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1.1.1 GreySky Consulting was formed in 2005 as an independent consultancy specialising in digital infrastructure and transformation. GreySky has become a respected contributor to the development of next generation digital infrastructure in the UK. James Saunby, GreySky’s founder and Consulting Director is also a board member and Vice Chair of INCA (the Independent Networks Cooperative Association) and a Fellow of the IET (Institution of Engineering and Technology).
2.1.1 We have asked this question several times at meetings and webinars in the sector. There is no genuine belief that it is achievable.
2.1.2 Recently in a webinar on the subject of the 2025 delivery hosted by Total Telecom and moderated by James Saunby, 61% of 181 participants at the start of the webinar voted that they did not think the 2025 delivery was achievable. At the end of the 1-hour debate 65% did not think it was achievable.
2.1.3 Although the ambition of providing gigabit-capable broadband for all by 2025 gives good clarity, there are aspects of this clarity that are un-helpful.
2.1.4 The ambition to deliver full fibre broadband to as many homes and small businesses as possible, and as quickly as possible, should be the driving force. Full fibre connectivity gives maximum future-proof flexibility to deliver an almost limitless increase in bandwidth. Full fibre delivers the infrastructure asset we need to drive economic growth and long-term social benefit.
2.1.5 The desire to spread the benefits of high bandwidth digital connectivity to all is important but requires flexibility. There is an expectation that Fixed Wireless Access (FWA) and other technologies will be required to deliver to some of the more difficult areas. Some of these technologies would provide a significant increase in performance from current capabilities but fall short of gigabit capability – too specific a focus on gigabit capability may hinder progress.
2.1.6 A wide range of significant measures will be required to facilitate the deployment. These will be addressed through responses to more detailed questions. High level issues include:
2.2.1 To deploy gigabit-capable networks rapidly is a challenge to almost every aspect of the delivery process – from access to data, to availability of construction teams, and capability of operators.
2.2.2 The scale of the challenge can be considered in terms of the topology of the existing network. To deliver superfast broadband through Fibre to the Cabinet (FTTC) technology, required the installation of fibre links from exchanges to the Primary Connection Points (PCPs – green cabinets) as well as other active equipment. The final connections from the cabinets to the end user property used the existing copper wires. To replace this with full fibre, all copper lines will need to be replaced with fibres. In a recent design exercise for Northern Ireland, GreySky established that fibres from exchange to cabinets accounted for only 6% of the overall network build. The construction of a full fibre network requires 15 times the length of cable to be installed compared to an FTTC deployment.
2.2.3 The FTTC deployment has taken nearly 10 years; upgrading to gigabit-capable is expected to take 5 years. This sheer scale and pace of construction presents a significant challenge. The planning, wayleaves and streetworks management systems and procedures currently in place struggle to support the current pace of deployment. It is not clear how they can be changed to support 30 times the pace of delivery (i.e. 15 times the length of cable in half the time).
2.2.4 The concern regarding the capability of existing procedures is compounded by inconsistency in application across the country. Highways Authorities & Utilities Committee (HAUC) England have developed best practice for streetworks management and continues to refine this guidance. Measures to ensure compliance with best practice by operators and by local authorities are required.
2.3.1 Outside In seeks to ensure gigabit capable broadband connectivity in the ‘Final 20%’ through direct ‘gap-funding’ intervention. To address the digital divide, gigabit capable services must be available offering similar retail choice and offers to other areas. Value for money in the short-term is ensured by competitive procurement; in the long-term by maximising infrastructure competition. However, the Final 20% is not expected to be able to support more than one infrastructure provider – direct infrastructure competition in the Final 20% needs to be minimised to ensure the efficiency and sustainability of deployment of the local access network. These potentially conflicting issues lead to a wide range of requirements to ensure success.
2.3.2 Retail choice is an important aspect of the Openreach service proposition that has been the dominant service experience for most users to date. Consequently, ensuring similar retail choice is available in all areas is an important aspect in addressing the digital divide.
2.3.3 In part because of the dominant position of Openreach, the major CPs (for example Sky and TalkTalk) have been reluctant to adopt alternative infrastructure providers for their service delivery – the additional market share has not warranted the cost and effort involved. This has been a topic of debate for many years among the independent network operators, and some of the larger independents have attempted to engage the interests of the CPs (apparently as a means of competitive differentiation from other independents). This effectively fragments the independent sector and helps to maintain the overall position of market failure relative to Openreach.
2.3.4 It is also understood that Ofcom is developing measures to ensure retail choice in the broadband market, and the increased deployment of fibre. In particular, they are proposing to incentivise Openreach to deploy full fibre broadband in ‘Area 3’ locations to ensure retail choice in this market. It appears they will do this even in the presence of other full fibre operators if they do not offer genuine retail choice. Since Area 3 covers the hardest to reach 30%, it can be assumed that this will overlap the Final 20% areas that are also a target for Outside In.
2.3.5 If Openreach is incentivised to deploy full fibre in Area 3 locations, it is unlikely that they will cover 100% of properties. It is probable that they will deploy some full fibre in the easier to reach areas – until the cost of deployment out-weighs the incentive. The result will be a subsidised infrastructure delivered through the Outside In programme, with fragmented partial over-build in an area that will only support one infrastructure provider. The result is likely to be commercially un-viable and not sustainable in the long-term.
2.3.6 If the Ofcom requirement for retail choice is to be maintained, then it is important that all bidders for the Outside In programme are able to offer retail choice that will meet the Ofcom requirement. Direct intervention may be required to enable this if the procurement is to be competitive.
2.3.7 Competitive procurement is an essential first step in ensuring value for money is achieved for the government intervention.
2.3.8 It is understood that the Outside In procurement will divide the Final 20% into a large number of relatively small ‘bundles’. This is widely supported and potentially makes the procurement accessible to a wider number of operators than the larger procurements (such as R100 in Scotland and Project Stratum in Northern Ireland). This is positive for ensuring a competitive procurement; it does present a number of challenges, however.
2.3.9 Availability of data is a vital aspect of ensuring competitive bids through procurement. In larger bids, infrastructure data (such as full GIS data on the Openreach PIA infrastructure) is available through the procurement. Bidders then have a significant period of time to design their network proposals that form the basis of their bids. This information must be made available to all bidders significantly in advance of the procurement of individual ‘bundles’. Effective data is essential to allow bidders to develop network designs of sufficient detail to allow them to manage risks effectively.
2.3.10 It is understood that a service provider bidding for a ‘bundle’ will be expected to offer gigabit-capable broadband to all properties in the ‘bundle’. This may not be feasible. As a result, it may make the definition of the boundaries of the ‘bundles’ excessively difficult and specific to existing infrastructure providers (Openreach). It may also mean that a small number of very hard-to-reach properties may make the overall bundle technically or commercially non-viable. Flexibility over the need to deliver to 100% of properties, and the need to deliver gigabit speeds to all may be needed to address this problem. Early visibility of any flexibility will be important to allow operators to plan possible approaches.
2.3.11 Although retail choice is an important factor in providing value for money for end users, in the longer term, competition at the infrastructure level is also important. It is expected that infrastructure competition will occur naturally for 70-80% of homes but the last 20-30% are only expected to be able to support one infrastructure provider.
2.3.12 Although the least commercially viable areas cannot support local infrastructure competition, that does not mean all competition is impossible. For example, retail competition could be provided through connection to the Openreach infrastructure. If the local access network was able to offer connections that could be ‘consumed’ by Openreach as a part of their end-to-end offer to their CP clients to deliver end user services over full fibre connections, then the end users would have retail choice, the CPs would be able to access the market for their services and Openreach would be able to deliver services to their CP clients. This achieves good retail competition, but not infrastructure competition – if the access network operators want (or are required) to offer retail choice, then they have no alternative but to work with BT and Openreach.
2.3.13 However, if an alternative wholesale platform was available, with a national backhaul infrastructure that allowed CPs to connect to the new access networks without relying wholly on BT and Openreach, then the new access network operators would have a choice of connection provider delivering the connection to the CPs. The choice of wholesale platform and backhaul infrastructure provides an element of infrastructure competition without requiring direct access infrastructure competition in the hard-to-reach areas served by the Outside In programme.
2.4.1 The take-up and use of digital connectivity show an ongoing growth in demand for digital content – and as a consequence ongoing need for increasing bandwidth. Although the increasing demand for greater bandwidth appears quite consistent, there is also significant variation in demand. This has a number of important consequences for the development of new digital infrastructures.
2.4.2 The Ofcom Connected Nations reports (2015 – 2019) provide data on the digital content consumption per household in the UK. The data shows an average annual growth of 34%. Empirical data shows that the standard deviation of data requirement by household is 1.2 times the average requirement, and the average requirement in the busy hour is approximately double the overall average requirement. This data allows us to develop a forecast of average and busy hour data requirement by household.
Figure 1. Forecast bandwidth requirement per user
2.4.3 Figure 1 above shows the forecast of bandwidth requirement over time. Lines show the average bandwidth requirement (to meet overall average data consumption per household) and the 95% confidence point for average bandwidth requirement in the busy hour.
2.4.4 By 2025, busy hour requirements for the more demanding households is expected to exceed 40Mbps – superfast will no-longer be sufficient. The 10Mbps bandwidth proposed for the Universal Service Obligation (USO) for broadband is already inadequate. However, Ultrafast speeds (100Mbps and faster) will more than meet the busy hour requirements with 95% confidence beyond 2028. By 2036, gigabit speeds may start to become inadequate for the most demanding users.
2.4.5 Although the ‘gigabit by 2025’ target has provided a clear focus and has strong appeal, deployment that meets the actual bandwidth requirements of users is probably far more important. Gigabit capability is not actually important at the moment, but in the expected life of an infrastructure deployment is inadequate in the longer-term.
2.4.6 Within 10 years of the 2025 delivery target, gigabit broadband services will already require upgrade. Most fibre deployments currently use Gigabit Passive Optical Network (GPON) technology. GPON infrastructure has a ready upgrade path to XGSPON (10 Gbps symmetrical) and further (essentially limitless) upgrades can be anticipated. Maximum focus on full fibre provides the most future-proof deployment.
2.4.7 Excessive focus on gigabit capability in the short term effectively excludes the majority of Fixed Wireless Access technologies (excludes all wireless technologies proven in the field). This may lead to an inappropriate technical specification and inefficient deployment. However, 100Mbps is readily achievable using proven FWA technologies and can be deployed efficiently as a part of a planned upgrade path to meet the ongoing increase in bandwidth requirement.
2.5.1 The COVID-19 pandemic, and the associated lockdown requirements have shown the critical importance of digital connectivity throughout the world. Individuals have relied on digital communications to maintain social interactions. Businesses have relied on digital connectivity and home working to continue to operate. Some have had to rely on digital communication to maintain any function and future operation; others have employed digital communications as a central element of their innovation to meet greatly increased demands.
2.5.2 Where every business continuity plan is based around home working, the economic resilience of areas depends on effective digital connectivity for all. It is no-longer sufficient to focus digital connectivity on the core urban areas that drive the conventional economy.
2.5.3 As the delivery of core services (such as health and social care) transform to digital delivery, those without adequate connectivity will be increasingly poorly served.
2.6.1 Alignment and cooperation between UK government stakeholders (DCMS, Ofcom, local authorities) appears poor. The DCMS development of the Outside In programme appears likely to be undermined by Ofcom interventions in Area 3. Even the definition of the Final 20% and Area 3 appear to have been undertaken independently – leading to confusion and poor coordination of remedies.
2.6.2 DCMS has produced effective best-practice for streetworks and other ‘barrier busting’ issues. Acceptance of these by local authorities has been inconsistent.
2.7.1 COVID-19 and the associated lockdown has shown the importance of digital connectivity – in particular the importance of home broadband connections for wider economic resilience (of the individuals, and the businesses they serve).
2.7.2 The COVID-19 pandemic is not yet over. It is possible that there will be a ‘second wave’. If this happens, it may not affect the whole country – it might be possible to isolate it to more localised areas. The use of digital communications for health monitoring may be an important element of reducing the impact on hospitals. It can be expected that high-definition video calling will be a part of any effective digital health monitoring solution. This is one of the most bandwidth-dependent applications currently in widespread use – it required 10Mbps bandwidth (upload as well as download bandwidth). This can be met using superfast connections and better. There are currently approximately 4% of homes across the UK without access to superfast broadband.
2.7.3 There is an urgent need to improve the availability of superfast broadband connectivity for the last 4% of homes. However, it is proposed that this should be considered as a wider plan for the efficient deployment of infrastructure to meet the current and ongoing demand for bandwidth.
KR.1 COVID-19 has shown the importance of adeqaebodadfr alla ucl spil,and a long-term plan to maintain network capability ahead of demand – including the need to exceed gigabit capability over time. The ‘gigabit by 2025’ target has been valuable to focus attention, but now needs to be replaced by something achievable, and that meets the immediate and long-term needs of society and the economy.
KR.2 Align Ofcom measures for Area 3 and DCMS interventions for the Final 20% to a single coordinated intervention approach and agreed intervention area.
KR.3 Publish the details of the Final 20% intervention area as quickly as possible to empower commercial delivery in other areas.
KR.4 Direct intervention to support the development of an alternative Wholesale Access platform and national backhaul infrastructure to support infrastructure competition for the Final 20%.
KR.5 Ensure the availability of data regarding existing physical infrastructure (including PIA data) is readily available in appropriate format as soon as possible to allow bidders to develop approaches for network design to support Outside In bids.
KR.6 Require all operators and all local authorities involved in the Outside In (or other DCMS funded broadband deployment) to abide by barrier busting measures and associated best practice (including future developments of best practice).
 Analysis of data for NGA broadband networks in Essex and East Lothian produced the same result.