The government advisory body the Broadband Stakeholder Group (BSG) has published an excellent 118 page report on the pros and cons of investment in fibre-optic broadband infrastructure in the UK.
They used detailed financial and broader economic analysis to estimate the potential “private value” to businesses and broadband consumers; and the broader “public value” relating to economic and social criteria.
The BSG report asserts that the overall value to the UK economy of the wide-scale deployment of fibre-optic broadband could outweigh the cost of deployment, by as much as £16bn – assuming the fibre-optic broadband connections stretched to 80% of UK homes.
However, the BSG believes that the timing of the broadband investment will be crucial.
Antony Walker, CEO of the Broadband Stakeholder Group explains: “Next generation broadband has the potential to transform the way we do things as individuals, businesses and as a nation as a whole. It is tempting to jump in feet-first but it matters more to do this right than to do it now. There is a lot of uncertainty about issues on both the demand and supply side and much that we can learn from experience elsewhere without adverse affects in the short-term. On the other hand, the UK can’t wait too long. If widespread network deployment didn’t happen in the medium term (perhaps three to five years), then this report suggests that the UK could be losing out.
The BSG argue that more information is needed on several key issues before the correct broadband investment decision can be made. These are:
- The effectiveness of FTTC (fibre to the cabinet) broadband solutions versus FTTH (fibre to the home). The latter can offer far faster upload and download speeds.
- Clarity over UK broadband regulatory policy
- The availability of faster longer range WiFi (802.11n) from 2009 and long range GPON offer other alternatives to existing fibre-optic broadband connection technology
- Further information on ultra-fast broadband consumer demand in the UK.
However the report also warns that it will take longer to deploy next generation broadband than it took to deploy the current generation and that some areas might be beyond the reach of market forces.
So whilst doing an impressive job articulating the benefits of fibre-optic broadband in the UK, the report rather pulls its punches in terms of committing to a preferred deployment approach and schedule. So in the meantime it is up to Virgin Media and BT to continue the development of FTTC fibre-optic broadband infrastructure in the UK, whilst the government decides exactly what it wants to do. This is in stark contrast to the Australian government who have just agreed a A$40bn investment in FTTH fibre optic broadband in Australia – as we discuss in the note below.