22 January 2015
Ofcom Infrastructure Report 2014
Ofcom’s Infrastructure Report 2014, published on 8th December 2014, is the second full
infrastructure report produced by Ofcom (following the first published in November 2011)
analysing the present state of communications infrastructure within the UK. It looks at the
coverage, performance and capacity of fixed broadband and telephony networks; mobile data and
voice networks, Wi-Fi; and broadcast and radio networks. This Research brief provides a short
summary of Ofcom’s report, focusing in particular on the availability and take up of broadband
services and the policy implications identified by Ofcom in relation to these issues.
Availability/coverage of broadband infrastructure
Ofcom’s report recognises that there is still a great deal to do in improving broadband and mobile
availability and quality of service issues for both residential consumers and particularly small and
medium sized enterprises (SMEs) across the UK.
Although the report states that overall availability and quality of broadband services is getting
better with average download speeds currently at 23Mbit/s, it also identifies that broadband
speeds vary widely.
The Government’s Universal Service Commitment (USC) aims for universal availability of at least
2Mbit/s broadband and according to the report 3% of UK premises still fall below this availability
threshold. However a typical household currently requires a download speed of around 10Mbit/s
at least and the report indicates that 15% of UK households are estimated not to receive this level
of service.
The deployment of superfast broadband since 2009 has delivered download speeds of 30Mbit/s
and this is now available to 75% of premises in the UK. However, superfast broadband coverage
is much lower in rural areas at 22%. Even in urban areas there are gaps in superfast broadband
coverage such as Westminster with only 47% coverage and Tower Hamlets with 59%.
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The Government’s continued aim is to deliver such superfast broadband speeds to 95% of UK
premises by 2017.
Take-up of services
Take-up of fixed broadband services stands at 73% of UK premises and take-up of superfast
broadband services stands at 21% of UK premises.
Table: Take-up of broadband by nation, % of premises
England
Scotland
Wales
Northern
Ireland
UK
Fixed
Broadband
73%
73%
69%
70%
Superfast
Broadband
22%
16%
13%
22%
73%
21%
Challenges to achieving universal coverage of superfast broadband
The report identified four main challenges to the successful roll-out of superfast broadband, as
follows:
a) Rural roll-out
The report recognises that it is more technically complex and expensive to roll-out broadband in
rural areas with low population density, particularly as the Fibre to the Cabinet (FTTC) model
does not always deliver superfast broadband speeds due to the connection from the cabinet
being too distant to support a 30Mbit/s speed. The report indicates that the Government and
industry are looking at a range of technological options to provide broadband to the ‘final 5%’ of
UK premises.
b) Urban not-spots
Some city areas, including parts of central London, suffer from poor superfast broadband
coverage. This is usually caused when there is no street cabinet to upgrade, as the customer has
a direct connection to the local exchange1. Alternative commercial solutions are available
including wireless but the industry is looking at ways to take fibre closer to the customer where
there is no cabinet.
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These direct connections are referred to as ‘exchange-only lines’
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c) SME availability
The report found that while SMEs make a substantial contribution to the economy they have a
lower proportion of access to superfast broadband (56%) compared to UK premises as a whole
(75%). Ofcom has already announced a major programme of work to assess the drivers and
barriers of connectivity for SMEs and calculating those SMEs without superfast broadband
coverage and with no other relatively low cost and high bandwidth options.
d) Ultrafast broadband
The report also considers what future networks are needed to support speeds of a gigabit per
second (1Gbit/s) or ultrafast broadband. The UK has some early deployments of ultrafast
broadband and the report says more consideration is needed on how to build on this.
Technological developments to achieve better coverage and faster speeds
The report identifies two major options for upgrading networks. These are categorised as either
‘evolutionary’ or ‘revolutionary’.
a) The evolutionary route is based on a further round of investment to upgrade the existing
hybrid copper-fibre access networks. This is achieved by two main technology options:
‘G.Fast’ – this utilises present copper networks and can deliver very high speeds over short
lengths up to 800Mbit/s, but speeds above 1Gbit/s can be achieved. A typical installation involves
placing new equipment at distribution points close to the customer’s premises, for example on
street telephone poles, and then connecting by fibre to the core network.
Cable – such TV networks through a Data Over Cable Service Interface Specification (DOCSIS)
can also deliver high speeds in excess of 1Gbit/s.
b) The revolutionary route connects fibre to every home and every business through Fibre to the
Premises (FTTP) which the CWU has argued that the Government should encourage and support
through investment in if the UK is to remain economically competitive internationally. For BT in
the deployment of FTTP there are two main technology options:
• Passive Optical Networks - removes the need for active electronics in the access network but
are fundamentally ‘shared’ amongst a number of end users so limiting speed.
• Point-to-point fibre networks - offer dedicated connections and higher speeds but need active
electronics in the access network and more fibre so increasing costs.
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BT already offers ‘fibre on demand’ alongside its FTTC network, but has seen very limited take-up
so far, and there have been smaller scale commercial developments such as CityFibre investing
in various UK cities and a trial deployment in York. Cable networks such as Virgin Media’s are
using cable-specific fibre technologies such as Radio Frequencies over Glass (RFOG) and
DOCSIS over Ethernet Passive Optical Networks (DPoE) by exploiting the greater bandwidth
available. In addition 5G mobile technology may open up new options for providing ultrafast
broadband connectivity.
The key policy implications
The main policy challenges identified in this report are as follows:
a) Ensuring inclusion through universal availability
The Government’s current USC for broadband is that every household should have access to
broadband speeds of at least 2Mbit/s. The report states that this was set in 2009 and may now be
insufficient. It suggests that it may now be time to review the policy, as customer expectations of
broadband rise along with the availability and take-up of faster broadband. The report states that
publicly funded deployment of superfast broadband might mean that speeds of 30Mbit/s are
eventually available universally. If not, Ofcom suggests that more detailed work may be needed
on whether the basic commitment should be increased. The CWU has advocated for such an
increase and we have continued to call on the Government over several years to replace its USC
for broadband with a statutory universal service obligation.
The report also states that extending mobile coverage beyond current levels will require
continued public policy intervention and that on top of the £150m in new infrastructure other policy
measures to increase coverage and address partial not-spots should be considered such as
national roaming, passive infrastructure sharing and a multi-operator Mobile Virtual Network
Operator.
b) Deployment of new technologies to the mass market
The report states that in order to address the challenges of superfast broadband roll-out with
further deployment continued public intervention will be required (especially to reach the ‘final 5%’
and to improve SME coverage) or at the very least regulatory policy amendments will be needed
(such as changes to the Electronic Communication Code and planning rules). The CWU has
called for both such measures on many occasions previously.
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c) Understanding options and defining an ambition for future infrastructure investment
The report indicates that in utilising the technological developments available they should be
considered thoroughly and quickly in order to understand the likely timescales of demand and
supply, as well as the delivery models which will best deliver value for money. Many of these
upgrades can be led by the market, building incrementally on investments already made in
response to demand, but the report also recognises that there are parts of the UK that are not
fully served by the market and some services which are not provided to all by the market. In such
situations, the report states, Ofcom or the Government may intervene to further consumer and
citizen interests.
The report also identifies that the broadband quality of experience suggests that broadband
performance is influenced by a much wider set of issues, which the CWU has drawn attention to
before, than simply the speed of the access network. The report lists such issued as upload
speed which is currently 3 Mbit/s in the UK, traffic management in terms of transparency and net
neutrality, and resilience and security in terms of both network outages and cyber-attacks.
CWU Research
22 January 2015
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