+

ii BDUK – Broadband UK is the working title for the funding that was handed to the DCMS to incentivise the communications market space to achieve 100% population coverage of 2Mbps+ amongst other things

iii Data Revolution is the author's attempt to describe what is currently happening on a global economic scale, and it's direct comparison to the Industrial Revolution (1750-1850)

iv ISP – Internet Service Provider

v The cloud is a generic term that tries to describe the way that data is often no longer held locally (on a user PC for example) but is available in a non specific geographic location on a (series of) non specific data site. The cloud refers to the ephemeral nature of the data itself being less important than the ability of the user to access and manipulate the data.

vi http://www.genscript.com/gene_synthesis.html is an example of a company that will synthesise DNA and send it to you for approximately $149 to allow you to conduct your own experiments

vii VoIP is the accepted acronym for 'Voice over Internet Protocol' which is a communications standard allowing voice (telephone) calls to take place over the digital infrastructure (internet) without the need to utilise traditional telephony systems.

viii Luddites - The Luddites were a social movement of 19th-century English textile artisans who protested – often by destroying mechanized looms – against the changes produced by the Industrial Revolution, http://en.wikipedia.org/wiki/Luddite

ix More information on Tim Berners Lee can be found across the internet or on wikipedia: http://en.wikipedia.org/wiki/Tim_Berners-Lee

x 'Stephenson's' refers to the engineer Robert Stephenson and his enthusiastic acceptance of steam powered locomotion

xi Fibre or Fibre optic cable refers to captured glass strands (tubes) that are used to send light pulses which are decrypted at the receiving end into data. The theoretical maximum speed for this transfer of data via light pulses is the speed of light, making it an extremely rapid and capacious data transfer method.

xii Smartphone refers to the most recent generation of mobile phones, that are in fact mini computing devices. iPhone, and Android devices all fit squarely in this category.

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Broadband UKi

ii BDUK – Broadband UK is the working title for the funding that was handed to the DCMS to incentivise the communications market space to achieve 100% population coverage of 2Mbps+ amongst other things

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Broadband UK - Ubiquitous, superfast (100Mbps+) delivery is achievable

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