Superfast Broadband - Evidence - Parliament

GreySky Consulting – written evidence
3.10 The requirement for an Open Access Wholesale Network efficiently meets
these requirements for retail choice (for users) and market access (for ISPs).
3.11 However, an Open Access Wholesale Network is expensive and complex.
The Digital Region in South Yorkshire has demonstrated that technical
capability and significant investment alone do not provide the two
requirements. Despite significant public investment in the infrastructure, ISPs
and end users have failed to be attracted to the network.
3.12 “The Market” will provide retail competition in the “first two-thirds” of the
market using their own investment. The BDUK and local authority funded
projects will deliver services up to 90%. These are not genuinely hard-toreach
areas. Requiring an Open Access Wholesale Infrastructure to support
retail competition among ISPs in these projects appears fully appropriate.
3.13 However, the final 10% presents a much more challenging environment for
commercially sustainable services. Insisting on the requirement of a full Open
Access Wholesale Network in the final 10% risks leaving them with no
superfast infrastructure. It is necessary to reduce the barrier to delivery in
the final 10%.
3.14 It appears that reducing the barriers to provision of service for the last 10%
may require separating the considerations of bandwidth from the issues of
services and content.
4. Bandwidth Availability
4.1 Although the strategy is to provide “at least 2 Mbps” to the last 10%, the
approach taken to the rollout of the BDUK funded broadband programmes
appears likely to result in only 2 Mbps, and will establish a higher barrier to
the provision of improved services once the 2 Mbps services are delivered.
4.2 Current interpretation of State aid requirements separates basic broadband
services from superfast broadband services. This was established to allow
public sector intervention to establish superfast broadband services in areas
where good basic broadband services were already available. In areas where
broadband is available at 8 Mbps, it is still possible to invest to promote the
availability of superfast broadband at 24 Mbps or faster.
4.3 However, the interpretation appears also to be considered to operate in
reverse. Where reliable open access broadband is available at 2 Mbps then
public sector investment in infrastructure is only permitted where the
resulting infrastructure will deliver at least 24 Mbps (and preferably 30 Mbps).
4.4 Currently available technologies to deliver 30 Mbps are prohibitively
expensive for sparsely populated rural areas. However, reducing the
bandwidth requirement to 15 Mbps would allow significantly greater
deployment. There is a significant practical difference between 2 Mbps and 15
Mbps broadband services – and arguably little practical difference at present
between 15 Mbps and 30 Mbps. 15 Mbps is more than sufficient for most
domestic and small business internet use. This will change over time, but it
can be expected that over the same time period, the capabilities of the
installed technologies will also improve.
4.5 Reducing the bandwidth requirement for the superfast broadband market in
the most hard-to-reach areas will help to reduce barriers to implementation.
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