Comment

Competition is crucial for next-generation networks

Platform: Internet | Author: Jonathan Williams | Source: NMA magazine | Published: 05.07.07

Email article | Printer Friendly | Comment on this articlemore Comment

It's often noted that the recent stability and strength of the UK economy has been due in part to the ability to maximise the potential of new technologies, itself borne from a sensible attitude to regulation.

So it was with some concern that many greeted a recent Broadband Stakeholder Group (BSG) report suggesting that unless uncertainties surrounding next-generation broadband are resolved within two years, UK competitiveness may suffer and the digital divide widen.

The BSG is unconvinced...

Article continues below

... that the market will deliver the ever-increasing bandwidth that users and content providers expect. However, the solution to this problem is far from clear and there's little indication that the Government will commit public sector funding to the next-generation network (NGN) dilemma.

If the commercial case for further investment is uncertain, industry faces the danger of becoming overly reliant on the BT 21 Century Network (21CN) to deliver the UK's next-generation network requirements. 21CN is not the only NGN being developed for the UK - Thus and Cable & Wireless are longstanding rivals - but it will certainly be the largest example in the country by the time it's rolled out at the end of 2011. In this context, it's imperative that Ofcom does everything it can to encourage competition, a point also noted in the BSG report.

One possible solution being mooted is for Ofcom to regulate BT's next-generation network in a similar way it ordered the company to allow rivals access to its broadband infrastructure, following its Strategic Review of Telecommunications in 2004/05. The recent Ofcom document, Regulatory Challenges Posed by Next-Generation Access Networks, suggests that this is where the regulator's thinking lies.

A potential development referred to in Ofcom's report is that wireless access technologies, such as WiMax, could provide a competitive alternative to wired NGN access. This would result in increased competition and decrease the need for intervention by the regulator. Ofcom and others since have however questioned if this competitive alternative will in fact materialise.

Additional regulation may therefore be required, in the same way that Ofcom compelled BT to allow competitor operators access to its local networks. These competitors were then able to upgrade individual lines using DSL to offer services such as always-on high-speed internet access, direct to the customer. Ofcom is aware that such a strategy would need to be balanced against the risk and cost of rolling out a next-generation network.

Once 21CN is introduced, it will also be crucial that BT treats all customers the same. Equivalence of product, process and price for ser-vice providers should not be an aim but a minimum requirement for NGNs. Barriers to achieving equivalence of inputs to 21CN, such as security, standards, supports and scale, are surmountable given time and appropriate regulatory guidance and vigilance. A system of flexible regulation that can be focused on key bottlenecks and rolled back in other areas would grow a competitive industry and drive innovation.

Ofcom showed with its Strategic Review of Telecommunications that it's not afraid of tackling BT's dominance when required, and its efforts on that occasion helped contribute to the highly competitive UK ISP industry we have today. A similarly thorough approach to the question of regulating next-generation networks will be needed if UK plc is not to suffer the consequences.

Jonathan Williams is senior account manager with Political Intelligence, the UK's leading new media public affairs consultancy; jonathan@ political-intelligence.com