As Dick Van Dyke says in Mary Poppins just before they jump into the chalk drawing: “You do a wink and a double blink …” Now a double blink is what I did when I read: “HS2 could help spread high-speed broadband, minister says” in The Guardian this morning I only needed to add the wink and I could have joined Dick, the children and Mary Poppins in cartoon world. Adding benefits such as infrastructure distribution to major engineering projects is, and should be, a given side benefit though the minister in question, Simon Burns, doesn’t go into how they might differentiate the public subsidy from the private investment in order to get around the State Aid implications of this. In a desperate attempt to re-position HS2 after the demolition of the business case the government is still showing that they just don’t “get it”.
HS2 is not going to pass through my back yard so I confess to a somewhat disconnected view of the whole affair. At a push I can see the importance of central government investment in public works to stimulate the economy; at a bit more of a push I can see a benefit of a direct fast link from major cities to Heathrow though equally I can’t see that the amount of investment will yield the level of benefit claimed. What irks more than anything else though is that the government and local authorities can commit to £30+ billion of investment in a flimsy business case and yet they cannot invest more than £500m – leveraged to £1Bn eventually – in broadband technology where the business case has been repeatedly proven time after time.
On 7th January 2013, amidst a day of manic publicity on a “no news day”, we saw the launch of “The superfast and the Furious: Priorities for the future of UK broadband policy” by the Policy Exchange. The report amounted to a policy basis for leaving rural areas in the digital dark ages arguing that people don’t know how much bandwidth they use so they don’t really know what they want. The report tries to make a case that once the current spend on broadband is over in 2015 the focus should shift to empowering consumers and businesses to make best use of the internet while creating conditions for the private sector to meet the demand through reduced regulation and long term regulatory certainty.
As evidence the report cites a literature review and a survey of 2000 people and 500 businesses but doesn’t say where the survey took place, what the split of rural to urban participants was. Simply that it was weighted to be nationally representative.
Key points where rural is mentioned as a distinguishing feature:
- Price and reliability matter most to consumers: rural areas see reliability as more of an issue than urban or suburban areas (by 14 percentage points over urban participants) Why is that I wonder? Perhaps because it fails more often in rural areas?
- On the issue of improved broadband over environmental protection (I guess they’re talking street cabinets here) urban and suburban participants are lumped into one for reasons not given. Virtually no difference in the responses, only 1 percentage point and based on n=875. But wait a minute, wasn’t the previous point based on n=1,752? Similarly for broadband speed over environmental issues virtually no difference.
- On the issue of access, should everybody have broadband almost total agreement between urban and rural areas. However, where there was a question of cost, unsurprisingly a greater number of rural participants disagreed that they should pay more for access by 11% points with only 16% of rural participants thinking that they should. Are we surprise and by this?
- Is infrastructure a priority for the public? Almost no difference in the responses between urban, suburban and rural participants. Regarding the case for government spending again almost no difference in the responses between urban and rural participants and also broad agreement that infrastructure is a top priority for business.
Rural responses are not identified in the other questions but despite broad agreement being a feature of all of the above the conclusion is that policy should focus on making the most of what we have.
The executive summary outlines the case that ending support for infrastructure after the current spending round is in line with a localism agenda and that a better policy focus would be on raising the capability of individuals. The report argues for consumer empowerment which it interprets as helping consumers find the right supplier. The Long View talks about Smart cities, Intelligent transport and future tech and then identifies the route to connectivity for rural areas as WiFi and use of the newly released TV Spectrum. Finally the report argues the case for strengthening the role of the Minister and then highlights the importance of the consumer, the importance of retail and the need to embed connectivity into Government and mainstream business.
The report is flawed in a number of ways and its purpose is simply to justify the further isolation of the rural economy from the mainstream.
The report misrepresents the market place for superfast broadband. It’s hard to argue the case for localism when you have a centralist government that has just disempowered local people in the planning process in favour of developers. What the report ignores is that much as we parade our successful ISPs and the LLU market place it fails to address the fact that we have a single infrastructure provider of significant market power which means that ISPs only offer what is available and people only choose from what they are offered. In short, this is not an argument for stopping central investment. The report also fails to point out that of all the suppliers listed only BT has a significant wholesale offer .
The report fails to understand that the current Internet success is based on a model of consumption – not production. It talks in terms of the empowered consumer not just for broadband services but in terms of a growth in GDP driven by a nation of Internet shoppers. This view of the Internet where the majority consumes whilst the minority produces is not a long term economic driver irrespective of the speed or the symmetry of the broadband connection. Future economic success has to be based on a model of production as well as consumption and rural areas have as much a right and capactiy to participate in that economy as anybody else. The speed and symmetry of the broadband connection are the limitations on innovation that will impact on economic growth.
The report makes much of previous research and as a digest of previous work including the respected Plum report it’s worth a read. I have read the vast majority of these reports, not one of them makes the case for stopping investment or for having rural areas left out of the equation or being treated less equitably.
Another significant failure of this report is that is treats city/urban and rural as separate not only with different perceptions (which is clearly not the case) or with different needs (for which it fails to make the case) but the success of intelligent and smart cities depends on connectivity with a smart rural hinterland. Cities do not exist in isolation, they are connected with and dependent on rural areas for food, water, transit routes, skilled individuals, niche companies, artisan products, leisure facilities, carbon offset and increasingly for power supply routes. You cannot treat them as separate entities. So why would you treat them as lesser entities.
There are individual statements in this report with which you cannot disagree: you cannot disagree with regulatory certainty for instance not can you disagree with the needs of business or the expectations of Government service delivery. However the conclusions drawn by the authors are not borne out by the evidence they have collected and that is because this is a report with a political bias. A simple search on the trustees of the policy exchange reveals a body of ex Conservative ministers and Tory donors who have an agenda and to my mind that devalues this document as a foundation for policy development.