SBA

The Future of Broadband

Is it just me who gets frustrated with Broadband? Rhetorical question, of course not. I know businesses on the island where the staff go home to upload their multimedia work for clients because the broadband connection at work is just rubbish, but they’re not big or rich enough to pay for leased lines / dedicated fibre. In many cases 4G is better than broadband if you want to upload or download a large amount of data.

That’s not a dig at Manx Telecom or any of our other telecommunications providers, the reality is that our current broadband is miraculous; with a perfect bit of copper wire we can shift up to eighty megabits per second down an old technology that was designed and installed many decades ago for the purpose of speech. Speech technically equates to approximately 64 kilobits per second, so your VDSL+ broadband, if you’ve gone for the posh option, is equivalent to cramming approximately 1,300 simultaneous phone calls down a phone line that was designed for one - how cool is that?

Unfortunately perfection is rare; phone lines are often old and corroded, and reach our homes and offices via long circuitous routes, both of which degrade the signal quality and reduce achievable broadband speed far below the technical promise. Nevertheless the Isle of Man broadband ranks 5th in the world in terms of population coverage (95%) and in achieving a speed of 4Mbps+, according to Akamai’s quarterly survey, so we are not doing badly, we have higher and better national coverage than almost everywhere else. However the telephone system was simply never designed for high-speed data, and as I’m one of the team that designed the UK’s original digital telephony system in the 80’s I know this better than most folk - as I recall we originally designed the system to cram 16 simultaneous calls down each of the trunk lines inter-connecting telephone exchanges.

Given our digital aspirations, broadband speed is a problem of immense importance to the island - and not just to us, it is also a major problem for the UK, for the same reasons. Other countries are solving the problem using fibre-optic cabling which can carry hugely more data - a single fibre can carry data at multi-terabit throughput (a terabit is a million times a megabit). Peter Cochrane, ex Chief Technology Officer of British Telecom, recently wrote “Today, while other countries are beginning to realise the great benefits to society, commerce and industry from having invested in fibre, the UK is being left behind, unable to compete with countries where a fast connection is ubiquitous thanks to fibre-to-the-premises (FTTP)”.

Dr. Cochrane cites the example of New Zealand, where recent investment has already achieved super-high speed fibre connection to 75% of the population, helping to make the country a magnet for digital entrepreneurs. And therein lies the problem - if we want a digital economy we need digital businesses and the entrepreneurs who create them, and they ain’t going to be impressed by our ageing copper, even if we are doing rather better than our neighbour to the East.

Dr. Cochrane also reminds us that “fibre-optic networks are more energy-efficient and easier to run. They require 80-90% less buildings, and are significantly more reliable and resilient, requiring less repairs and maintenance and use 80-90% less energy than their copper counterparts. More importantly, fibre networks are future-proofed for decades to come, providing infinite bandwidth by today’s measures”.

Network technology firm Cisco, in its latest Visual Networking Index report, predicts that Internet traffic will treble by 2020 - partly due to more people coming online, but more thanks to the Internet of Things and increased video consumption. When you consider that 4K High Definition TV uses four times the data of standard “Full” HD, and the TV manufacturers already have 8K Ultra-High Definition TV ready to go - requiring sixteen times the data of Full HD, it’s easy to see how Internet TV alone is going to create a huge inflation in data demand that our current VDSL+ broadband will simply not satisfy. 8K UHD TV requires more than the maximum bandwidth that VDSL+ can provide. I will not be surprised if Cisco’s estimate proves to be on the low side.

The answer therefore, both to encourage the digital economy and to feed our 8K Ultra-High Definition TVs of the future, is simple - we need to convert the Isle of Man to fibre-optic communications, Fibre To The Premises (FTTP). It should be easy, I guess there are around 40,000 homes and workplaces on the island, not a huge number, so I went to talk to Gary Lamb, Chief Executive of Manx Telecom, about the challenge of getting it done.

Manx Telecom are keen, surprisingly so given their recent investments in VDSL and VDSL+, but talking to Gary it is clear that they get the rationale for fibre. Lower energy and maintenance costs, future-proofing, the opportunity to bring new digital services to the island, and the strategic economic benefit for our national digital aspirations - I was preaching to the converted, Manx Telecom see the need for fibre and Gigabit broadband and would like to satisfy it. Indeed Gary estimates that MT could connect us all to FTTP in two to three years.

So what’s the barrier? As always it comes down to money. Manx Telecom estimate that, based on the Jersey experience where the government-owned Jersey Telecom is being subsidised to help it roll out FTTP to all of Jersey, it may cost around sixty million quid to convert the Isle of Man to fibre, which definitely falls into the strategic investment spending bucket. According to Gary investing the money itself is not the major problem - Manx Telecom are prepared to make the investment although it would be challenging and require some long term financing. The telephone exchanges are already prepared and MT have rolled out a small amount of trial fibre, the problem is more to do with certainty of return on the investment. With multiple operators on the island, including Sure, Wi-Manx, and the government-owned E-llan Communications (part of the MUA), there could be a free for all with multiple suppliers installing fibre, driving up costs by splitting the market and creating a scenario where no single player can have the critical mass necessary to justify the investment. E-llan in particular is rumoured to have significant amount of fibre already in place laid concurrently with the renewal of electricity cables and thereby substantially reducing installation costs. Any other operator on the island could start a fibre roll-out only to be potentially undercut by a state-owned competitor.

The Isle of Man needs fibre broadband, Peter Cochrane’s authoritative analysis of the technologically comparable UK situation makes that obvious. Jersey Telecom is well on with its Digital Jersey fibre roll-out, already they have covered about half the Jersey population. If the Isle of Man’s Vision 2020 ambition for e-Business to be a major contributor to our economy is to succeed we have to have fibre soon, otherwise we might consider a return to exporting spuds and herring whilst our competitors in Jersey, Gibraltar, Malta, Hong Kong and on-shore jurisdictions such as New Zealand surge ahead as digital leaders, a risk that was similarly highlighted in an expert independent report commissioned by the Guernsey government. The problem is de-risking the investment, and the solution to that must lie with our government - both as regulator and as the owner of a major fibre network.

I don’t claim to know what the answer is. One obvious path would be to give MT, or another operator, sole license to roll-out FTTP - but I suspect the idea of a new profit-making monopoly would be as welcome as a pay rise for MHKs. Perhaps a solution is for the government to finance the installation of FTTP, which will be new national infrastructure no less important than our roads and airport, and then rent it out to the telecommunications providers as an enduring source of government income to help offset the public sector pension bungle. I am sure there are many ways of solving the problem, and Gary tells me that Manx Telecom have been talking to government about fibre.

The upshot is that we need certainty, we need a national strategy which is signed up to by government, Communications Commission and telecommunication companies so that a fibre roll-out can proceed, as a matter of urgency. Our major competitors already have a head start and whilst a strategic decision now could see the island with complete fibre broadband coverage before 2020, it won’t happen unless the parties involved can come together through some regulatory and collaborative arrangement that will permit those with the money to take the risk.