By Mark Jackson, ISPreview UK | July 14th, 2014
The Federation of Small Businesses (FSB) has today called on the Government of the United Kingdom to improve their current broadband coverage ambitions by raising the Universal Service Commitment (USC) from 2Mbps (Megabits per second) of Internet download speed to 10Mbps by 2017, which would then rise again to 1000Mbps by 2030.
At present the Government is investing around £1.2bn in order to make download speeds of at least 2Mbps available to 100% of the United Kingdom by 2017, while 95% of people in each local authority area will also gain access to so-called “super-fast broadband” speeds of “greater than 24Mbps” by the same date (NOTE: the EU’s related overall Digital Agenda target is 30Mbps for all by 2020).
Meanwhile the FSB’s report notes how 94% of SME owners believe that a reliable Internet connection is critical to the success of their business, although only 15% of those claimed to be “very satisfied” with their existing broadband service and apparently 45,000 smaller firms are still stuck on “dial-up” (i.e. up to 56Kbps connections). The FSB describes this situation as “unacceptable” and calls for a more “sufficiently ambitious” target (as above).
As well as “ambitions” new targets, the FSB also wants the Government to reform the broadband market and priorities the delivery of fibre optic broadband lines to new and existing business parks.
John Allan, FSB’s National Chairman, said:
“The fact that we have around 45,000 businesses still on dial up is unacceptable and many more throughout the country, even in London, are receiving poor service. Evidence from our members shows this clearly is a problem affecting all corners of the UK, rural areas and cities alike. While progress has been made with the residential market, businesses have not enjoyed the same benefits, which is holding back their growth. We therefore want to see the UK Government show ambition with its broadband targets and put business needs at their centre. Leaving five per cent of the population with a 2Mbps connection in 2017 is not good enough.
As this report shows, too many of our small firms are held back by the current state of the broadband market in the UK. We want Government to oversee the creation of world-beating digital infrastructure that will enable businesses to grow, innovate and compete in international markets. This means not only raising download speeds but also upload speeds that are so important and where provision is especially inadequate. Otherwise firms’ growth ambitions will be blunted, while Government efforts to get every firm to go ‘digital by default’ when filing its taxes online will be impossible to achieve.”
However the Department for Culture, Media and Sport (DCMS) claims that the FSB’s report fails to “reflect the real picture“.
“In rural areas, more than 600,000 businesses and homes across the nation are already reaping the benefits of superfast access, and we’re reaching 30,000 more every single week. In our cities, more than 1000 SME’s (small and medium-sized businesses) have already made use of our vouchers to boost their connectivity and free public wi-fi is being rolled out in city centres and on public transport across the UK.”
Over the past few years the FSB has frequently put out similar reports, with one published in 2012 recommending that the Government aim to achieve 98% coverage of 20Mbps broadband by 2015 (here). So at least the Government aren’t the only ones with a tendency to shift their targets and expectations. It’s easy to think up a number and plonk it onto a piece of paper, albeit much more difficult to show how that could actually be achieved in a practical and economic sense.
On the other hand setting the minimum fixed-line USC speed at 10Mbps seems like a reasonable idea and even Ofcom has recognised that “targets such as the USC need to evolve over time if they are to remain effective” (here). According to the regulators Director of Group Strategy and Economics, Steve Unger, the USC could be set at 8-10Mbps and possibly more by 2020.
But all of this debate seems to be somewhat moot since Europe’s Digital Agenda expects everybody to be within reach of 30Mbps+ by 2020. Meanwhile the Government has tended to ignore their own 2Mbps USC target, delaying it first from 2012 to 2015 (Labour’s original and possibly unachievable goal) and then from 2015 to 2017. So perhaps we should just forget the original USC and put all the effort into achieving 30Mbps for all by 2020 instead.
Unfortunately the Government’s current approach misses an opportunity to highlight the importance of several other and often overlooked, yet no less crucial, aspects of connectivity for businesses (as well as for many home users). In particular we’re thinking of latency performance and upload speeds, with the latter being particularly important for modern firms that need to move large files around. The FSB does cover these but its report could have gone further.
Sadly both have been historically neglected and even today many of the biggest ISPs only seem to promote their download performance, especially in the consumer market. Setting good targets here should not be ignored and would help to protect against the threat of Satellite being used as a quick-fix to say “job done” at a later date, despite its problems (meagre usage allowances, throttled speeds, high cost vs fixed line etc.).
Meanwhile the Government are currently working on a new forward-thinking infrastructure strategy, which is due to surface by the end of 2014 and should plan the way ahead for the next 10-15 years (here).
FSB’s Report – The 4th Utility: Delivering Universal Broadband
The boss of CityFibre, which builds fibre optic broadband networks in several UK cities, has offered his thoughts on today’s news.
Greg Mesch, CEO of CityFibre, said:
“All the evidence shows that high-speed digital connectivity is essential to the success of small businesses. Around the country businesses are struggling to grow and compete, suffocated by a lack of bandwidth. Even those companies based in newly built business parks can often find themselves only able to access broadband speeds that would have residential customers on the phone to technical support.
Despite our reliance on the Internet economy, more than twice the average of the G20 Group [Boston Consulting Group 2012 study], we have amongst the lowest levels of pure fibre infrastructure. Without access to pure fibre networks, fit for the 21st century, the UK’s small businesses will be restricted from accessing a new generation of online and cloud services that offer the functionality and flexibility to help them grow.
The technology and expertise is available today that allows for a quick, hassle free transformation to Gigabit Internet speeds. Its essential that this knowledge is utilised in cities and town across the country to ensure the UK remains on a par with other economically advanced nations.”