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Tuesday, 6 July 2010

Balancing the books to justify NGA investment

Off go the supposed great and good of the telecom world to meet the newbie government in July, and once again, we could be setting the scene for a lesson we have already learned the hard way in the past to be repeated.

This blog post can be read at

The Americans have just realised that when you leave the telcos to it, you have a lack of competition and innovation, resulting in a digital divide. We in the UK know that when you leave the telcos to it, you have limited competition (i.e. for years they all just flogged exactly the same product), a business-model driven approach to innovation i.e. bugger all in case the shareholders get jittery, and a digital chasm.

Over and over again, we see the same statements being spouted about next generation broadband/access/networks, and the same people consulted on how to do it. Without sufficient evidence, debate or discussion about why these statements are still as untrue as when they first entered the public domain, or these people are the wrong people to advise. I'm going to pick on one statement which has irked me out of my bit mine as it keeps being said and no-one seems to be disputing it.

“Rural next generation access is not financially viable”.

Says who? Ah yes, the telcos. So, here's my take on it as I'm not invited to the meeting in July and am bored after 15 years of shouting into the vacuum that is Westminster anyway.

When we look at the cost-benefit equation for building any new service or utility (think railways, canals etc), do we, with the benefits of hindsight in the case of railways and canals, say that those utilities have only provided a financial return on investment? Or do we look at the untold myriad, and possibly infinite, benefits that have been reaped that are a) not directly related to the initial investment or returned to the initial investors and b) are social benefits to the community as a whole?

What we are endeavouring to build here is not some built-in obsolence product/service with a short lifespan, but a long-term communications network that really will be about the NEXT GENERATIONs e.g. our kids. If those building the canals had had any comprehension that canals would not be used for shipping coal at all, but for leisure activities, they would probably have been horrified that there would come to pass a world where people had so much free time and spare cash to squander they could block up these precious conduits of commerce.

They would also undoubtedly have attempted to cash in as much as they could during their own lifetimes to get the biggest bite of the cherry. This in itself could have driven the assets to unsustainability and seen them fail, but luckily, we had a culture of innovation back then; it was, after all, a time of revolution. Industrial revolution. New and wondrous things were appearing each day to progress society, not just to fill commercial pockets. Like the railways....

Around 40 years ago, I fell in a canal - the Erewash. Its supposed guardian had allowed it to become overgrown, unused and derelict following our favourite chap's closure of the canal in 1963 (Beeching). A band of enthusiastic volunteers had the vision to start restoring it so that it could be of use again. Not to ship coal and goods up and down the country as was its original purpose, but to enjoy with narrow boats, dinghys, and in my case, wellies.

There were few grants for such activities back then, and money was raised in the time-honoured fashion of the Brits – coffee mornings, jumble sales etc. Few in authority had the vision to realise, unlike the people who lived along it and wanted to use it, that here was a resource that had yet more life to it than as an ancient, deteriorating relic of times gone by. All they could see was a problem with no future they could imagine and that would be expensive to face up to. (See the parallels yet?!)

So, the restoration was carried out by volunteers, giving up precious time, skills, experience, knowledge and energy until it became blatantly obvious to those in positions of so-called authority, who had done little to nothing up to that point, that here was a genuinely awesome asset. Of course, they suddenly realised its potential and viability and took over again to reap the benefits.

Grassroots activists, volunteers and visionaries did the hard work. They JFDI and made the unthinkable happen. Look at the Erewash Canal Preservation Society website and see what a difference that canal has made to the community it now SERVES. The photo on the homepage is of Langley Mill Basin, which on its opening day in 1970, I managed, for once, not to fall into whilst in a dinghy with the team clearing out discarded beer cans and bottles from the celebrations. To see so many boats in the photo is truly awe-inspiring - we achieved that?!

Not only does the canal now provide a direct income (e.g. to British Waterways); it also provides untold indirect incomes along the length of the canal, in villages that border it, to nearby transport providers, boat hire people, cycle hire, cafes, pubs, shops, you name it who earn a living from the visitors to and users of the canal. Those who originally built it would be astounded at its commercial reach as a leisure asset.

But, most importantly, it has brought life back into the community. It has indisputedly contributed directly to the WELL-BEING of the community, to those whose lives it touches (and touched, somewhat wetly, in the past), and this well-being no doubt radiates outwards in ripples. Go on a boating holiday on the canal and you will return to work refreshed and invigorated, I promise. (Even if your sprog tries very hard to drown and ruin your day.)

Can that well-being be measured? Yes, but not necessarily in fiscal terms on a spreadsheet. Can it be seen and monitored and felt? Yes, yes and yes again.

If we cannot learn from the canal and railway builders, from those who put in electricity before we even had the national grid, who dug water into villages before the Water Boards etc etc etc, and apply the lessons that financial return on investment is almost bordering on irrelevant in these cases of utilities, we are going to go nowhere in achieving next generation access AS IT SHOULD BE DONE. We are not building something that is only going to pay back to its original investors and builders; we are building something that will change lives. Not just of our generation, but of the next and next and next.

If we permit those who ONLY have a financial interest in the short-term to direct the plans for next generation access, we have failed completely to learn from history. We will have failed our children and their children. We will have let ourselves down. We will let down this country, its citizens and both our present and future economies.

Saying that it is too expensive ignores the very real benefits that will come, which will reach far and beyond the pockets of the initial investors, and touch lives far into the future. How much do we value our citizens and their well-being if a cost of £1000 per head (and that's being monstrously generous) is TOO EXPENSIVE?

If each citizen who uses the Internet, let alone who uses next generation access and all that will do, can potentially save at the very least £600 per year personally, according to Martha Lane-Fox, then how can rural next generation access, where the savings are likely to be considerably higher, ever be too expensive just on that front alone? Oh, is it because, p'raps, that £600+ doesn't go to the telcos? Of course it will be spent within those communities (blue pound) or on whatsoever that consumer decides to spend it on, won't it? This in itself could help to offset some of the jiggery pokery that has been caused by the recession and will be caused in the months and years to come as we face national cuts. And even more benefits can be reaped if the asset is owned by those self-same communities not a self-serving telco.

But on a non-fiscal level - how can you put a price on the well-being of communities? How can you allow commercial companies to dictate whether or not that well-being can be enjoyed? It's like saying that everyone who starts an e-commerce business has to give the telcos a cut of their profits for providing the internet connection, or that internet connectivity can only be used for non-commercial activities because the telcos aren't enjoying the fiscal return.

The well-being of a community cannot be measured in £££s, but its impact often can. More people to run the school fete means more people to promote it to friends and family, more money to spend at the end, less reliance on other means eg LEA to keep the school going, a better school environment for the kids, happier parents, after school clubs so parents can work longer if they choose etc etc.

The cost of installing next generation access will fall to a few; there can be no doubt about that. But the returns must be enjoyed by the many, or we have failed to comprehend the real value of what we are trying to do. And to get to that day, we must accept that next generation broadband is never too expensive, wherever it may be, because of the community and citizen well-being it will engender.


GuyJ said...

Great Post!

The opportunity that local communities everywhere have to rebalance the terms of trade in their and future generations favour is not to be missed.

Or rather every community, every Parish Council needs to be able to make an informed choice as to how they want their 4th Utility to be operated, by whom and in whose interests.

The NextGenUs approach of providing CIC safeguards is one model and there are others, what is important is that people are empowered to choose.

Cyberdoyle said...

wow. that is some post.
I just hope the powers that be read it...
I think I have made the same comment on this blog in the past...
why don't they listen?

Cybersavvy UK said...

Very interesting piece here as a follow up which is a critique of this article here

P'raps Ofcom, the new Govt and others would do well to note the last line:

As George Santayana wrote, “Those who cannot remember the past are condemned to repeat it.”

MB94128 said...

Cybersavvy UK's links :

"Albert Gallatin and the First National Broadband Plan" [1808] (Larry Downes, 10 May 2010)

Broadband Policy Watch response (5 July 2010)

Cybersavvy UK said...

Thank you MB94128, I knew I could rely on you ;o)

I've read my way through all the links to and from those docs this eve. If anyone needs some historical light reading that lights some bulbs in your mind, I strongly recommend these. So much to consider in the current climate....

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