Stephen Timms and Ed Richards in front of Parliament inquiry
Having met earlier in November 2009 the Business, Innovation and Skills Committee has heard further evidence relating to Digital Britain and the Universal Service Commitment and Next Generation Fund.
Ed Richards, CEO of Ofcom outlined what they view as the three key factors
people take into account when buying broadband,
- Is it available?
- How much will it cost?
- What speed will I get?
The industry regulator placed great emphasis on the speed research it carried out earlier in 2009, which given it did not cover ADSL2+ fully is perhaps now looking out of date, and as a guide for the buying public may mislead. The biggest problem with speedtesting is that a test done today cannot predict what speed you will get tomorrow, thus while one ISP may have performed better during the testing in the first half of 2009, another may have improved its performance as more capacity has been purchased, or more likely a good ISP may have got worse.
The Minister Stephen Timms appeared to get a harder time in front of the committee with them pushing for the minister to actually define what the 2Mbps Universal Service Commitment (USC) actually means. The closest we got seems to be that virtually all households will get a line capable of 2Mbps at some point during the day. In other words it is the connection speed, not the speed you will see from a download in the evening. The danger here, particularly with the bidding process, is that the lowest cost bidder who offers on paper a good solution might be making the cost savings by using higher contention and thus the performance when the kids are home from school and people are not at work is so bad that even basic video streaming may not work. The committee was informed that the definition of the USC will be done by the Network Design Procurement Group, with the staff of this being appointed early in the New Year. This means the time frame to define the service, and accept bids and actually start work will be very tight if the deadline of 2012 for all those without broadband now to have a USC meeting service will be met.
The broadband levy/tax was covered, with the confirmation that those who have a Virgin Media cable broadband service, and the associated telephone service, will be paying the levy too. It was also heard that those with a telephone service over a pure fibre connection would have to pay. Exemptions for a number of low income groups will exist, but the Finance Bill will provide the detail. An interesting issue is that those warning that the tax may not finish when 2017 arises may have had their fears further enhanced, as it was suggested the tax may continue to fund further coverage.
What was interesting to observe was the disjoint between the level of certainty over where the commercially led Next Generation Roll-outs will go between Ed Richards and Stephen Timms. The minister seemed to be more sure that commercial roll-out will leave around a third of the country on first generation services, where as the Ofcom chief was less sure, citing examples of what a game changing effect TalkTalk had on the LLU market.