The war of words on the Ofcom Communications Market Review continues and Sky has published for all to read a summary of its final submission to Ofcom and we expect there to be a counter argument from the BT Group soon.
"We believe that for the UK to keep up with the rest of the world the focus has to be on investing to make Gigabit broadband widely available to homes and businesses. It’s what our international competitors are doing. The New Zealand government has accelerated roll-out of fibre to 80% of the population by 2022. In Japan and Korea, more than half the population already receives connection speeds above 100Mbps.
Openreach’s ownership structure means that companies that compete with BT, like Sky and TalkTalk, cannot work with Openreach on innovations like fibre to the home. And, with no prospect of BT’s retail arm using an alternative high speed fibre network to deliver services to customers, there is limited scope for new infrastructure entrants as they would only be able to compete for Sky and TalkTalk’s business.
The current market structure has enabled ambitions to remain modest, with Openreach’s total capital expenditure remaining broadly flat over the last few years. Even now, when the opportunity is so clear, the plans BT have already shared for Openreach such as ‘G.Fast’ still rely on the old copper network when we know that we can only achieve the speeds the UK needs with fibre."Extracts from Sky summary of market review submission
The Sky statement is interesting in that there is no mention of rural issues and the 48% availability of ultrafast broadband connections from Virgin Media is neatly side stepped. Rather telling is that while Openreach FTTP availability is low at just over 1% in England both Sky and TalkTalk have to date refused to sell the Openreach service, would that change if Openreach overnight became an independent operator or would it require a revamp of the product at the direction of Sky and TalkTalk?
The massive problem facing Ofcom is that being bold can produce massive benefits but it can also fail in a really bad way, and with increasing calls for more speed now and not after a 10 to 15 year nationwide FTTP/FTTH building programme, it has to balance short term with long term.
Ofcom has a very tricky balance to strike between the urban, peri-urban and rural parts of the UK, the majority of urban areas already has a choice of local loop providers and if CityFibre, Sky and TalkTalk deliver 10 million are probably going to have a choice of the unreliable Openreach copper network (borrowing Sky phrasing), Virgin Media DOCSIS cable network and Gigabit FTTH.
Outside the various polls the issues appearing fromn the general public are usually:
A doctor being able to download a GigaByte image file in 8 seconds is better than waiting 100-200 seconds to download it over a VDSL2 connection, but is the benefit much better than say having to wait 25 to 30 seconds? Gigabit is transformative but how often does a doctor need to consult with such large data files when outside of a normal hospital environment? Coming up with uses for Gigabit is easy, with the Internet of Things being an often quoted favourite when it reality the things benefit most from wireless connectivity with a relatively low latency rather than raw speed.
Maybe the choice for Ofcom is between the devil you know and creating a new beast that may or may not deliver all that is promised.