BoJo’s 2025 fibre promise has no basis in reality

Being ambitious is all well and good, but most would hope the ambitious are living in the world of reality. Unfortunately, with Boris Johnson’s Fibre-to-the-Home objectives, he’s operating in dreamland.

Perhaps this is a situation which we should have come to expect. Theresa May has one foot out the door and the jostling to inherit 10 Downing Street is starting to ramp up. This weekend saw the first televised debate, with one obvious omission, and soon enough the big promises to woo the Conservative Party membership are going to be dominating the headlines.

Politicians tend to exaggerate when it comes to promises on the campaign trail, and Tory leadership hopeful Boris Johnson (BoJo) certainly has history; who could forget the £350 million we were going to save the NHS every day by leaving the European Union.

The latest promise from BoJo is his government would deliver full-fibre broadband to every single person in the UK by 2025. This target would wipe off eight years from the current strategy set up by the Government in the Future Telecoms Infrastructure Review (FTIR).

Just to emphasise this point. The current objective is seen as ambitious and would see the full-fibre rollout complete in just over 13.5 years, but BoJo is suggesting it can be done in less than half that time.

The feedback from our conversations with industry is simple; what planet does BoJo think he is on?

However, what is worth bearing in mind is that the ambitious always have been criticised. When someone comes out with a bold idea, sceptics will beat them back. It is easy to criticise BoJo with this claim, because it is almost impossible to imagine how it is going to be done, but on the other hand, it is almost impossible to criticise the ambitious because there is no substance, no detail and no plan. It’s not something which should be taken that seriously because there are no details in place to actually make it happen.

One of the questions you have to ask is when did BoJo become a telco guru? We’re struggling to think of any examples of when he has contributed in any meaningful manner to the connectivity debate. If BoJo has had these telco smarts all along, able to solve one of the biggest challenges the industry has faced in decades, he certainly was playing the long-game in keeping them to himself.

Openreach has of course been perfectly politically correct when asked for comment. “It’s hugely ambitious, but so are we,” said an Openreach spokesperson. “We agree that full fibre can be the platform for the UK’s future prosperity and no company is investing more, building faster or aiming higher than Openreach. We aim to reach four million homes and businesses by March 2021 and up to 15 million by mid 2020s if the conditions are right.

“We’re already in decent shape when it comes to ‘superfast’ broadband, which is more widely available here than in almost any other comparable nation on earth – and has led the UK to have the leading digital economy in the G20.

“But building full fibre technology to the whole of the UK isn’t quick or easy. It requires £30 billion and a physical build to more than 30m front doors, from suburban terraces to remote crofts. We’re determined to lead the way and there’s a lot that Government could be doing now to help us go further and faster.”

But let’s assume BoJo is the master of telco, as we don’t have to be as nice as those in the industry; we have a couple of questions. Firstly, where is the money coming from? Secondly, where are the scissors to cut through the red-tape maze? Thirdly, where are the new employees going to emerge from? And finally, how did he actually come to this figure without actually speaking to anyone in the industry?

Starting with the money, the big query from our contacts was where is the cash coming from? The telcos are working as fast as they are commercially capable of, but BoJo believes they can go faster should the right incentives be put in place. The industry suggests full-fibre infrastructure would cost in the region of £30 billion, and it won’t be stumping all of that cash up. That’s not how investment strategies work.

A sensible and scalable capital investment strategy is focused on gradual rollouts, with an emphasis on ROI as the deployment progresses. You need to reclaim the investment as you are continuing to spend otherwise you are making yourself vulnerable to seesaw of market trends through over-exposure.

If BoJo is suggesting massive government funding projects, fair enough, but considering the NHS is underfunded, schools are overcrowded and there aren’t enough coppers on the beat, we’re not too sure where he is going to find this cash to fix what is fundamentally a first-world problem.

Secondly, you also have to wonder whether BoJo has put any thought into the bureaucratic challenges which the industry is facing. This is what our industry insiders were so confused about; has there been any thought to the administrative and bureaucratic challenges which are some of the biggest hurdles to deployment?

The 2033 target is one which has been put in place with these challenges in mind. The Government is considering proposals which would address way leaves, access to new builds or business rates for fibre, but these are still question marks. Perhaps BoJo is going to come in and carve away all the red-tape which is holding deployments back, creating a light-touch regulatory environment.

2033 will only be achieved should the right regulatory conditions be cultivated. If BoJo is going to correct this challenge, he’ll have to take a very large hatchet to the rulebook. This point has also been echoed by the Internet Services Providers’ Association:

“Boris Johnson’s ambitious commitment to achieve full fibre coverage by 2025 is welcome, but needs to be matched with ambitious regulatory change, including reform of the Fibre Tax,” said Andrew Glover, ISPA Chair. “Broadband is a largely privately financed infrastructure and together with outdated planning laws, fibre business rates are holding our members back from accelerating their roll-out plans.”

Another consideration is on the people side of things. Openreach recruited 3,000 engineers last year and is planning to recruit another 3,000 this year. Virgin Media is continuing to recruit to fuel Project Lightning, but you have to wonder how many bodies these companies will need to meet the 2025 target.

Even if there was an aggressive recruitment drive, people with the right skills are not just lazing about on street corners. One person pointed out that it isn’t a case of simply putting a hard hat on Joe Bloggs and asking them to dig a hole; there is a lot of training which goes into the recruitment progress. Another wondered whether there would be enough potential recruits if BoJo achieves another one of his headline promises; Brexit. How much of a talent drain will there actually be?

The speed at which full-fibre networks are being deployed is already pretty quick, the industry is connecting 3-4 million homes a year to meet current objectives. To hit Bojo’s ambitions, this number would have to be north of 5 million a year. Virgin Media’s Project Lightning is adding 400,000-500,000 premises a year, while Openreach is adding more than a million. Add in the alt-nets and progress is promising. Going faster is going to be tricky in today’s world.

We’re not too sure who BoJo has been talking to when he came to the 2025 target, but one thing is pretty clear; he’s not on the same page logistically, bureaucratically or financially as the telcos.

FCC readies ‘Out-of-Office’ emails as budget looms

With President Donald Trump and House Democratic Leader Nancy Pelosi going toe-to-toe over funding for a controversial wall, the FCC has warned it will run out of money on Thursday afternoon.

The inability for the Republicans and Democrats to come to an agreement on federal funding has meant numerous agencies throughout the country are facing closure, the FCC being one of them. Considering FCC Chairman Ajit Pai has been doing his best to lighten the regulatory influence of the agency during his tenure, perhaps colleagues will be able to hear a joyous tap-dance echoing from his office.

“In the event of a continued partial lapse in federal government funding, the Federal Communications Commission will suspend most operations in the middle of the day on Thursday, January 3,” the FCC has said in a statement. “At that time, employees will have up to four hours to complete an orderly shutdown of operations.”

For those who work for the FCC, the political stance being made by the two leaders will mean very little as they sit quietly at home with no pay-cheque. However, work required for the protection of life and property will continue, as will work relating to spectrum auctions, which is funded by auction proceeds. The Office of the Inspector General will also remain open, though most of the FCC function will temporarily cease. More details are expected over the next couple of hours.

What remains to be seen is how long the office will be closed for. After it initially appeared Trump would sign the proposed budget, critics suggested he was going back on his word as there was little funding to create the physical border between the US and Mexico. The wave of criticism from usually friendly media titles forced the hand of the President, and it appears there will be little concession made by either side right now.

Such is the world of politics an agreement will probably be made in the near future. Both sides will suggest they gained the advantage, though (again), this will come as little comfort for those whose bank accounts are getting slimmer as we speak.

Virgin Media takes local council to court over ‘hefty’ access charges

Virgin Media has said it will be putting new clauses in the updated Electronic Communications Code (ECC) to the test as it takes Durham County Council to court over land access difficulties.

The disagreement between Virgin Media and Durham County Council surrounds the decision to expand the telco’s fibre network to 16,000 properties by the end of 2019. While there was support in the early stages of the project, the council is charging what Virgin Media describes as a ‘hefty’ per-metre levy, despite BT and other utility providers already having their pipes and cables installed in grass verges the Highways Department in Durham recommended as the build option to minimise disruption.

“We are disappointed to be taking this action against a Council with whom we initially had a good working relationship,” said Tom Mockridge, CEO of Virgin Media. “By demanding money for land access Durham County Council is now putting up a broadband blockade to thousands of homes and businesses across the county.

“This issue goes wider than the city of Durham. Haggling over land access when we build in a new area slows down broadband rollout and deters investment. It is also an impediment to Government and Ofcom’s ambition for increased fibre rollout and network competition to BT. It’s time rhetoric was put into action to truly break down the barriers to building broadband.”

The issue which is being corrected in the updated ECC is that of ransom rents, a plague to the telecoms industry. As a substantial number of fixed and mobile assets have to be built and maintained on privately owned land, complicated leasing documents are needed. As most of the landowners realise they are in the position of power, telcos are overcharged for access, both to build the asset in the first place, and each time maintenance needs to be carried out. It is an expensive aspect of the business for telcos.

Another worrying trend which was pointed out to us by EE a couple of weeks back is the renegotiation of terms. As most of the leases contain a list of assets on the rented ground, upgrades mean a renegotiation of the terms as introducing new equipment alters the agreement, which gives the landowner the opportunity to charge more as the telco is left with little or no choice. EE is trying to set precedent against this trend with its own lawsuit, but the ECC is supposed to be addressing this unreasonable balance of power.

The main issue is telcos are not currently viewed as a utility and therefore do not have the same rights to access. Due to the critical importance of utilities such as water, gas and electricity, engineers are able to access assets without consent from landowners and do not have to worry about being overcharged in leasing agreements. Telcos want the same access rights as the utilities, but do not want to be regulated as utilities, which is one of the causes of the whole issue. The telcos are not willing to make the necessarily regulatory concessions to ensure the government can protect their interests and offer them more freedoms for the rollout of future-proof infrastructure.

The root cause of this problem is one we are familiar with; rigid and inflexible telcos, stubbornly targeting a protectionist set-up with the government without giving anything in return. Landowners should not be able to hold telcos to ransom, but some concessions will have to be made to ensure progress towards the digital dream can be made.