It's time for the government to cut its ties to Openreach and look to the skies

Scottish Business Insider May 2021

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BACK AT THE TURN of the 21st century, I was the ‘expert advisor’ to a committee of the Scottish Parliament reviewing broadband provision in Scotland. We wrestled then with whether we should mandate a 10Mb minimum service.

I never dreamed that twenty years later the availability of high-speed broadband would still be an issue. Despite today’s need for Zoom business calls or Netflix viewing, many people in internet ‘black spots’ are struggling to get 10Mb even today, leaving them unable to undertake everyday online tasks.

This is despite BT’s infrastructure division, Openreach – who have the monopoly of most of the UK’s telecom network – receiving large slugs of Government funding over the last 20 years. The most recent of these, £5bn, was pledged last December, but it still seems to be beyond Openreach to install a comprehensive fibre network to every premise. A previous target, originally 100% of homes by 2025, has now been watered down to 83%.

Instead BT chose to buy and broadcast expensive sports for wealthy metropolitan customers – rather than invest in extending broadband to everyone.

When people talk about future provision of broadband, there has been much talk of the benefits of 5G cellular technology and mobile operators also have their ‘begging bowl’ out for Government funding to help them build out their networks. Admittedly 5G delivers potentially enormous capacity to provide very high bandwidth and low latency over cellular telephony, but along with that capacity comes huge limitations.

To deliver high bandwidth, 5G technology uses much higher radio frequencies, and with those comes reduced ability to transmit over distance, or through any obstacles such as walls and structures. For 5G to work well, it will require a massive increase in the number of base stations. Most modern office blocks will also need to install 5G repeaters to enable the signals to reach reasonable coverage within their buildings.

It will take a long time for new 5G networks to be constructed and inevitably will first concentrate on the lower frequency channels to support self-driving vehicles on major trunk roads, one of the key applications driving 5G technology. So high speed broadband over 5G to remote premises will remain a distant dream for many years.

One solution to universal high-speed broadband everywhere, which is not heavily publicised, perhaps because it is not provided by an incumbent provider looking for a government handout, is to look ‘up’, and to the world’s two richest men.

A large constellation of connected satellites in low earth orbit (LEO) is capable of massive amounts of bandwidth delivered at low latency to anywhere on the planet. A small antenna can lock on to the nearest satellite as it passes over, and there will always be another coming after it.

Elon Musk’s SpaceX has already launched 1,000 LEO satellites for his Starlink system and plans to take this to 12,000. Meanwhile Jeff Bezos aims to spend $10bn to build his Kuiper competitor system of 3,236 satellites.

And there are others, including OneWeb, now 45% owned by the UK Government, which also promises fast internet service anywhere.

But given both Elon Musk and Jeff Bezos, arguably the two most competitive men on the planet, who both typically employ razor-thin margins to win market share, it would be risky to assume that anyone will make much money for a while – which is great news for the customer.

Government should stop subsidising Openreach. High-speed broadband, at a very competitive price, will soon come down from the sky.

It’s finally time to ‘cut the cord’