An action plan for Ofcom
Turning the retriever into a greyhound
Industry comment The government had its heart in the right place in consolidating all the major communications agencies into one. Broadly speaking, Ofcom has done relatively well, whether its palace of a reception area cost half its yearly budget or not. LLU lines are growing rapidly, our digital television market is the most developed in the world, and a sensibly conservative attitude to new technologies is being enforced. Generally, the regulator has been sensitive to commercial interests, but it could do so much more.
The most striking absence you immediately notice in any office, committee, or working group in Westminster is vision. It’s almost like some of these mandarin houses are aimlessly drifting through each waiting to be told what to do. Vision gets you from A to B, by telling you where B actually is. Without it, we are directionless and impotent. The UK’s point B is so vague that we rely on the ideas of ministers who have trouble using email, let alone understanding the new technologies that will affect our lives in the coming future. Vision requires you to listen, think and imagine. It means looking over the treetops to see the forest.
Our vision should be of a digital world where broadband internet connectivity is universally available everywhere, for everyone, at any time, on any device. Our economy needs to adapt to the changing face of global knowledge-based business by being entirely digital, forcing prices down every minute of the day (not squeezing the last pennies out of people), and empowering people to create innovative new products and services. Vision means we work out where point B is, without necessarily knowing immediately how we are going to get there. We need to define our mission, our target, and where we want our country to be in the next 20 years in detail greater than is offered by superficial political pledges delivered for their feel-good factor.
Create a working group for next-generation technology (IPTV)
The world is ablaze with talk of IPTV, IMS infrastructure and a new generation of entertainment services that will offer everyone an entirely new level of choice and personalisation, but despite all the talent and mind-power collected in Southwark and Parliament Square, Westminster hasn’t noticed. Or if it has, it's not too interested in talking about it. New services and platforms require support from governmental organisations, and often take their lead from them in many ways.
Without wanting to state the obvious, the future requires foresight. Foresight comes from time spent mulling the state of play and where the next movements will be made. Time requires resources and investment, and they are needed everywhere, all the time. Ofcom is a consolidated agency formed from the ruins of a number of different agencies such as the ITC, Oftel and radio regulators. The internet as a whole falls under telecommunication but has no real representation.
We need a very specific division and/or working group responsible for issuing guidance, reporting growth on, solving problems and chairing debate on converged media systems such as IP telephony, universal connectivity, IPTV and media on-demand. This group needs to intimately liaise with legislators, technicians, executives and proponents involved with the deployment of these platforms and services, for the purposes of aggressively encouraging their creation, and managing their contribution to both the UK’s digital ecosystem and larger overall economy.
Increase terrestrial TV capacity tenfold
In the recent past, technical advances in statistical multiplexing, as well as clever smoke and mirror timesharing (e.g. CBeebies/BBC Three) have given us additional channels on the DVB-T platform. Switching the last analogue signal over to compressed digital in 2012 will also free up a large degree of bandwidth for new channels and services. The television spectrum is still used according to a plan originally prepared in the late 1950s, and Ofcom is currently looking at ways to maximise the use of the newly freed airwaves as part of its Digital Dividend Review.
Our friends across the channel have made no secret of their plans to supercede the now geriatric MPEG-2 specification with MPEG-4, which is the compression profile of choice in IPTV systems. It’s also roughly two to three times more efficient than its predecessor, and it allows a whole new world of quality and interactivity. What we need is RF bandwidth as a commodity, as we lack it so desperately now. Our emphasis should be on enabling the widest range of services to be deployed across the country. There are naturally technical caveats which complicate this (some considerably so), but the point is a greater one of direction and vision. We need more space (orders of magnitude more), better compression, and easier access. IP-based transmission, wide-area wireless return channel and 3G-style IMS architecture are all ambitious but exciting objectives.
Force ITV, C4 and Five to broadcast in the clear
We don’t have true competition in the digital satellite TV sector, and don’t listen to anyone who tells you anything else. Sky has contractual agreements with all the main public service broadcasters (except the BBC, who opened up its signals a few years ago) that require them to scramble their TV signal with their specific conditional access system (called ‘Videoguard’) so that only Sky subscribers are able to watch it. Sky's objective is to get its viewing cards and encryption system into every home, as this is the fundamental basis of its media power.
You may hear a lot of fluff that the encryption is there to allow broadcasters to geographically limit who sees what, because of the limited viewing rights they have obtained from content owners – French people aren’t allowed to hijack the signal and watch a movie that was only licensed for a British audience and vice versa. The truth is that when you have an audience the size of one of our public service broadcasters in a market as advanced and saturated as the UK, rights holders are the ones who stand to lose the most by trying to mandate those types of limits.
Sky’s FreeSat From Sky service is offered as a “lite” version of the service that a viewer can upgrade later to full premium content. You simply cannot build a satellite platform to rival the likes of Sky without all five main broadcasters; in fact there is no-one who will ever try. If these channels were broadcast “in the clear” (i.e. without encryption), anyone would be able to pick them up and competitors to Sky would spring up offering free satellite services, like FreeSat that the BBC and ITV are promoting. As Murdoch wins politicians’ elections, don’t expect to see any word from Ofcom too soon on this.
Clarify the regulation of PLC (HomePlug/powerline) technology
Powerline communication is an emerging technology that is proving itself to be easy, reliable, and extremely practical for the new era of digital home networks that are powered by broadband connections. It creates an Ethernet connection across existing electricity cabling in the home so connectivity is available through any normal AC power socket. They are the most effective way in the vast majority of homes of achieving a robust enough video connection to a set-top box for IPTV services that are delivered over copper phone lines.
Yet, you will rarely find 200Mbps PLC adaptors in the high street, and have to buy them online. This isn’t because the technology isn’t being adopted, it is because retailers are unsure of the laws governing their regulation, which makes them err on the safe side when doing their procurement. Apparently they generate “interference” and hence need to be policed – the BBC tells us they cause havoc with long wave radio signals. All electrical devices must confirm to international safety standards and wherever they are there will be a certain amount of RF/EM emission.
Ofcom needs to clarify this as soon as possible, as the use of these adaptors directly affects the viability of next-generation telecoms services (e.g. IPTV) in the home. Even if the answer seems obvious, an unambiguous briefing is needed that people can easily reference. No one has given a detailed explanation of this alleged spectrum pollution, but nonetheless if you want to buy a starter kit you will add them to your online shopping list, next to the Viagra.
Open up the WiMax spectrum free of charge
WiMax is just too complex, and the telecoms industry is crammed with start-ups and business plans for its use, particularly in rural areas where DSL penetration is low. Pipex owns the rights to the 3.5GHz band, and PCCW owns the 3.4GHz band. Many operators want to operate in the 5GHz range, and Ofcom is considering opening up the 3G band, 2.5GHz for non-3G use. To add to that, low-power domestic Wi-Fi equipment uses 2.4GHz, and there is more talk of playing with both 3.6GHz and 3.7GHz for long-haul services. Don’t feel bad if you don’t get it either.
Our government’s objective is allegedly keeping control of our finite spectrum assets, but when it comes down to it, it's all about cash, as the 3G debacle showed. The chancellor separated operators from over £20 billion pounds, leaving them to spend further on infrastructure that was depreciated by the time they started to see consumer uptake. WiMax is worse than that – the technology and market changes daily. Consortiums and specifications are delayed, argued over, re-ratified and changed while the rest of the world watches in frustration. The chaos of 3G would be disastrous for universal internet connectivity, not to mention the government’s plans the broadband-powered knowledge economy.
So here is a radical plan for WiMax – open up the spectrum free of charge and let operators innovate to their heart’s content. Make deployment cheap as chips. Licence operators with minimal fees and make sure guidelines are observed by all means, but let the industry grow by itself, organically. Make universal internet connectivity a truly free market and protect it from the interests of companies looking to be monopolists. We need to encourage 100 per cent broadband coverage for the good of our overall digital economy and present alternative means of accessing other global networks that is not based on premium-rate mobile telephony or legacy copper.
Give digital radio parental guidance ratings
Some may question this as a trivial and unnecessary act, and others may wonder why it was not done before. All modern digital television services now feature parental-control mechanisms, where content that is identified as adult unsuitable and out of bounds for children under 18. Cinema has enjoyed guidance ratings system for decades that provides an easy and useful way of limiting access to potentially harmful material by minors. Digital media gives us the ability to describe content and broadcast information that helps us control how we consume it.
Technology empowers us to make more informed choices and to extend ourselves as human beings. Media now can truly be the very epitome of free speech, but equally protect those who are vulnerable. Digital radio receivers (DAB) should regularly invoke pin-protection for whole radio stations and/or individual programs that are broadcast with an 18 age rating. DJs should be allowed to swear, curse, air offensive and dissenting opinions, and use adult material if their listeners enjoy them. Use of ratings should be transparent on all devices – car stereos, TVs and computers.
Clarify EU and UK regulation of IPTV content
The EU is preparing a legal framework for all its member countries to adopt regarding broadband television content, one that cascades into our legal system for usages as a yardstick in cases where court intervention is required. So far, early IPTV services in the UK have been “closed” systems that almost duplicate cable, using IP as a transmission medium across a private copper phone line network that never transgressed onto the internet. That pretty clearly identified it as broadcast television, leaving it to fall under conventional broadcasting law. The problem now is when IPTV networks cross the private network boundary and converge with the rather big public one – the internet. There has been no clear, unambiguous lead from Ofcom as of yet.
Consider the following scenario – a dodgy East European porn company decides to stream its rather tasteless content as a high quality PAL multicast video stream using a QoS-assured VPN tunnel over the internet. Thirteen year old male UK IPTV subscribers can add their own channels and, through their broadband-connected IP set-top box, subscribe to the channel. The question we face is, is that stream broadcast TV or internet content? If it is broadcast, how do we regulate it to ensure our TV networks aren’t used for criminal activities such as child abuse or terrorism? If it is internet content, where does policing of content end once it starts with video? How do we solve problems like video spam and control channels switching addresses to evade detection?
Once the wild west of the internet is allowed into our living rooms, the proverbial genie is very much out of the box and it’s going to be impossible to put it back in again. Who decides what we can and can’t watch? Why shouldn’t we be allowed to tune into any CCTV camera in the UK if we are monitored by them every day. Governments already monitor our voice calls, internet activity and private consumer data, but what about video calls and media consumption? With IP video, all the lines have to be redrawn as we can integrate, interoperate and converge as far as we like.
Reverse LLU economics to stimulate deployment in rural areas
There are around 6,000 BT phone exchanges in the UK, of which about 25 per cent (1,500 or so) are actually viable enough for local-loop unbundling by BT’s rivals, such as Easynet, Cable & Wireless and Carphone Warehouse. Co-locating equipment in exchanges and leasing DSLAM gear is relatively cost-effective, but when you get to running fiber backhaul, your plans come slightly unstuck as it's absurdly expensive. This makes consumer unbundling only practical in heavily-subscribed metropolitan areas, where it’s almost saturated already. B2B unbundling is more favourable, but only slightly so.
LLU was stimulated by Ofcom forcing BT Wholesale’s hand, which drastically cut prices and opened the market for others to make money from cutting them out of the loop. While IPStream resellers have only just got their long-awaited 8Mb “Max” service, LLU has given us the first truly high-speed broadband using ADSL2+ and shortly will take us one louder with VDSL2. Consumers are getting a great deal. Consumers in cities, that is. Anyone not in a city or large town isn’t.
Reversing the current economics would redress the network imbalance we have now. The cost of unbundling needs to be inversely proportional to the available customer base and their distance to the exchange – the more hostile the exchange, the cheaper it is to work with. The government doesn’t want to subsidise communities but wants to empower lovely things like tele-working and convergence. Let hungry commercial operators get in there and provide unique, localised services for those who need it most.
Licence ISPs like broadcasters
John Pluthero said what ISPs knew about customer service he could write on the back of a postage stamp and, unfortunately, he was right. Most operators are content never to talk to their customers, let alone try to deal with their problems. An alarmingly large number do not even give their contact details to their own subscribers or the public. This lack of transparency or accountability is deeply worrying as limited companies appear and disappear as quickly as their bank loan for the BT central or VISP account runs dry. As we move into a new era of converged communication services, this type of cavalier behaviour is just not acceptable.
Survivors of ISPs that have gone spectacularly bust with little or no warning (often with buckets of their own customers’ money) are mounting up in the same way rogue premium-rate telephony scam artists have. BT has no interest in cutting off these customers’ accounts as they are cash cows that pay for a world of useful luxuries. As long as they are paying their bills (or the likelihood is that they will), it is up to the rest of us to deal with their cynical approach to service provision. Ask any UK Online or Bulldog subscriber – provisioning, support and billing aren’t exactly a speciality.
All tiers of ISPS need to be fully licensed on a national register in exactly the same way as broadcasters are. Operators should need a licence and have the appropriate diligence conducted on their affairs every year before they are allowed to deal with small businesses and/or the general public (consider full MPF unbundling, carrier pre-selection and VoIP services where access to emergency services is a key issue). Guidelines, practices and regulation need to be mandated and enforced by a central authority that can tighten up the shortcomings of such a fast-moving industry. Understandably, no-one is going to like being regulated, but it desperately needs to be done.
Create a compulsory migration system for triple play
The MAC code migration system has never been compulsory, but arguably it should be. Some people believe it one of the core reasons the market for broadband has been so fluid in the UK. Competition is a fact of life and particularly vicious in telecoms, and consumers searching for better deals have had access to a vital mechanism by which they can tidily and easily shop between providers. The system is far from perfect, but the sentiment is there.
Triple play is very different indeed. Given the problems with full (MPF) unbundling, absolute chaos has ensued while operators get to grips with what BT has been fluent in for years. You can live without broadband if you have the backup of a 56k modem, but when the phone or TV goes down, it’s a very different story. As work on BT’s IP/IMS project (21CN) nears completion and all ISPs move to IP-based services, we enter a realm where services based on them need 100% uptime.
We need to build a form of “passport” system that enables customers to migrate between operators but leaves their services as intact as possible. The first incidental death caused by not being able to call for an ambulance because the line was down will be a very preventable tragedy. Consumers need maximum control over who maintains this information (their migration details) and what is done with it.
Clarify the rules for advertising in on-demand platforms
One of the fundamental rules of broadcasting in this country is that television programming and commercial advertising must be clearly identified and separated from one another. Direct and indirect product promotion that falls foul of this legislation is usually guilty of “undue prominence”. Licence fee-payers are thankfully spared the product placement carnage that plagues US networks with an independent BBC, despite the attempts of wily corporations (Ahem, Coke) to bend the rules with “sponsorships” and favours. Other public service broadcasters are admirably dignified.
Video on-demand puts unprecedented power in the hands of the great unwashed, which scares ad agencies, media buyers and broadcasters silly. Advertising is a forced activity – people don’t choose it unless it is editorially compelling or a burden to be suffered for greater benefit. Putting advertising into on-demand systems is very hard as it dilutes and negates their most attractive features. It’s difficult to force advertising on people you are trying to empower with choice. This leaves advertisers with relatively few options in a world where very little is certain in terms of what works and what doesn’t. Buying by the thousand views and inflating the figures are on their way out.
The clearest route for major advertisers to invest in making their advertising more like conventional TV programming – individual brands are now spending the leftovers of their marketing budget on running their own TV channels, producing mini soap operas for mobile phones and both bending and blurring the lines as much as they possibly can. We need clarity on just how much slack they are to be granted while we all adapt to these new technologies, and when the big stick is to be brought out for those that decide to take advantage of the situation and deliberately set out for confuse consumers for their own purposes (Where’s Lucky and/or ‘unlimited’ broadband on IPTV, anyone?).
Control monopolistic behaviour by content providers
Only one name needs to be mentioned when it comes to brutal monopolisation of content rights, Sky. Restricting it to only five of the six football rights “packages” was a cute gesture, but futile. Sky owns the football, the cricket, the best US TV series and the entire Pay TV movie release window in the UK. Nobody expects it or anyone else to be a charity, but its hold on content is so absurdly strong that it directly affects the wider industry because it is impossible for anyone to compete on an equal footing. Ask any football fan and they will tell you that they would gladly switch to another platform (e.g. BBC1), and the vast majority resent Sky’s monthly charges. Pubs really hate Sky.
News International owns most of the press, plenty of world TV networks and a movie studio or two. Naturally, they cross-promote each other and favour each other when it comes to trading rights to content. Their pockets are very, very deep and their influence deeper still, meaning that coercion is more common than fairness, as all cold-blooded businesspeople would understand. The trouble is that those who suffer the most are the ordinary day to day consumers who are pay subscription fees but have little or no choice as there is no market competition.
Behaviour that acts directly against a consumer’s interest needs to be stamped on, even if it damages a company’s commercial ambitions. Wherever there is money, power or influence, it will be sought after and abused. No one media entity should be allowed to obtain or exploit more than half (50 per cent) of the viewing rights for any genre of content. That means Sky should not be allowed to exclusively control more than three football rights bundles (or cricket), or half the movies that are released for pay TV platforms in the UK. Exclusivity is important, determines the fate of businesses and forms the basis of a large amount of commercial deals, but it must be closely controlled.
None of these things are out of the regulator’s reach, nor are they impractical or damaging. The key is will – the will to move beyond the warm comfort zone we have all become accustomed to, so we can be agile enough to adapt to changes more effectively than if we were just waiting to dry off after the proverbial wave has crashed over us. No one will dispute that these are extremely challenging goals and suggestions that would cause shockwaves, but it's shockwaves we want – a regulator brave enough to roll up its sleeves, bare its teeth, and lead from the front. We have a cutesy golden retriever, when we need a greyhound.
If even two or three of these suggestions were implemented, the implications would stimulate both the imagination and the market ecosystem they are a part of. The question we need to ask ourselves is what kind of a world we want to live in, and where we want our country to be? Our Molotov cocktail of answers is just waiting for a Zippo lighter to make it happen.
Digital TX Limited is a London-based provider of technology and consultancy solutions for interactive digital television and broadband media. Alexander Cameron can be reached at email@example.com.
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