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UK leaves door open for public NGN investment

30 января 2009

The U.K. government on Thursday suggested that public funds could still be use to drive the future extension of next-generation network (NGN) coverage.

In its Digital Britain Interim Report, communications minister Lord Carter said the government will assess private investment in next-generation networks from the likes of BT and Virgin Media based on rollout and take-up, and implement contingency measures if the market fails to deliver.

"On the fixed side they've left the option open for potential government support," said Matt Yardley, a partner at Analysys Mason.

He told Total Telecom that Virgin Media and BT's NGN rollout plans should see them providing access to about half the U.K. population between them.

Beyond that, it will be up to the network providers and the government to assess the cost case for extending coverage any further, he said.

"Our own research on rolling out a
U.K. fibre network has shown that the cost remains constant for the first 60% of the population," he said.

"BT has said that in the right regulatory framework it will invest £1.5 billion in a next-generation network that would reach roughly 40% of the population.
If they can see a cost case for 40% then we believe it's possible for them to go further to 60%," he commented.

The government also outlined plans for a Universal Service Commitment, which would see minimum broadband speeds of two megabits per second extended to every home in the

"We were very surprised that the government is only advocating a broadband network speed of 2 Mbps by 2012," said Richard Heap, head of telecoms, at accountancy firm BDO Stoy Hayward, in a statement.

"Given that a number of other ISPs offer speeds of up to 50 Mbps, this is akin to a snail's pace and lacks ambition," he commented.

Yardley disagreed, explaining that the cost implications are quite high for adding an extra megabyte of capacity, especially to rural and remote areas.

"Raising the minimum speed to 2 Mbps can still support a good iPlayer experience, and a decent TV stream," he said.

"It's about taking what we're capable of delivering now, and making sure that it's delivered to everyone," he added.

In addition, the government sanctioned the implementation of network traffic management by Internet service providers in a move that would end network neutrality.

"ISPs might in future wish to offer guaranteed service levels to content providers in exchange for increased fees.
In turn this could lead to differentiation of offers and promote investment in higher-speed access networks," said the report.

Yardley said the proposals still mean consumers have access to the same content, but would pay a premium for an enhanced service.

"It becomes complicated when you get into ISPs offering exclusive content, but in
Europe we already have the regulations and competition authorities in place to deal with those situations," he said.

"I think Lord Carter's probably done the right thing there," he concluded.

Источник: Total Telecom

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