Regulatory Review: Broadband Britain–A Plan In Motion

by Gerry Oberst

In February 2001, U.K. officials formally published an action plan to help drive forward national broadband networks. Their report, entitled “U.K. Online: The Broadband Future,” recognized that these networks are likely to be a significant factor in determining national competitiveness in the coming years.

The report failed, however, to account sufficiently for the role of satellite networks in this broadband future. Thus, a satellite working group of the U.K. electronics industry developed a detailed response and in June this year recommended a series of actions the U.K. government should take to obtain the full potential of satellite broadband innovations.

The U.K. report was a result of the U.K. government’s effort to designate an “e-Envoy” and “e-Minister” with responsibility for the broadband action plan. What the United Kingdom really meant by broadband is new interactive services, not just one-way digital service. Otherwise, the U.K. broadband report could hardly ignore digital satellite networks, because the early introduction of digital television in the United Kingdom has been led by satellite, and 80 percent of that market is still provided via satellite.

However, the “U.K. Online” report stretches to downplay satellite contributions. Its estimates of the service pattern for access to even “midband access”–up to 2 Mbps–assumed highly aggressive rollouts for DSL, cable modems and wireless access by 2004, but nothing–zero–for satellite access. Sprinkled lightly in the text are some references to satellite technology, but the report claimed the cost of terminal equipment could threaten the viability of the service.

The Federation of the Electronics Industry (FEI) in the United Kingdom did not accept this limited perspective. The FEI, which labels itself the “Voice of U.K. Electronics,” issued a pointed reply through its satellite working group. The FEI said it was “disappointed” that the U.K. paper did not “present the full potential of satellite access services.” The FEI instead advocated satellite as a way to deliver a significant component of “Broadband Britain,” and issued a list of measures for the U.K. government to take to remove existing barriers to satellite deployment.

The FEI refuted several notions that ran throughout the “U.K. Online” paper. First, FEI pointed out that few of the most popular information technology services for the foreseeable future require symmetric bandwidth that is not provided by satellite. Satellite systems already deliver broadband data streams to residential terminals, with asymmetric return channels that support most applications.

Second, satellite service costs are largely driven by bandwidth considerations, rather than the cost of terminal equipment, and costs can be achieved similar to the DSL services about which the “U.K. Online” paper was so optimistic. If costs are high, in the United Kingdom it could be a function of the licensing approach that has been chosen, not by the equipment itself.

And third, the FEI paper pointed to recent expert predictions on the demand for satellite access services, with estimates that satellite broadband subscribers are growing exponentially and satellites will serve over two million Internet terminals in Europe by 2005. In light of these statistics, it is strange to refer back to the “U.K. Online” paper that assumes there will be no satellite midband service in the country.

FEI acknowledges there are barriers both real and perceived to the deployment of satellite access services. Among these are antenna planning regulations, uncertainty over the terrestrial rollout, terminal licensing requirements, space segment costs and lack of common standards. One of the barriers is product perception and market antipathy toward satellite services, and the FEI said that a more balanced statement of satellite capabilities by the government in documents such as “U.K. Online” would be helpful.

The FEI suggested how the government could play a key role in breaking down these barriers. Proposed actions for the government, in partnership with industry, included improving the market perception of satellite services, reviewing U.K. planning procedures for satellite dishes, providing more publicity on the status of terrestrial broadband so users can make informed decisions, reviewing licensing requirements, protecting appropriate spectrum, encouraging good pricing for access spectrum, and considering a specific government and industry-wide program to deliver broadband satellite services.

Only a short time ago, the British National Space Center noted that “one of the major growth areas for satellite telecommunications over the next decade will be the provision of wideband communications.” The officials who have been worrying about “U.K. Online” might want to take a further sounding of the industry and their own colleagues in order to form a more balanced notion of the contribution of the satellite industry to the future growth of broadband applications.

The satellite industry has an important obligation as well, to continue to educate policymakers about the advantages satellite networks can provide. Far too many policymakers are prepared to accept the notion that satellite has no role in their broadband industrial planning, a perspective that we need to correct.

Gerry Oberst is a partner in the Brussels office of the Hogan & Hartson law firm. His email address is [email protected].