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Britain's looming broadband crisis

I'd like to ask you about next generation access (NGA), which is the UK's term for telephone companies installing high-speed fibre optic cables. NGA covers things like advanced high-speed wireless infrastructure. But more importantly, when you compare it to North America and Asia they are talking about fibre optic cable. There have been several studies - including one by the the Broadband Stakeholders Group - which have talked about the lack of UK investment in fibre optic cable and how important that investment will be in the future in things like education and commerce and online video. Ofcom has made some initial inquiries into this. What's your view on what needs to happen, apart from studying the issue more? There has been an issue of public subsidy of fibre optics. Ofcom has slammed the door on that. Or there is an issue that it may be some sort of market structure in the UK that is causing this - for example, the separation of BT into its wholesale and retail parts. Or, as Ofcom has suggested, the time may just not be right. For whatever reasons the UK might be lagging, there could be legitimate reasons. Do you have a view?

I have a concern of a strategic nature of Ofcom's role which may play a part in that. All the pressures on Ofcom deal with the consumer issues - the individual consumer issues that would attract headlines in the Daily Mail and The Sun rather than the issues that would attract headlines in the Financial Times. I think Ofcom are often distracted by these huge debates about childhood obesity or by the telecommunications market - international roaming charges. That's not to say they are not important issues. They are. But the underlying concern I have is that when we talk about the infrastructure of the UK, the telecommunications infrastructure is probably the most important one now. I would say it is more important than the roads.

Getting a good telecommunications system is more important than good roads in the UK - at least as important, but probably more important.

I'm worried that Ofcom are being driven a lot of the time into putting their effort into the consumer issues whether on the broadcasting side of the house or on the telecommunications side of the house. I just get that sense that there is not that same pressure on them from the outside to deliver on these business-based concerns. I think Ofcom may want to, but their success or failure is judged on these frankly less important issues, strategically. Politically more sensitive, but actually strategically less interesting.

I hope I am wrong, but I get the sense that therefore as a result they inevitably attract a lower profile within the organisation.

What could Ofcom do? Should Ofcom raise this in a more urgent manner with Parliament? Is that the next step for Ofcom?

I think we Parliamentarians need to make sure Ofcom is under proper scrutiny on this issue. I think there is an assumption in the UK that we have a liberalised telecommunications market. It is better than any other telecommunications market in the world. We have an arrogant assumption that we are ahead of the game and we will stay there automatically by some magical process. And I don't think this assumption is well-founded.

And I don't think we understand the way in which competition will grow internationally - both in the telecommunications market and more generally and if our infrastructure can actually deliver, particularly (but not only) for the City of London that requires service of the highest possible standard. So we need to keep putting enough pressure on Ofcom so that they make enough of their resources in time. Otherwise, the real danger is that we will switch entirely over to being run by a tabloid agenda.

Why haven't people learned from what happened in broadband?

I do still think that BT as an organisation has not made a lot of progress. It doesn't convince me that it's learned lessons.

I remain unconvinced by the separation of BT into wholesale and retail. I'm not convinced that Openreach is adequately separated. I'm not saying it has to go whole hog into separate companies, but I remain unconvinced, and I think it does give the incumbent retail operator a big advantage. That concerns me. For me it's competition that drives innovation more than anything else, not regulation.

The whole debate about Local Loop Unbundling and rates is an example where there is a slowness in the government to move to put competitors on a level playing field. I think that is beginning to be addressed. I think we've got the Department of Communities and Local Government understanding that it's important now. They were really dragging their feet on that issue. It's so disappointing to see such an important issue for competition - which I think is the answer to the problem - so far down the priority list in government.

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