Like many other organisations the CMA has been busy preparing its response to Ofcom’s consultation on Future Broadband.  The closing date is 5^th December and soon after you should be able to check out the responses on Ofcom’s website. 

If you cannot wait another week then CMA’s input will already be available at www.thecma.com .  You may think it’s a very robust response to Ofcom’s plans but the CMA is in the fortunate position of being seen as a ‘critical friend’ of the regulator; it enables us to say things that others in the industry might not, and to say things that represent the views of business consumers rather than operators and service providers.  And the CMA’s input is also informing the work of the Broadband Stakeholders Group as it tries to push forward the agenda for a fully fibred UK.

Writing a month ahead of the event it is pointless trying to second guess the positions taken by other respondents but these consultations don’t happen in a vacuum.  The real world is already moving on.  The UK doesn’t have the luxury of unlimited time to debate Ofcom’s remit to have ‘regard to the desirability of encouraging the availability’ of high speed networks.   In other countries new investors in fibre infrastructure are making faster progress and learning on the job – and enabling customers to explore a wider choice of competitive services.

Forking out for fibre nationwide is not the sort of investment that is easily cost justified.  The case demands a value justification that embraces a wider range of reasons to move forward.  A decade ago  many enterprises were still paralysed by an inability to develop measures of value and indirect benefits.  It was thought counter-intuitive to invest at the edge of the enterprise rather than the centre.  No-one who’s been through a period of growth by acquisition will ever again underestimate the value of being able to quickly integrate a new set of transaction systems with those of the parent company.

This approach, this notion of investing for future flexibility, is writ large in the current consultation – and is perhaps best illustrated by the competing claims for different local fibre architectures.  As a general rule incumbents around the world seem to prefer the supposedly cheaper Passive Optical Network (PON) relative to, say, an Ethernet Point to Point design.  A recent French government study showed that the costs differences were actually turning out to be only 8% rather than the 30-50% claimed by PON enthusiasts.   The extra 8%, according to the French upstart Free Iliad, is fairly easily justified when you consider the ease with which the infrastructure can be expanded to meet future demand and unbundled to give customers a wider service choice. 

There are big numbers in this debate.  Infrastructure investors may have to stump up in total perhaps around half the costs of those 3G licences – or maybe as much as London’s Cross-Rail project.   Obviously it will help investors if the future regulatory rules are clear but it would be tragic if they didn’t also encourage a new wave of infrastructure investment in the UK and a wholesale replacement of all those current inhibitions, market-entry barriers and ‘ease of choice’ issues that get in the way of rapid service innovation. 

To help bolt down some of the numbers and rebalance the focus between household and enterprise requirements for future broadband, the CMA is running a demand survey amongst businesses in conjunction with the BCS.

So please take a few moments to check out how your industry has responded to Ofcom’s question about when it might be ‘timely and efficient’ to invest in a fibre future.  The answers could well determine what sort of market opportunities will be open to UK Channel enterprises by the time we get to the 2012 Olympics.

This editorial feature was first published on Comms Business magazine - December 2007  

CMA Members, Associates and Partners work together for better regulation, service innovation, market education and infrastructure enhancement. For membership and event details  contact Sylvia Scottow, +44 (0) 1372 36 1234,  This e-mail address is being protected from spambots. You need JavaScript enabled to view it