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Tuesday, 20 July 2010

Bringing Utopia to Eden

WRITTEN BY GUY JARVIS: At the BDUK Industry Day last Thursday, potentially the most important announcement was, perhaps surprisingly, not the three market testing areas (quite what there is to test about the engineering and economics of FiWi deployment that is not already known is unclear - the challenge to date has been funding the build phase)

This blog post can be read at

The most interesting announcement was the forthcoming Cumbria Conference to be held over the weekend of 18th/19th September in Penrith and hosted by Rory Stewart, newly-elected MP for Penrith and the Border.

The objective is bold and the timing is right:

The Government Coalition has a big idea, Building the Big Society, and one of the great things about broadband, that Rory and his team have begun to realise, is that it provides a focus for local communities to come together and bring about a common benefit, in the form of the 4th Utility.

The 4th Utility is shorthand for:

World Class - a moving and ever improving target - Kaizen is the key word, continuous gradual improvement

Killer cap is the killer app - eliminating the need to consider the availability of sufficient speed and quality of service is the definition of the 4th Utility.

A future proof telecommunications access infrastructure in the First Mile which makes concerns about network capacity are a thing of the past - speed becomes an irrelevance.

Communities at a Parish-by-Parish level should have the opportunity to make an informed choice of alternatives for how their 4th Utility is delivered and on what terms.

Building the Big Society

Is Building the Big Society an approach that will enable local communities to secure their Digital Futures?

Perhaps, so long as the process of localism, handing power to local communities to make their own decisions, is genuine.

The important point to understand is that the engineering and economic cost delivery models are finalised - the supply side of FttH and FiWi is settled.

And the proposition is simple.

If your community is ready to demand its world-class future-proof 4th utility then the economic model already exists for any capable service provider to seek to establish and deliver that service.

An interesting aspect of the CIC approach is the locking of the FttH assets so that they cannot be sold on to other than CIC alternative owners without the express direction of the CIC Regulator.

Governance is the long term determinant of the terms of trade balance, in other words, who owns the network determines the deal on offer to customers.

CIC is all about preventing the existence of divergent objectives, all about creating a positive nexus, a common set of interests, of shared purpose, between monopoly access supplier and local community of customers (digital consumers and creators both)

Best Value Taxpayer Funding

Where taxpayer funding for market testing projects misses the point is that it is promoting and rewarding a promise.

Better to derisk the proposition by rewarding delivery and look to standardisation not competition in access infrastructure and it is the governance structure that matters

Why does the Community Interest matter?

Such a valuable and natural monopoly as the 4th utility, a service that has an expected operational life at least equal to that of the copper wire metallic path telephone system i.e. the rest of this century, needs careful thought and informed action now to ensure the interests of present and future generations are foremost.

Better for a nexus between supplier and customer by design than allowing an adversarial relationship to emerge by doing nothing to challenge the telecoms status quo.

What is required to complete the 4th Utility jigsaw and realise world-class connectivity across the UK is for local communities to be positioned to make informed choices.

Choices about what happens after these new networks are built, how are they governed and in whose interests - shareholders, customers, both and if so in what proportion - do people come first or profits?

Provide each community champion with an information pack - can in a box - that identifies the actuality in their locality and the options available.

Regardless of our day jobs we are all 4th Utility customers

To maximise the benefits and compete globally, as customers, what matters, the test of success, is achieving the value for money at a price point that does not restrict accessibility for all.

This not to say that everyone must directly pay for service either.

There are transformational government services that may in themselves warrant providing 4th Utility access free at the point of use

When the savings on reduced transactional costs, e.g. on freeing up hospital space earlier by enabling independent living, outweigh the cost of access then it makes sense to provision that access free at the point of use.

This helpfully solves Martha's Race Online 2012 problem too.


Graham said...

In regards to using a CIC model, personally I would prefer the Community Benefit variant of the Industrial and Provident society model. It also provides for an asset lock, and avoids all the problems associated with the CIC model (probably the main one being the lack of autonomy and independence). The IPS model is also much more widely used and proven over more than a century of use.

GuyJ said...

The FiWiPie model has the flexibility to support a wide range of ownership approaches, and the important point is that each community be equipped to make their own informed choices, whether Commercial, Community Interest, IPS or otherwise.

A drawback perhaps with the IPS route is that it does not necessarily provide the best mechanism to attract the levels of investment of the significant private sector equity capital required to fund widespread FttH deployment.

The CIC model has been working well for a number of years for community broadband networks and that trend is increasing.