FairFibre response to the Department for Culture, Media & Sport's Call for Evidence: Extending Local Full Fibre Broadband Networks:
Introduction to FairFibre:
FairFibre’s mission is to make the UK the World’s most pure fibre optic connected nation by 2022. We see; this infrastructure is critical to the success of the UK; that demand is proven; that supply and private finance are readily available; but that poor regulation and unfair market practices stand in the way. DCMS can swiftly and at little cost change this ecosystem. The January 2017 green paper on industrial strategy states “Research suggests that increased broadband speeds alone could add £17 billion to UK output by 2024”.
FairFibre is a software based toolkit which will help create and administer local co-operatives, enable them to find contractors, get quotes, and finance the installation of their own FTTP. This will lead to greater, faster, rollout of pure fibre infrastructure at insignificant cost to the Exchequer.
Chair - Paul Dickinson: low-carbon infrastructure and technology
Founder and Chair Eyenetwork, Europe’s largest video communication company 1996 to 2016. In 2001 Paul founded the Carbon Disclosure Project of which he is Chair, it is the world’s largest investor, corporate and city collaboration on climate change, 95% of FTSE 100 companies report to investors through CDP. (www.cdp.net).
CEO - Mark Latham: communications and media technology
Mark has founded a number of businesses in media, publishing and broadcasting and developed products including the award-winning Investor Services Journal, TV3 Russia, Global Securities Lending forums. He has also worked with Charity Projects (Comic Relief) and in the non-profit sector. His experience in the development of television infrastructure in the 1990s led to his interest in full fibre connectivity. He has extensive experience of international business having contracted to government agencies in both PR China and the Russian Federation. Mark is a partner at 2i Partners in London.
CTO - Steve Karmeinsky: telecoms technology/infrastructure FBCS, CITP, MIET, MIEEE
Steve’s career began designing hardware and programming in medical electronics. He then went to Cellnet allegedly as a programmer, but designed and rolled out their wide area extended LAN in the early '90s, the network used TCP/IP (this was before there was a commercial Internet in the UK). Steve then joined start-up Demon Internet as Business Development Manager in 1994, part of the management team that grew it into the largest consumer ISP. As spokesperson for the company Steve appeared on “The Today” news program on Radio 4 and became a “futures visionary”, as Head of Product Futures of Thus plc, as it had become. As well as serving on the board of UK ENUM (mapping telephony into DNS) Steve is a non-exec at several start-ups including Seldon (machine learning as a service) and DBVu (centralized MySQL monitoring and performance tuning). Steve co-founded City Meets Tech which bridges City of London investors and tech start-ups and is on the Program Committee for UKNOF (a conference for anyone involved in UK infrastructure). Career highlights: Instigated Demon’s virtual Point-of-Presence architecture (which evolved into 0845 non-geographic numbers). Designed Demon’s (initial) ADSL service. Help set-up UK01 low power GSM operator.
In response of the call for evidence we will contribute to all three main areas identified by the DCMS.
Section 1: Existing activity
Clearly current approaches are failing. Given that the deployment of fibre infrastructure relies on the willing cooperation of an organisation which benefits most from copper cable line rental (at £20 per household per month) it is not surprising the Japan has a fibre network infrastructure with 30 times the premises penetration percentage of the UK. Moreover, the approach of subsidising network overbuild with public money is clearly counter-productive. Privately-funded, nimble and relatively new market participants are hamstrung by the anti-competitive practice, an example is subsidised overbuild but the problem is endemic in certain participants. Demand becomes irrelevant in the face of this manipulation. We also see that demand data is currently kept in dark silos to no benefit of the prospective consumer.
Section 2: Different approaches
FairFibre is a different approach. A software driven toolkit, FairFibre enables consumers (business and residential) to get together, find competitive quotes for installation, maintenance and service provision and then to match those quotes within the toolkit against offers of finance - usually from “new” finance market entrants such as peer to peer lenders. The users share ownership of the infrastructure.
Section 3: Government approach
Firstly, we call on government to stop doing harm to the mission of extending fibre network infrastructure to a greater number premises by preventing anti-competitive overbuild by market dominants using public subsidy.
Secondly we adopt the excellent recommendations of the INCA co-op, particularly on wayleaves and opening data and mapping of existing networks and nodes, and we would particularly press to include TfL, military overcapacity, power companies and so on in this market building resource.
Thirdly the government can make demand data available in simple, safe and fair ways. Enquiries about fibre connections should not be told it is unavailable and they should wait, they should be informed about existing community fibre partnerships or toolkits such as FairFibre, as well as smaller network provider listings.
What local approaches have been taken to date or are planned - either in the UK or internationally - to stimulate the market delivery of full fibre networks, in both urban and rural areas, and what results have they achieved? Where appropriate please provide evidence and any other additional information.
The starting point has to be the massive deployment to premises of full fibre in Japan and South Korea over 90% FTTP/B coverage versus just 3% in the UK in 2015, (source OECD).
Overbuild leads to No Build
Why can’t we match other country’s fibre rollout? The answer is UK Government policy is to subsidise with public money network overbuild which drives away private finance. The privately funded ‘new’ providers, such as Gigaclear for example, (NB FairFibre have no connection, nor indeed contact with Gigaclear) are threatened by competing fibre overbuild of up to half of their fibre networks by the subsidised anti-competitive actions of a semi-state market participant. Gigaclear was only established in 2010 but already they calculate 45% of their networks suffer competing overbuild (2016 accounts). This is a large disincentive to private capital supporting full fibre rollout.
Recommendations: FairFibre agree with and adopt all recommendations contained in the report from INCA, ‘Building Gigabit Britain’, especially: ‘ensure that tight and strictly enforced rules are in place prohibiting the overbuild of FTTP networks using public subsidy’. (http://www.inca.coop/policy/building-gigabit-britain-report)
FairFibre has identified other immediate, low-cost actions that DCMS can implement to stimulate the market…
Demand – transparent aggregation
Pent up demand of residents and SMEs is currently hidden in duplicative online software programs which are designed to flush out demand and then squat on that data for commercial advantage. This misuse of data prevents a clear, transparent, view of local demand that is not what the consumer who provided and owns that data expected or wanted. Examples are:
Once the user has entered their postcode and usually been told fibre is currently unavailable there is no further outcome, the data is squatted on until it suits the (non) provider to review provision.
FairFibre have identified that these databases must be aggregated and transparent urgently so consumers and businesses can effectively collaborate to acquire the fibre they need.
Users who cannot currently be provided with fibre should be directed to community fibre partnerships or toolkits to help build co-operatives such as FairFibre. These should be independent of large network providers otherwise the data will again be archived and sat on. FairFibre propose that all providers who offer postcode based records of demand should be compelled to hand these over to a neutral register of local residents who have expressed preferences, or avoid such data squatting as occurs by having a single official database. Participants will enter the system anonymised, but will have the potential to publicly identify themselves by username if they so wish. This would of course be no more intrusive than the telephone directory.
Such a database could also helpfully aggregate growing demand for electric car charging stations, such that necessary cable laying can be combined where practical to reduce cost and disruption.
FairFibre recognises the clear need to offer a service to this database – which others may also seek to offer – whereby a software platform facilitates toolkit structures such that discrete cooperative ventures between local members can be efficiently formed.
It is important to appreciate that local demand is an asset that belongs to the citizens of an area, not any one service provider.
Empty ducting to all new build developments, whether a single home or thousands, should be mandated as part of local authority planning permission, as the government rolls out housebuilding targets this marginal cost will futureproof Britain and enable local choice. Housebuilders will bear this nominal cost if there is a level playing field of regulation as they increasing understand fibre as a benefit, which will help sell homes
What evidence is there to demonstrate the effectiveness and potential of approaches A to F, specifically in the context of stimulating the rollout of local full fibre networks in urban and rural areas?
A: If local potential consumers could see a public sector “anchor customer” in the vicinity which was displayed as interested in full fibre that may in turn stimulate co-operative and community fibre partnership formation.
B: Voucher schemes need extensive publicity to be fairly distributed, again using these as an outcome on the postcode checking aggregated website is worth consideration. Otherwise this remains a niche solution. It could be that the government supported co-operatives with a nominal amount via voucher if they had managed to sign up a critical mass of members to qualify. Supporting co-operatives of businesses and residents together would spread the voucher investment much more widely than targeting single “uneconomic” customers.
Consumer mix: FairFibre toolkit is designed to help local people, businesses, residents, institutions or a mixture of these, to get together to reduce the cost of installing FTTP and to own their own future-proofed infrastructure, vouchers could help publicise the opportunity to Do It Yourselves, With Us which we believe will drive full fibre rollout faster to more premises.
C: Making public sector assets available is vital, but this requires accessible and transparent mapping of these assets to be available through a neutral source. TfL infrastructure and military overcapacity could be important in building this resource.
D: Existing data sets should be combined into a central infrastructure dataset administered neutrally, perhaps by the regulator. This is not proprietary data, it is necessary to have access to this data set to build into the network. These maps should be available to local taxpayers for no charge.
E: BDUK’s use of public subsidy should be confined to Fibre to the Node, FTTN combined with a ban on overbuild subsidy this would stimulate realistic local demand.
F: Potential for a FairFibre pilot switching from copper to fibre in an area. Co-op members would be financing the “tail” installation and would need long term assurances on backhaul pricing.
Top down isn’t working
The FairFibre toolkit will support these measures by building co-operative ventures, integrating legal and finance pathways, and managing installations. This is a bottom-up approach empowering individuals.
FairFibre recognises the reality that government can use their powers, as discussed in A-F above, to unleash local, grass roots, demand for gigabit broadband which will germinate into pure fibre networks; privately financed and locally owned.
What is the most effective and efficient delivery model Government can use to stimulate future delivery of full fibre networks across the UK in both urban and rural areas, building on and integrating approaches that have been taken to date?
Demand side data:
Local, grassroots demand needs to have a way of collaborating.
Ofcom ‘Mobile and Broadband Checker’ smartphone app
The Ofcom ‘Mobile and Broadband Checker’ smartphone app currently serves up, at the end of the user experience, a red cross next to “ultrafast” >200 mbps availability (see problematic terminology below) for the vast majority of postcodes. If this and similar publically funded initiatives gave users a pathway to fulfilling demand for fibre instead of a red cross people would follow it to local community fibre organisations or toolkit solutions such as FairFibre.
Efficient Delivery Model(s) – should be local and adaptable
FairFibre can provides materials and methods to enable residents and / or Small and Medium sized Enterprises (SMEs) to build transparent local aggregation, asking their neighbours if they want gigabit broadband, exploring costs, surveys and finance.
The cooperatives that need to be formed are a somewhat like resident’s organizations for owning the freehold or managing communal areas of private buildings, although they will only need to meet a few times before the work is done.
Each local co-operatively owned infrastructure group, (i.e. “Brighton21”) will be created when a committed individual takes account of the significant demand in their area from the aggregated database of expressions of interest made available through government intervention.
The individual will become Chair and will appoint a Secretary, and together they will run a doorstep campaign with clipboards, white rosettes (after pure fibre optic lasers), leaflets, explaining the goal, the timescales as well as the process, and then signing up members. The members of a co-op who spend the most time on this, or on other listed tasks, will receive incentives through a discount on their own connection.
FairFibre will always include VOIP telephone handsets so no copper line “rental” is payable.
Achieving the final connection:
The FairFibre system will arrange for registered network provider, either large telecommunications providers or local alternative networks “altnets”, to quote the members for packages which can include installation and full provision of internet connection (‘backhaul’) and communications (ISP services) or parts of it.
FairFibre is installer or provider blind and this is the key to mass aggregation of demand to deploy fibre.
FairFibre will help the co-operatives to get surveys, competitive quotations, planning permissions, and to appoint a contractor.
Private loan finance: key to fast rollout
The third side of the FairFibre triangle after members (demand) and providers (infrastructure builders), is finance companies. This will include both conventional institutional investors, where there is great appetite for proven infrastructure with yield, as well as new, disruptive providers such as peer to peer lenders (P2P) who want to lend to individuals against fibre infrastructure because they think it’s a good risk, and because of this they offer good rates to our members. Loans will be calculated at averages of 48 or 60 months with no redemption penalties, and FairFibre will take no commissions. The service will be readily affordable to users because they will suffer from no more copper line rental (£20 a month) and for many, no more satellite subscriptions. At the end of the loan period they will own a share in the future proof fibre, forever.
What other changes, localy and/or nationally, are needed to reduce the cost of full fibre rollout, such as opening access to publicly and privately owned facilities, or changes to wayleaves, streetworks and other areas? What evidence is there to demonstrate the effectiveness of such changes?
Opening access to this fibre backbone is vital for rollout. Wayleaves and common sense approaches to cable installation are covered extensively in the INCA Gigabit Britain recommendations referred to above.
Safety: As fibre optic cable is a safe and inert infrastructure compared with gas, sewage, electricity and water we pipe into our homes consideration should be given to flexible permissions for installation, for example by “grooving” roads, or ducting under kerbstones, established practice in the US and other markets.
Supply Side data: DCMS can open network data on the position of nodes, fibre backbone and other information currently held by BT Openreach, BT Wholesale or not collated and in networks belonging to power suppliers, railways and local authorities.
Home (and business) improvement
Just as millions of home owners increased the value of their properties by collaborating to purchase their freehold title, so householders will collaborate efficiently to obtain fibre connections, and thereby further increase the value of their home.
To build fibre roll out across the UK it will be necessary to unleash the entrepreneurial capability of individuals across the country and combine it with available private finance.
Infrastructure loans represent a good risk.
In the future our co-operative members will enjoy an asset. As neighbouring streets join FairFibre, or other networks connect to our nodes, the ‘founder networks’ that a particular co-operative has installed will receive income reducing the cost of their loans. British people will use their business skills to equip themselves for the future in an empowering and virtuous co-operative and private sector process.
Social exclusion: It is important for public sector landlords, housing associations and private social tenants to join pure fibre networks, whether as anchor tenants or with discounts due to their critical mass. Fibre is a relatively low cost and the provision would support current government policy regarding increasing online government.
The market in full fibre provision is structurally atrophied in a way that further public subsidy alone, and perhaps at all, will not cure. A bonfire of anti-competitive practices is necessary. Insistence on public availability of relevant data sets, especially mapping these for consumer consumption, is necessary to create the opportunity for faster and greater full fibre deployment.
We reiterate that it is vital to ensure proven demand is not segregated in to silos amongst competing providers. Statements of demand belong to the citizens, who can co-operate and get the job done if the government will intervene to allow public demand aggregation to flourish.
Government and regulator communication initiatives such as the Ofcom ‘Mobile and Broadband Checker’ smartphone app must be developed to take the user to a palpable destination; whether a list of alternative contractors or co-operatives and partnerships, at the moment they just conceal the availability of a fibre connection.
Opening backbone network data sets is equally vital.
Overbuild with public subsidy must cease.
Terminology, our final request is that the DCMS and Ofcom work to outlaw the hyperbole and deception behind terms such as “superfast”, “ultrafast”, “infinite”, etc. The confusion and frustration caused to consumers by this is regrettable and counter productive to the departments stated aims.
In technology it is straightforward to use measurable and reproducible speeds to create “official bands” such as:
Table of internet download speeds by proposed ‘official’ bands
Band 0 = up to 2 Mpbs,
Band 1 = up to 24 Mpbs,
Band 2 = up to 60 Mpbs,
Band 3 = up to 200 Mpbs,
Band 4 = up to 1000 Mpbs/ 1 Gigabit
Band 5 = up to 5 Gbps.
Such codification can clarify the market for all participants.
Finally, I would like to thank the DCMS, and the Minister, Rt Hon. Matt Hancock MP, for this opportunity to share our thoughts on our marketplace.