Alcatel-Lucent considers Digital Britain challenges

Digital Britain needs an environment of open standards and communication to succeed

The Digital Britain report is a good stake in the ground, according to networking giant Alcatel-Lucent, but a lot of challenges need to be overcome to make it a reality.

At a recent round table in London, Alcatel-Lucent's Andy King, director for UK and Ireland, and Houston Spencer, vice president for solutions and marketing in North Europe, discussed how the UK telecoms market can meet the goals laid out in the report.

The debate addressed network proliferation versus network consolidation, speed versus capacity, and the major issue of financing next-generation access (NGA) technologies.

The government is exploring wired and wireless methods to help deliver broadband to everyone, but the tax being introduced to help pay for these measures is being levied only on those with fixed lines.

Furthermore, it would appear that wireless is being largely ignored, beyond mobile data access, as a way of providing coverage for rural areas, and Alcatel-Lucent believes that the Digital Britain proposals could have considered an early release of 800MHz spectrum to help push the creation of wireless networks in these areas.

This flies in face of demands seen by Alcatel-Lucent, which said that it is regularly approached by communities and municipalities that want to set up their own NGA networks.

The growth in open access networks run by local groups rather than traditional network operators is resulting in a patchwork approach to NGA, and has led to the creation of groups such as the Independent Networks Co-operative Association, a standards authority for companies that are building a network in the UK but are not traditional service providers.

As the infrastructure is owned separately in community projects, this changes the business model for telcos, which are now faced with the question of whether to unbundle networks or aspire to roll out one big network.

On the one hand, it is hard for communities to formulate a business case and quantify the expected benefits of an open access network as compared to a telco calculating its return on investment. But there are huge community benefits, such as better access to health, education and public services, that make a compelling investment case.

Many have slammed the government's proposal of a minimum 2Mbit/s service for everyone as not being sufficiently ambitious, but Spencer believes this will act as a 'Rubicon' which, in order to cross, will "require an infrastructure change which will enable better speeds, services and capacity".

"Focusing on speed to the exclusion of back-haul capacity in terms of how broadband is going to evolve is frustrating," he added.

In addition, it must be heeded that Digital Britain author Stephen Carter envisaged 2Mbit/s as a minimum for the entire population, and that a genuine 2Mbit/s connection is more than sufficient to run most applications, including high-bandwidth services such as the BBC iPlayer.

"The speed argument only goes so far; it's about the services you can get through increased bandwidth which is going to allow you to run many more apps in parallel," said King.

King also pointed out that the kinds of applications which would require the 800Mbit/s to 1Gbit/s speeds being touted by some companies are not even around yet. He highlighted figures from Denmark, which show that subscriptions in the 50Mbit/s to 100Mbit/s range rarely use applications that require much more than 8Mbit/s to 20Mbit/s.

"We are seeing a 20Mbit/s 'speed bump' for applications available at the moment until there will be services around which require the higher speed," he said.

When it comes to charging for access and services, both King and Spencer believe that the current broadband business model is unsustainable, and must change at the telco and content provider levels.

"Providers have created a great competitive environment with low prices, and are now faced with a dependence on cross-subsidisation," explained Spencer.

"More capacity is needed, yet there is no willingness to pay for it. The mis-marketing of broadband as a flat-fee package has taught users to expect to consume more and pay less."

Many ISPs currently prop up their broadband service by cross-subsidising it with voice, pay TV, handsets and so on. However, with increasing demand being placed on their networks, most see little incentive to invest in upgrading infrastructure when they make little or no money doing so.

For networks to become cost effective in delivering bandwidth, operators and content providers need to work together, according to King and Spencer.

"It is hard to say what fair split of the advertising revenue between YouTube and an operator for broadcasting an ad along with high quality content would look like," said Spencer. "But the biggest challenge at the moment is to create that industry-level contact in which new business model ideas can form, and negotiations about value sharing can take place."

With all these issues in mind, Spencer and King concluded that the goals set out in the Digital Britain report will be achieved only if all players break out of the traditionally closed and proprietary practices used in the telecoms and services delivery market, and instead foster an environment of open standards and communication, allowing businesses to thrive and all forms of access to integrate properly.