BT's Gigabit Plans & the UK's Digital Abyss

When you're a national incumbent like BT, the problem with launching gigabit-speed services in a few areas is that it makes your other broadband products look positively medieval.

The UK service provider this week cranked up the high-speed connectivity in parts of the country where it has already rolled out a fiber-to-the-premises (FTTP) network. That means about 327,000 homes and businesses will be able to access services of up to 1 Gbit/s, taking many into the gigabit era for the first time ever.

This is quite a breakthrough for a company that only ten years ago believed 20 Mbit/s over ADSL2+, an ageing copper-based technology, would be sufficient for the foreseeable future. What's more, those gigabit-speed services will eventually be made available to about 2 million UK premises -- the number that BT plans to cover using FTTP by 2020.

Far from silencing BT's critics, however, the scheme could aggravate them even more. Outside the FTTP footprint, BT's highest-speed broadband service for residential customers and small and medium-sized enterprises is advertised at 76 Mbit/s. Before this week's boost, FTTP customers were getting a maximum of 330 Mbit/s. That digital divide has now become a digital abyss.

BT is working hard to make improvements elsewhere. Using the performance-enhancing G.fast technology, it aims to jack up the speeds on copper-based networks to at least 300 Mbit/s. That particular rollout is targeting about 10 million premises by 2020. (See Huawei, Nokia Land Initial G.fast Deals at BT's Openreach.)

As there are more than 25 million homes in the UK, however, this will still leave more than half the country in the broadband lurch, so to speak. And in more remote communities, the outdated technologies in use make travel on the information superhighway a bit like taking a pushbike on to the M1.

These communities are arguably the ones most in need of a high-speed fix -- ill-served as many are by transport and other modern infrastructure.

No one in the industry underestimates the difficulty of providing ultra-fast broadband services in such areas. Yet many are annoyed that FTTP does not figure more prominently in BT's plans. France's Orange has recently said that gigabit-speed services will be "common" in its European markets in 2018. In the UK, by contrast, gigabit will be for the minority. (See Orange Sticks to High-Fiber Diet.)

The rollout of gigabit broadband access networks is spreading. Find out what's happening where in our dedicated Gigabit Cities content channel here on Light Reading.

BT's big problem here is possibly its philosophical stance on high-speed connectivity. Like other European incumbents sweating their copper assets (Germany's Deutsche Telekom, most notably), it has previously tried playing down the need for gigabit-speed services. In many ways, that seems reasonable. Even with higher-quality video conferencing and the growing volume of WiFi-enabled devices, 76 Mbit/s seems perfectly adequate for the average small business. But you don't launch a service without spotting a need. "Is that need restricted to areas where BT can more easily roll out networks?" the operator's opponents may pointedly enquire.

The real question, of course, is whether BT should be using its growing profits to fund infrastructure improvements on a much bigger scale. Like any private sector player, BT feels its main responsibility is to shareholders. Recognizing BT's position as the former state-owned monopoly provider, netizens believe it should be acting in the national interest much more than it does.

BT is already heavily regulated and required to meet certain universal service commitments. But over the last year and a half, a number of its wholesale customers have been urging regulators to break it up. Separating the retail business from Openreach, the access networks division, would spur competition and investment, they say. BT, predictably enough, argues this "structural separation" would have the opposite effect. (See BT, Ofcom & the Battle of Britain.)

So while BT continues to pump up the broadband in specific areas, it will continue to inflame critics worried that the UK is becoming a society of digital haves and have-nots. And arguments that the majority have lost out to the privileged few are touching a nerve these days. (See Trump's Impact on Telecom Still Uncertain.)

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

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