How cuts are deepening the digital divide
Public financial support for high-speed broadband has become one of the less publicised areas to be affected by government spending cuts, which has delayed the planned roll-out of services to areas that are hard to reach.
High-speed broadband refers to speeds of access in residential households at above a level commonly regarded as around 24 Megabits per second (Mbps). There is some imprecision around this figure and this short overview does not aim to go into too much technical detail. This would place such access speeds beyond the capacity of the existing technology delivering telecoms services to your home.
Currently most people ‘get by' on much lower speeds than this: currently, Ofcom reports that average line speed is 6.2 Mbps and so the average person would, theoretically, not yet notice the limitations of the existing technology. The BBC's iPlayer service can, even in its high definition variant, be delivered perfectly satisfactorily over a speed of 3.2 Mbps.
However, 24 Mbps represents a figure which few people can actually experience via their existing telephone lines and it is also true that average speeds have increased in recent years. In 2005, average broadband speeds were around 2 Mbps. We also know that speeds drop sharply at peak times: the network is not capable of delivering such speeds reliably at a time when many people are accessing the network. Add to that the increasing levels of simultaneous multi-access, even within a home, and the problems become considerably sharper.
It is also important that average broadband speed in rural areas is also, at 3.4 Mbps currently, less than half that applying in urban areas (7.3 Mbps).
Increasingly higher speeds place much greater demands on the network so operators have been looking to change the technology towards implementing fibre technology in place of traditional copper in the ‘last mile' of the network (i.e. from the exchange to the house). Much of this technology is already in place at higher levels of the network; it is the ‘last mile' which presents the most significant bottleneck to the delivery in practice of greater speeds to the home.
What is the importance of broadband speed?
What can be done with all this greater access speed? Well, some applications are not yet evident because they can only be developed once speeds have become higher. But we do know that there are interesting potential applications in the area of e-health and the care of older people in their own homes, while faster access speeds will, in general, make internet browsing a smoother and more pleasant experience for everyone. It will also encourage the development of better services, including from government, as well as support the economy through application and leadership in areas which are technologically critical.
The investment demands required by this new technology are expensive. Estimates as to the cost vary according to the precise type of technology used (and its capability to deliver future-proof access speeds), ranging from £5bn to up to £28bn.
At the top end, this is evidently a major piece of infrastructure investment, carrying significant economic and social benefits, and significantly beyond the scope of the industry as currently organised. Costs also increase the further we go into rural areas, where the investment case is much less certain, since it is much less likely that operators making this sort of investment will be able to earn a sufficient rate of return based on current financing expectations. Indeed, experts consider that a minimum of £2bn in public financing would be required to deliver high-speed broadband meeting even the most basic definition.
In combination, these two elements - expense and the urban:rural divide - have led Prospect to argue, over a period of several years, for a role for public financing of fibre technology. Under the last government's Digital Britain initiative, there was a proposal for a duty on fixed telephone lines of 50p a month, which Prospect supported on the grounds of the sizable benefits households had gained in recent years as a result of price falls. This levy would have raised up to £175m per year - about £1.3bn in total - which would have been used largely to roll out high-speed broadband where it would otherwise have been uneconomic to do so.
These plans were, however, dropped in the run up to the May 2010 general election. Instead, the government will put at the disposal of Broadband Delivery UK, the vehicle charged with implementing the government's broadband strategy, money from the BBC licence fee totalling £530m in the current spending review period, plus a further £300m extending beyond this parliament to the point where the current BBC licence fee regime runs out (i.e. in 2017).
This is lower than would have been raised by the landline duty - and it is not, as the landline duty would have been, new money. It represents, therefore, a cut in the sum of public financing being made available to support investment in high-speed broadband. It is also absolutely insufficient in the face of the requirement.
Prospect has grave doubts that the ambition of the government - to have the ‘best superfast broadband network in Europe' by 2015 - can be realised with such a low level of public financial support. The union is also unhappy about the cut that this represents in public financing terms, and about taking money from the BBC licence fee for this purpose. Leslie
The union believes the government needs to come up with credible plans and real money, based on proper levels of public investment, if it is to be able to prevent a digital divide from opening up which will hamper this country's emergence from recession.