Budget is good start, but don’t get too excited – National Infrastructure Commission

The National Infrastructure Commission has given the UK’s Autumn Budget the thumbs up, but will the shiny new roads take much needed funding away from the country’s quest towards the digital economy?

While it might be a boring topic, roads and railways received a lot of attention during the budget announcement. But this is one of the bigger concerns for the NIC, which is wondering whether the a lack of private investment in such schemes would detract from government investment in other areas, most notably, next generation technologies for communications and energy.

“Today’s Budget includes a number of welcome measures for infrastructure – but the real test will be next year’s Spending Review and, crucially, the National Infrastructure Strategy that the Chancellor has promised,” said Sir John Armitt Chairman of the National Infrastructure Commission.

“This strategy should bring together the roads funding from this Budget with longer-term funding for cities and projects like Northern Powerhouse Rail and Crossrail.  And it should include access to full fibre broadband and greater use of renewable sources for our energy.”

The budget, which was unveiled on Monday, featured plans to hold the internet giants accountable to pay more tax in the UK, as well as a £1.6 billion commitment to support the Industrial Strategy and R&D funding, including technologies from AI, future manufacturing, nuclear fusion and quantum computing. An additional £200 million from the National Productivity Investment Fund will also be pointed towards various schemes to encourage the rollout of fibre infrastructure throughout the UK, most notably in rural regions with primary schools to be the first to get special attention.

Looking specifically at the National Productivity Investment Fund, investments in fibre and 5G will increase to £715 million between 2019 and 2021, though whether this is enough to keep the UK on track in the global digital economy remains to be seen. The ambition set out in July in The Future Telecoms Infrastructure Review targets a nationwide full fibre network by 2033. Alongside the Budget, the government is publishing consultations to mandate gigabit‑capable connections to new build homes.

The consultation, which is being led by the Department of Digital, Culture, Media and Sport, will aim to amend the Electronic Communications Code (EEC) to place an obligation on landlords to facilitate the deployment of digital infrastructure when they receive a request from their tenants, while also enabling telcos to use magistrates courts to gain entry to properties where a landlord fails to respond to requests for improved or new digital infrastructure. The EEC is starting to look like a very large stick for the telcos to swing around and force people to do anything they want.

What is slightly concerning is a lack of attention for 5G. In the budget document on the HM Treasury website, 5G is actually only mentioned once.

What is worth noting is this budget might actually mean nothing in a couple of months. Hammond has given himself adequate breathing room with a no-deal Brexit scenario looking increasingly likely, stating it would be back to the drawing board should the worst-case scenario become a reality.

UK government eyes up Silicon Valley for tax raid

Chancellor of the Exchequer Phillip Hammond has confirmed a ‘digital tax’ in the autumn budget aimed at holding the internet players accountable to reasonable tax rates.

In recent years, the internet giants of the US have become known as much for creatively sidestepping the tax man as they have for innovative products and services, but the playing field is shifting. The European Commission is currently attempting to align the interests of all member states to impose its own tax regime, though Hammond isn’t waiting for the boresome Brussels bureaucrats.

“The UK has been leading attempts to deliver international corporate tax reform for the digital age,” said Hammond in the House of Commons while unveiling the budget. “A new global agreement is the best long-term solution. But progress is painfully slow. We cannot simply talk forever.

“So we will now introduce a UK Digital Services Tax. This will be a narrowly-targeted tax on the UK-generated revenues of specific digital platform business models. It will be carefully designed to ensure it is established tech giants – rather than our tech start-ups – that shoulder the burden of this new tax.”

This is the tricky aspect of the new tax; how do you hold the internet giants accountable within placing too much of a burden on the start-ups? These are companies which need assistance to thrive, and an important segment for the UK. Start-ups, most importantly technology start-ups, have been targeted by the UK government to stimulate the economy in a post-Brexit world, but with the threat of digital tax, will these companies want to choose the UK?

The tax will be targeted at revenues generated through search engines, social media platforms and online marketplaces. Long story short, 2% of total revenues generated in the UK will be claimed by the tax man, generated £400 million a year, in theory. The new tax regime will come into place in April 2020, though should the European Commission come up with its own approach, the whole scheme might be scrapped.

For years the internet giants have been shifting profits around and claiming suspect charges to reduce exposure to the tax man. According to a Tax Watch UK study looking at Apple, Google, Facebook, Cisco Systems and Microsoft, the tax liability in 2017 was estimated at £1.26 billion, though only £191 million was paid.

Politically the digital tax is a win for the Conservative government, though at a time where the UK needs to make as many friends as possible while going through an expensive divorce, it is an interesting approach. With a no-deal Brexit looking increasingly likely, the UK needs to attract new investment into the economy and build relationships with trade partners. Taking a combative approach to tax is hardly going to get the internet giants on side, and might well irritate the US government.

Tackling the creative accountants in Silicon Valley has been a government discussion for years, though whether the aggressive approach from the UK will stimulate any progress through the rest of the world remains to be seen.

NHS finally heads towards the digital society

Secretary of State for Health and Social Care Matt Hancock has unveiled plans to reinvigorate digital ambitions in the UK’s National Health Service (NHS).

While the concept of the NHS might be the envy of many countries around the world, from a digital and technology perspective, the service is a bit of a disaster. Several attempts have been made to bring the NHS into the 21st century, though any evidence of progress is limited with hand written and ineffective communications between trusts, still littering the service. With the ambition to create a framework of digital service for the UK, the NHS is certainly in need of a technology refresh.

“The tech revolution is coming to the NHS,” said Hancock. “These robust standards will ensure that every part of the NHS can use the best technology to improve patient safety, reduce delays and speed up appointments.

“A modern technical architecture for the health and care service has huge potential to deliver better services and to unlock our innovations. We want this approach to empower the country’s best innovators – inside and outside the NHS – and we want to hear from staff, experts and suppliers to ensure our standards will deliver the most advanced health and care service in the world.”

For those who are not from the UK, the NHS is the publicly funded national healthcare system for the UK, made up from 135 acute non-specialist trusts, 17 acute specialist trusts, 54 mental health trusts and 35 community providers. Although all of these bodies are managed centrally by the Department of Health, they are effectively individual public sector bodies, each with its own organizational structure, budgets, demands and objectives. On the technical side, all trusts use their own computer systems and standards, making patient data transfer incredibly difficult, even if it is allowed with stringent data privacy laws.

The spread of influence and decision making has created a bureaucratic and operational nightmare. Add skill shortages and the UK’s austerity measures into the mix and the NHS is facing one of the biggest crisis’ in its history. With Hancock in charge of the Health Department, it would not be a stretch to see technology playing a more significant role in solving these problems considering his recent transfer from the Department of Digital, Culture, Media and Sport.

The plan is to introduce minimum technical standards that digital services and IT systems in the NHS will have to meet. Having these open standards in place means systems will be able to talk to each other securely and ensure they are upgradable. Outside of these open standards, all trusts and clinical commissioning groups (CCGs) will have freedom to buy what they need. Opening up the procurement process will hopefully introduce competition and encourage innovation.

While both of these ideas would seem almost basic to other organizations, it is a novelty for the NHS. The plan will also introduce an internet-first and cloud-first mentality to decision making and planning. This will provide the resiliency and scalability the service so desperately needs to operate effectively. Systems and providers who are not able to meet these demands will be phased out.

“Greater standardisation of data, infrastructure, platforms and APIs will create a health and care system that is more joined-up, and as a result safer and more efficient,” said Sarah Wilkinson, CEO of NHS Digital.

“Connected systems ensure that clinicians have immediate access to all relevant and appropriate patient data from all care providers and settings, and ensure that data is communicated between systems with absolute fidelity, eliminating misinformation and misunderstandings. In addition, we will increasingly be able to provide citizens and patients with direct and immediate access to their medical records.”

What is worth noting is this is not policy right now. The Department of Health will have to consult all the relevant stakeholders and there is still a lot which can go wrong. The NHS has a culture of plodding on, while previous technology projects in the healthcare system have often failed. Both of these factors will provide some resistance for any alterations to the status quo.

The other massive question which remains is whether the project will receive adequate funding. The Institute for Fiscal Studies recently published a report stating the NHS’ budget would have to increase by 3.3% a year for the next fifteen years to maintain todays level of service. To secure modest improvements in NHS services, funding increases of 4% a year would be required over the medium term, and 5% in the short-term. In July, the Government announced NHS England’s main budget of just over £20bn by 2023/24, an increase of 3.4% a year on average.

There are numerous hurdles and potholes to negotiate, as well as countless scenarios which could knock the project off track, but this is a digital transformation process which the NHS desperately needs.

UK Gov makes bold steps to tackle long-ignored security problem

The Department for Digital, Culture, Media and Sport (DCMS) and the National Cyber Security Centre (NCSC) have jointly released new guidelines for the manufacture of smart devices, intended to build security into the foundations.

The issue of digital security is one which has been long-running and frequently brushed aside. While it is now generally accepted 100% secure is an impossible ambition, embedding security into the building blocks of every product or service is a way to mitigate as much risk as possible. This idea has also been aired numerous times, with little apparent action, though new Code of Practice aims to correct this oversight.

“From smartwatches to children’s toys, internet-connected devices have positively impacted our lives but it is crucial they have the best possible security to keep us safe from invasions of privacy or cyber-attacks,” said Minister for Digital, Margot James. “The UK is taking the lead globally on product safety and shifting the burden away from consumers having to secure their devices.”

“With the amount of connected devices we all use expanding, this world-leading Code of Practice couldn’t come at a more important time,” said Ian Levy, the NCSC’s Technical Director. “The NCSC is committed to empowering consumers to make informed decisions about security whether they’re buying a smartwatch, kettle or doll. We want retailers to only stock internet-connected devices that meet these principles, so that UK consumers can trust that the technology they bring into their homes will be properly supported throughout its lifetime.”

As it stands, the digital world is not secure. Innovation is progressing at an exciting speed, though advancements in security or even investments in security departments and products, are not keeping pace. The world is currently sleep-walking into a digital environment tailor made for hackers and other nefarious actors to thrive in. These individuals might be in the vast minority, but that does not make the threat any less real.

The new guidelines are as follows:

  1. No default passwords
  2. Implement a vulnerability disclosure policy
  3. Keep software updated
  4. Securely store credentials and security-sensitive data
  5. Communicate securely
  6. Minimise exposed attack surfaces
  7. Ensure software integrity
  8. Ensure that personal data is protected
  9. Make systems resilient to outages
  10. Monitor system telemetry data
  11. Make it easy for users to delete personal data
  12. Make installation and maintenance of devices easy
  13. Validate input data

Should the UK Government and the NCSC be able to nudge manufacturers into maintaining these principles, protections will certainly increase. This is not to say everything will be rosy, but by ensuring security is more than an afterthought in the design and manufacturing process, the right foundations are set.

“This government initiative is exactly what many in the industry have been craving for years,” said John Smith of CA Veracode. “Manufacturers have not really felt any market pressure to improve the security of these devices because consumers still have a lack of understanding of the security implications of IoT devices. Providing concrete guidance to manufacturers while also raising public awareness of these issues can only help address the gap that currently exists. It’s not just about the hardware anymore, it’s about the software behind it, and it’s really encouraging to see that the UK government wake up to the potential vulnerabilities in consumer IoT devices.”

These ideas are not new, more it is promising to see proactive action from the Government. Security experts have long discussed the merit of building security into the foundations of products, for example, Rik Ferguson of Trend Micro has previously suggested an official badge or certification for products which have been designed with the right security protocols and concepts in mind, similar to batteries. People don’t need to know the process of achieving the validation, but a properly audited process can provide peace of mind for the consumer.

However, it is critical the process is embraced by the majority and soon becomes an industry standard. Energy company Centrica has become one of the first to embrace the guidelines with its Hive smart energy devices, while HPE has also committed. This is a good start, and potentially sets the ball rolling for a process which is more official. Right now, the Code of Practice is voluntary.

Security has long been an ignored issue in the industry, mainly because it is incredibly difficult to deal with. If companies were honest with consumers about the threats of the digital economy, many would be turned off from taking more of their lives online. At least there is some positive action to addressing the significant problem of cybersecurity.

Amazon, Supermicro and Apple call BS on Chinese spying sting – someone is lying

Amazon, Supermicro and Apple have released statements denying they have ever found any malicious microchips on their hardware calling into questions the validity of Chinese espionage claims.

Yesterday Bloomberg pulled back the curtain on an apparent three year-old US government into one of the most intrusive and intricate espionage campaigns, fuelled by the Chinese government. Should the claims be proven true, it would certainly add weight to the political paranoia which has been whipping the anti-China rhetoric into a frenzy, though the major players have denied all knowledge of the malicious microchips and the resulting investigation.

“As we shared with Bloomberg BusinessWeek multiple times over the last couple months, this is untrue,” said Steve Schmidt, Chief Information Security Officer at Amazon. “At no time, past or present, have we ever found any issues relating to modified hardware or malicious chips in SuperMicro motherboards in any Elemental or Amazon systems. Nor have we engaged in an investigation with the government.”

“Supermicro has never found any malicious chips, nor been informed by any customer that such chips have been found,” Supermicro said in a statement. “The manufacture of motherboards in China is not unique to Supermicro and is a standard industry practice. Nearly all systems providers use the same contract manufacturers.”

“Over the course of the past year, Bloomberg has contacted us multiple times with claims, sometimes vague and sometimes elaborate, of an alleged security incident at Apple,” an Apple statement reads. “Each time, we have conducted rigorous internal investigations based on their inquiries and each time we have found absolutely no evidence to support any of them. We have repeatedly and consistently offered factual responses, on the record, refuting virtually every aspect of Bloomberg’s story relating to Apple.”

While the entire saga is now a bit hazy, one thing is clear, someone is lying and misleading the general public.

Would China compromise ‘Workshop of the World’ position?

It is not difficult to believe the Chinese government would conduct such campaigns. It is generally accepted the Chinese government monitors the activities and communications of its own citizens, therefore it is not a huge stretch of the imagination to believe it would do so for foreign countries. But, would the Chinese government put its valuable position as the ‘Workshop of the World’?

With roughly 75% of smartphones and 90% of PCs manufactured in the country, any accusations of espionage would certainly force companies to reassess their supply chain. What company would buy hardware if they knew the potential for data breaches? It would be commercial suicide. China surely knows this, but it depends on what it places more importance on; securing intelligence from foreign governments and multinational corporations, or maintaining stability for a very lucrative industry for the country.

This is not to say they wouldn’t, but it would have to accept it would be sacrificing an important and profitable role in the global supply chain, one which it has worked hard to dominate.

Amazon, Supermicro and Apple clearly have a lot to lose

Another denial here is nothing which should come as a surprise. Should there have been a confirmation, the trio would haemorrhage customers.

Amazon AWS’ government business is a big earner, but how many would trust the services if there was a threat of espionage. The same could be said of corporate clients who are incredibly protective of trade secrets. Supermicro manufactures motherboards for more than 900 customers around the world, clearly this would be incredibly damaging to its reputation. For Apple, and Amazon as well, the PR damage for the consumer business could be a disaster. Consumers would be very wary, which combined with the high-prices Apple tends to charge, could possibly turn the public to other brands.

Each company has a lot to lose by admitting it has been compromised. There was of course going to be a denial, especially considering this investigation has not been confirmed by the government. If it does turn out to be true, the trio can simply state they were under non-disclosure agreements and a denial was necessary for national security, even if it was a lie.

A convenient revelation for the US government

Just as President Trump is going on the offensive against the Chinese government with tariffs and company bans, the story emerges. To say it is convenient timing is somewhat of an understatement.

Just last month, Trump upped the ante on the Chinese trade war by introducing tariffs on another $200 billion of imports. This adds to the initial $50 billion which was announced earlier in the year. With the price of imports increasing, and the option of domestic manufacture more expensive, the price of certain consumer goods will soon begin to rise. Trump will soon need to justify to US citizens why it is important to swallow these price increases, and an espionage scandal would certainly fit the bill.

Another interesting aspect is on the 5G side of things. With Huawei banned from any meaningful deployment or contracts, the risk is reduced competition which could potential lead to increased prices and slower deployment. Ghost stories about the naughty Chinese will only get the government so far, Trump will soon need a concrete reason for banning Huawei and ZTE from the fray. The malicious microchips provide justification here as well.

Not everyone can be right

Right now the validity of the claims is hazy. There are of course strong arguments for all, some suggesting they are telling the truth and some as evidence of lies, but right now, who knows.

With the intelligence community and the White House remaining quiet, rumours will continue to swirl. Until this confirmation or denial for the investigation is unveiled, the conspiracy theorists will be typing away. Of course, a confirmation or denial will not stop the conspiracy theorists, but it will at least provide some clarity for the rest of us.

FCC lays out the FAST track to 5G

The FCC has unveiled the grand plan for 5G, outlining the strategy it will put in place to place the US at the top of the technology league table.

Facilitate America’s Superiority in 5G Technology (the 5G FAST plan) strategy takes into account three areas; spectrum, infrastructure policy and modernising outdated regulations. The objective is a simple one to envisage, but more sticky to complete; how can the US ensure it does not lose its leadership position in the technology world to China?

As you can see from the video below, FCC Chairman Ajit Pai is clearly excited about ‘claiming the 5G future for America’.

Starting on spectrum, the FCC highlighted it is critical to ensure there is as much available to the telcos as possible. In the high bands, the 28 GHz and 24 GHz bands will be available in auction later this year, while the upper 37 GHz, 39 GHz, and 47 GHz bands will hit the lots in 2019. These auctions will release almost five gigahertz of 5G spectrum into the market, while the FCC is attempting to free up another 2.75 gigahertz in the 26 and 42 GHz bands. In the mid-bands, the FCC is working to find more available assets in the 2.5 GHz, 3.5 GHz, and 3.7-4.2 GHz bands. Changes are also on the horizon for the lower-end bands (600 MHz, 800 MHz, and 900 MHz), while unlicensed spectrum is getting some attention for next generation wifi cases.

Looking at the infrastructure policy side of things, the FCC has adopted new procedures to review applications on a federal level, while also forcing local authorities to accept similar rules. Removing red-tape and speeding up the lethargic public sector is not something we will attempt to criticise, though there has been resistance to the new rules at state and county levels, with some suggesting there is too much of a burden on the public offices. It would not surprise anyone to see some form of legal challenge to these rules from a sow-moving coalition of local authorities.

Finally, modernising regulations across the communications industry is likely to be a contentious claim, especially considering some believe the eradication of net neutrality to be a backwards step. The pompously named ‘Restoring Internet Freedom’ act is only one factor here though. Other areas which have received attention include ‘One-Touch Make-Ready’, rules governing the attachment of new network equipment to utility poles, and Business Data Services, an initiative to remove certain rate regulation. The theory here is the less barriers to launch new services, the more incentive to invest in future-proofed fire networks.

While some will certainly object to some of the moves made by the FCC, you can’t argue with the US approach in combatting the leadership threat from China. Various governments around the world have boasted about the desire and critical need to take a leadership role in the digital economy of tomorrow, though few actions support the rhetoric (have a look at most of what the UK government does). The US is not going to let its leadership position in the technology world be taken away easily.

State versus federal battle looms as California signs net neutrality into law

California Governor Jerry Brown has been busy; 31 state bills vetoed and 34 signed into law, including the controversial net neutrality rulings, kicking off another state versus federal battle.

State Bill 822, claimed to be the strongest net neutrality laws in the country, has officially been signed into law in the State of California, but it only took the US Department of Justice a few minutes to throw a wobbly. Before the army of busybodies and privacy advocates could even get their own press releases out, the Justice Department filed a lawsuit alleging that Senate Bill 822 unlawfully imposes burdens on the Federal Government’s deregulatory approach to the Internet.

“Under the Constitution, states do not regulate interstate commerce – the federal government does,” said Attorney General Jeff Sessions in the filing. “Once again the California legislature has enacted an extreme and illegal state law attempting to frustrate federal policy. The Justice Department should not have to spend valuable time and resources to file this suit today, but we have a duty to defend the prerogatives of the federal government and protect our Constitutional order.  We will do so with vigour. We are confident that we will prevail in this case – because the facts are on our side.”

Democrat FCC Commissioner Jessica Rosenworcel is clearly excited despite the legal complications:

After being passed back in February 2015, the appointment of FCC Chairman Ajit Pai saw a Republican led assault, with the telcos playing a supporting roles in the wings, on the rules. It didn’t take long for Pai to dismantle net neutrality, the vote to repeal the rules was won on 14 December 2017, though the backlash was almost immediate. Washington State was the first to pass local net neutrality rules, though with 23 Attorney Generals throwing their weight behind the cause it was only going to be a matter of time before other got involved. California is a different beast however, a worthy opponent of the US government.

With a population of roughly 39 million and a gross state product (GSP) of roughly $2.6 trillion, it is the largest in the US in terms of population and economic output. Globally, the economy is only smaller than the GDP of the US, UK, China, Germany and Japan. It is also home to Silicon Valley and the lobby power of the likes of Facebook, Google and Twitter.

While we do have sympathy with California and the internet giants, we do not feel net neutrality is the right way to go. Pai’s approach, reinstating the wild-west internet with the telcos as the tyrants of terror, is equally wrong. Both approaches are too extreme, the right answer lies in the middle, with the telcos afforded the opportunity to make money but still held accountable ensuring the consumer and businesses are not held to ransom. Taking the sensible, middle-ground is the logical approach, but set against the backdrop of such a combative political environment, it will be some time before fairness sets in.

But why is this such an important battle?

In its law suit, the Department of Justice is completely correct in stating California has overstepped its jurisdiction. No state should have the right to impose its own rules on another and the internet by definition is an interstate (international would be more accurate) playground. For these rules to be accepted on a legal basis in the US, California would have to ensure it was only applying the rules to traffic which originated, remained and terminated in California. Not only would this be pretty much impossible, but it would likely only account for a very small percentage of the total.

The stickiness is the clauses in the Communications Act, the piece of legislation which acts as the foundation of all communications orientated rules and precedents in the US. One clause dictates a state is entitled to draft its own rules, assuming it does not contradict that of the federal government. This is the very scenario which California has crafted. If SB 822 is allowed to stand it undermines the whole Communications Act; who is to say other states, businesses or advocacy groups could not use this example as a means to ignore other clauses, aspects of the Communications Act or precedent which has been set. In legalising the contradiction, the risk is to undermine the very basis of the communications industry across the country.

With California retaliating against the FCC’s decision to reverse net neutrality, the consequences are much more significant than they appear on the surface. This is now much more than a battle of technology regulations.

Super-complaint targets claimed telco customer exploitation

The UK Citizens Advice Bureau (CAB) has launched a super-complaint with the Competition and Markets Authority (CMA) asking the regulator to outline plans on how it will protect the consumer from loyalty penalties.

The super-complaint does not target the telcos specifically, though the industry has been given its fair share of attention. Research released by the CAB last week suggests the loyalty is being penalised across five ‘essential’ markets (mobile, broadband, home insurance, mortgages and savings), with service providers over-charging customers to bring in an extra £4.1 billion a year.

“It beggars belief that companies in regulated markets can get away with routinely punishing their customers simply for being loyal,” said Citizens Advice CEO Gillian Guy. “As a result of this super-complaint, the CMA should come up with concrete measures to end this systematic scam.

“Regulators and Government have recognised the loyalty penalty as a problem for a long time – yet the lack of any meaningful progress makes this super-complaint inevitable. The Government’s price cap in the energy market will protect some loyal customers. However, there’s still a long way to go in other sectors. The loyalty penalty is clearly unfair – 89% of people think it is wrong. The CMA needs to act now to stop people being exploited.”

While the claim from the CAB is a damning one, it is supported by additional research. Research commissioned by Broadband Genie has found many over 55s could be paying too much for their broadband service, but lack the knowledge or confidence to choose a new package. 51% of respondents said they had been with the same provider for more than five years, 41% had never changed supplier, though price rises would have certainly been applied during this period. The Broadband Genie research reinforces the claim consumers are being penalised for loyalty.

A super-complaint is a complaint made by a government-approved watchdog organisation on behalf of consumers, which is fast-tracked to a higher authority such as the CMA. Since being introduced as part of the Enterprise Act 2002, the CAB has exercised the right four times, including the complaint against payment protection insurance (PPI) in 2005 which helped to generate at least £32.2 billion in refunds and compensation for customers.

This complaint not only follows up research from the CMA, which claims four million people in the UK are still paying back phone subsidies after the device has been paid off, but also an Ofcom consultation which is investigating the pricing strategies of the telcos for the very same issue. As you would imagine, the telco industry is not particularly pleased with the busybody consumer protections group escalating the issue to the lofty offices of the CMA.

“With a consultation ongoing, we feel that Citizen Advice is jumping the gun in relation to the broadband market and we are concerned that the narrative of a ‘loyalty penalty’ conflates customer loyalty with ill-informed or unengaged customers,” the Internet Services Providers’ Association (ISPA) responded. “Loyalty to a provider does not necessarily mean that a customer is not content with their service, especially as in the broadband sector there are a range of non-price issues that the customer may value, including performance, service quality, and reliability.”

This is hardly a surprising statement from ISPA, as while the telco industry will not want to found out for ripping off consumers, it will certainly not want to give up the ‘free money’ generated through the lazy behaviour of consumers. Unfortunately this is not only an issue for the telcos as the complaint could also impact brand credibility and trust as well as bank accounts. Time and time again the telcos have been shown to employ dated business practises, not presenting themselves as customer centric organizations. Telcos are generally pretty bad at managing their brand or presenting themselves as forward-looking, consumer orientated businesses, and this noise surrounding the super-complaint will not help.

Aside from the money and the brand credibility, long-term consequences of the super-complaint could also be quite damaging. According to Stuart Murray, telecoms specialist and a partner at UK law firm TLT, government intervention on pricing could have a knock-on effect for investment.

“The CAB’s super-complaint goes to the heart of how a market-led economy works and any interventions that have the effect of regulating prices in competitive markets like telecoms may result in significant and unintended consequences,” said Murray. “If the CMA took steps to regulate pricing in the telecoms industry, this could have a negative impact on investment, reduce innovation and give consumers less choice, as well as dis-incentivising consumer engagement as people come to rely more on regulatory intervention.

“In a market-led economy, people who actively engage in markets benefit from discounts paid for by higher charges paid by those who are less engaged. The government and private sector have launched several campaigns in recent years to raise awareness of the benefits of engaging in these markets and encouraging consumers to exercise their rights to switch providers if another company is offering a better deal. This is a positive step – as long as measures are also taken to protect the truly vulnerable, who find it difficult or are simply unable to engage.”

This is certainly an area telcos should be keeping a keen eye on, as the long-arm of the government has been searching for ways to gain more authority in the industry. Should the super-complaint lead the CMA towards more stringent pricing regulations it will inhibit new ideas and innovation at a time when the telcos need it the most. Unfortunately, this does seem to be another step made down the path of utilitisation.

FCC moves forward with small cell plans despite backlash

The FCC has officially given new small cell deployment rules the thumbs up, despite protest from municipal leagues and local governments.

Earlier this month the FCC outlined plans to remove barriers for small cell deployment. The new rules focused on reducing fees the authority or government can charge telcos applying for permission to deploy the small cells, and secondly, reducing the ‘shot clocks’ for small wireless facilities, being the time in which the organization has to either approve or deny the application.

Following the proposals from the FCC, a number of local authorities and governments protested the rules, declaring too much of a burden was being placed on the public service. While it is understandable for employees to kick up a fuss over increased workloads, these are the same organizations which will complain over poor connectivity and the telcos ignoring smaller communities.

“New physical infrastructure is vital for success here,” said FCC Chairman Ajit Pai. “That’s because 5G networks will depend less on a few large towers and more on numerous small cell deployments – deployments that for the most part don’t exist today.

“But installing small cells isn’t easy, too often because of regulations. There are layers of (sometimes unnecessary and unreasonable) rules that can prevent widespread deployment. At the federal level, we acted earlier this year to modernize our regulations and make our own review process for wireless infrastructure 5G fast. And many states and localities have similarly taken positive steps to reform their own laws and increase the likelihood that their citizens will be able to benefit from 5G networks. But as this Order makes clear, there are outliers that are unreasonably standing in the way of wireless infrastructure deployment.”

Pai is condemning the attitudes of some of the local governments, and has even gone as far as to suggest these authorities were actively seeking to maximise revenues from the telcos. With the telcos being held accountable to deployment timetables and connectivity commitments, in some cases they would be forced to pay what some would call unreasonable fees. This is an conflict which we have also seen in the UK, though the new Electronic Communications Code is supposed to remove these hurdles as well.

Of course, what is worth noting is the majority of local authorities are working effectively with the telcos and the federal government to remove administrative hurdles and smooth the road to deployment. These new rules, which limit the power and influence of the local governments, are only directed at the troublemakers who demonstrate short-sighted ambitions in laying out a troublesome path for the telcos.

Indian government greenlights plan to increase broadband penetration

While Reliance Jio has been ripping up the rulebook, causing chaos in the Indian mobile market, some might be surprised to hear broadband penetration is still less than 10%.

Accessibility has long been an issue in India, from a mobile perspective Jio seems to have addressed this issue, though broadband remains an challenge. According to the latest subscription figures from the Telecom Regulatory Authority of India (TRAI), there are currently 22.2 million broadband subscriptions in the country, compared to roughly 250 million households. This is one of the discrepancies being addressed by the National Digital Communications Policy – 2018.

According to the Indian Express, the government has officially given the green light for the policy, which aims to attract $100 billion investment and create an additional four million jobs in the digital communications sector. The ambitions and targets are certainly bold, though momentum is certainly with India.

In terms of the top-line objectives, there are six; provisioning broadband for all; creating the four million jobs; increasing the percentage digital communications contributes to GDP from 6% to 8%; taking India into the top 50 places in the ICT Development Index of ITU; ensuring digital sovereignty; enhancing India’s global contribution to the digital economy.

Looking specifically at the broadband side of things, by 2022 the Indian government hopes to enable fixed line broadband access to 50% of households across the country, 100 Mbps broadband on demand to all key development institutions, provide 10 Gbps connectivity to all Gram Panchayats of India. These ambitions will be realised through creating a ‘fibre first’ initiative, promoting collaboration models involving state, local bodies and private sector, as well as incentivising and promoting fibre connectivity for all new developmental construction.

The telcos will surely be rubbing their hands together in anticipation of the opportunity. Fixed broadband infrastructure is an expensive game, though love and care from the government, as well as subsidies and potential tax benefits, will certainly offer opportunity to deploy infrastructure, new customers and revenues. Over the next couple of months, the government will aim to create a National Digital Grid, through the establishment of the National Fibre Authority, building Common Service Ducts and utility corridors, facilitating development of Open Access Next Generation Networks, as well as standardising costs and timelines.

Broadband offers a significant opportunity for the telcos who have seen profit margins decimated by the entry of Reliance Jio. With such low broadband penetration, the land grab for customers will be a vicious one, though with higher ARPU the rewards are quite clear.

From a global perspective, increased broadband penetration will certainly offer India a greater opportunity to play a more notable role in the global marketplace. This is looking at the global question outwardly; there will be a number of international businesses keeping an eye on developments here. Should broadband accessibility increase, companies like Netflix will almost certainly be lining up new products and tariffs. This in turn will stimulate the Indian creative industry, as a cornerstone of the Netflix strategy is to create local content.

The mobile revolution kicked off by Jio’s disruptive pricing proved to be a catalyst for India in the international digital economy, though increasing broadband accessibility and penetration could have the same impact. India has been an interesting market over the last 12-18 months, and with broadband now being addressed, it has recaptured our attention.