Broadband – at some point, perhaps

There was a reference in today’s Queen’s Speech to one’s government ‘enabling investment in high-speed broadband’, but there was not a lot of detail in the accompanying announcement from No. 10.

However, it does look a bit more hard-line on the issue of the primacy of the market than the Tories’ pre-election pronouncements on the issue, if only in the apparent absence of a Plan B (although, to be fair, the Queen’s Speech is evidently a promise of the legislation due to be brought by the government to come (or, in this case, which may, or may not, need to be brought) rather than a place for discussion of the merits of the hows). I’m not at all convinced that ‘ensuring a strong, competitive, market-led approach to next generation broadband roll-out’ is going to see that roll-out actually achieved in practice ‘across the country’. I can see the argument that the costs of civil infrastructure are a large part of the overall costs of installing communications infrastructure, and that easing this might help better make the case – but I have two responses:

– I would suspect that what is more important in terms of prioritising investment cases (i.e. urban or rural, since this policy is designed to help improve investment cases in rural areas) is less the quantity of the initial capital expenditure input and more the long-term return that can be made – though both are clearly linked. The long-term return is much more difficult to work out in rural cases for the simple reason that there are fewer people about and less multiple occupancy – in combination, they make rural areas poor prospects for decent returns, even if the costs of the initial expenditure are (or may potentially – see below – be) lowered as a result of this sort of approach

– I’m also particularly unpersuaded about the efficiency of the case for competing infrastructures. It seems to me that this is likely to lead to over-provision in some areas and under provision in others: the market is just not that good an allocator when it comes to infrastructure investment projects. And, where investment is so expensive, as high-speed broadband infrastucture is (up to £29bn, in the case of a particular type of fibre to the premises solution), isn’t it more efficient from the perspective of getting everyone linked up that we don’t waste resources by over-concentrating them, perhaps with a role for public funding thrown in, too? (Oh – I forgot. We had an election.)

On top of all that, there is the issue of the capacity of BT’s ducts; here, Ofcom published a report from Analysys Mason yesterday saying that duct capacity can be particularly small in the last sections of the network going to the customer, so there is much less space available for competing network investors to install their own pipes anyway. This clearly mitigates against seeing the use of ducts as a remedy, probably not least in rural areas where the ducts are likely to be older (and, therefore, built for less, er, competitive times) than they are in urban ones. So, in many cases, duct access is not likely to be a remedy at all – particularly in those areas where, apparently, public policy is relying on it most of all. Above all, stretching the infrastructure to do what it was not designed for is simply not a 21st century solution to the country’s needs for a modern communications infrastructure.

What the Queen’s Speech says to me in this area is that this ConDem government remains committed to a roll-out plan for broadband which is:

(a) heavily reliant on the Tories than on any contribution the LibDems might have made (somewhat strange given that BIS, headed by the LibDem’s Vince Cable, is the lead department here, given that it supervises Ofcom, even if Ed Vaizey is the broadband minister – and that’s a recipe for chaos, even if Vaizey is shared between DCMS and BIS); and

(b) heavily reliant on a wing and a prayer rather than anything which seeks to facilitate, encourage or support.

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