Memorandum submitted by Firstnet Services
Ltd (S45)
INTRODUCTION
Further to the inquiry by the Environment, Food
and Rural Affairs Committee into the provision of broadband in
rural areas of England, Firstnet Services Ltd is pleased responding
to the points requested:
— What demand there is for broadband
in rural communities;
— What provision already exists, and
what is planned;
— What obstacles there are to the provision
of broadband in rural areas;
— What roles are played by Defra and
the Countryside Agency in relation to broadband, and what their
relationship is with the UK Broadband Taskforce and those in Regional
Development Agencies dealing with broadband; and
— What alternatives to broadband exist
or are being developed that might be of particular relevance to
rural areas.
DEMAND
It is Firstnet's belief that everyone should
have the right of access to broadband Internet services.
CURRENT POSITIONING
The Government's stated aim is to be in a position
of ". . . having the most extensive and competitive broadband
market in the G7 by 2005 . . .".
The current market position of broadband (from
Oftel) is:
— take-up of new broadband subscriptions
has risen to almost 30,000 per week, and the UK now has more than
1.4 million broadband users
— one in ten UK homes with internet
access use broadband services
— the average household spends around
nine hours a week online
— nine out of ten households are satisfied
with the service they get from their existing internet service
provider
This equates to approximately 63% of homes in
the UK having access to broadband services. However, of this coverage,
only 42% of homes have Internet access and 67% of SMEs.
Two key observations arise from these figures:
1. A vast portion of the country remains
inaccessible to broadband services.
2. Even though service is available, take-up
hasn't matched the availability.
ACCESSIBILITY
Accessibility can be directly attributed to:
— suitable network availability; and
From a network provider's perspective, this
issue is fundamentally economic. A network is optimised by large
user subscription—cost of provision balanced against revenues
received. The fewer users, the higher the deployment and subsequent
maintenance costs.
This scenario is exacerbated with a non-incumbent
provider, since infrastructure deployment is new and offset against
a business plan with identified revenues and therefore returns.
An incumbent has the advantage that a previously deployed infrastructure
can be further leveraged by ancillary services, ie the copper
line from the exchange can be shared by additional services, such
as the same telephone line is `shared' by an ADSL service.
In December 2001, it was noted by the Broadband
Stakeholder Group that the stock market slump had decreased the
capital available for telecoms companies to invest in broadband
infrastructure. This market position has only deepened, seeing
a number of prominent providers either disappearing from the market,
or severely hamstrung by their financial position.
If suitable network cannot be deployed—or
existing infrastructure enhanced—alternative networking
solutions can "not" be deployed?. However, the cost
of the communications infrastructure and the associated equipment
increases with the complexity of the transmission methodology.
Hence, the end user cost is proportionately larger with non-"traditional"
networking.
Source: PA Consulting Group
SERVICE TAKE-UP
In a July 2002 Parliamentary Postnote on Broadband
Internet Access, it was summarised that ". . . issues need
to be addressed in two key areas before the Governments targets
for the most extensive market in the G7 is likely to be met:
— increasing take-up where broadband
is available; and
— extending coverage to the third of
households which do not have access to affordable broadband services"
Service take-up can be considered from two perspectives:
1. Internet usage. The Internet is still
not being used to the maximum of it's potential, even in its current
form. This can be seen as both a content and education issue.
2. Network Deployment. Without sufficient
service take-up, network deployment is not substantiated. An example
of this is the BT exchange enabling figures. Even though the volumes
for enabling an exchange for DSL are reached, the subsequent market
take-up of the service does not correlate with the original figures.
This creates a catch 22 scenario—the users
need a reason (and education) to use the Internet; network providers
need a user base to justify service deployment.
FIRSTNET'S
BROADBAND PROVISIONING
MODEL
Firstnet has a unique opportunity to address
the broadband market place by using its Fixed Wireless Access
network infrastructure, using licensed spectrum bands 3.6GHz to
4.2GHz.
From the above sections, it should be seen that
this offers the ability for a comparably low cost distribution
model, but with significant advantages over traditional wired
DSL networks—service coverage from a Point of Presence can
be up to 11km, compared to 3-5km from a wired DSLAM exchange.
It is important to note that other wireless
networks in the UK who are using 2.4GHz unlicensed frequency are
already experiencing problems with interference from other devices
and networks using the same frequencies, eg other 2.4GHz networks,
CCTV Cameras, Wi-Fi equipment and in fact any other device that
uses radio transmission in the public band.
Using 2.4GHz for commercial broadband presents
problems with intrusion. Although data can be encrypted across
the network, data security is not the only issue. With the necessary
equipment readily available from almost any computer related outlet,
and instructions on scanning public networks rife on the Internet,
network integrity is regularly compromised on 2.4GHz networks
and can often lead to downtime whilst rogue units are detected.
Whilst gaining unauthorised access to a network is illegal; scanning
and associating with 2.4GHz base stations is not. This quite often
results in serious performance problems across the effected site.
Unfortunately from a legal standpoint nothing can be done to address
this when using a public band such as 2.4GHz.
FIXED WIRELESS
CONSIDERATIONS
Fixed Broadband Wireless offers considerable
benefits when delivering connectivity en-masse:
SPEED OF
DEPLOYMENT
The timescale from initial concept to a deliverable
service is many times shorter than traditional options. Typically
a base station can be deployed and service provided within four
weeks.
FLEXIBILITY
Perhaps one of the key advantages of wireless
is that end users can be offered a variety of tariffs. This will
cater for the larger SME businesses whilst also providing an ADSL-type
consumer tariff from the same base station, using identical equipment.
Speeds and availability can be remotely configured in order that
a connection to the network can grow (or shrink) with each individual
business need. Additionally, solutions such as temporary installations
are viable.
INDEPENDENCE
Implementation of a Fixed Wireless network allows
for the local loop to fall within the control of the operator
of such a network. This eradicates the dependence on a third-party
supplier who will often limit use of the infrastructure. The licence
operated by Firstnet allows any traffic type to be carried, therefore
there are no limitations of service provision.
INVESTMENT PROTECTION
Once base station sites are acquired, new technology
becomes simple to introduce into any fixed wireless network. Upgrading
services and bandwidth can also be implemented organically. The
network is IP based and this allows for the introduction of new
services from a central site that can be rolled out to users across
the dedicated infrastructure.
MANAGEABILITY
A fixed wireless network will provide considerable
management options, with the operator having complete visibility
and control over each end user. All subscriber units (SUs) are
SNMP manageable, allowing dynamic and complete end to end service
management.
A Fixed Wireless Network can have serious disadvantage
if provided on the unlicensed spectrum at 2.4GHz or 5GHz. Firstnet
has an exclusive UK and Northern Ireland wide licence to provide
these services on a unique band.
SECURITY
A fixed wireless network will provide enhanced
security of access. Each network device can only operate within
the uniquely defined spectrum provided by Firstnet. In addition
all network access is authenticated through a Remote Access System
to provide a screening layer to the network which will not allow
unauthorised access.
FIRSTNET AND
THE SPECTRUM
"LICENSE"
The "licence" operated by Firstnet
Services was previously offered by Liberty Broadband Ltd (formally
Tele2 UK Ltd). The fixed wireless network in the UK has been operational
in the UK since 1997. The network was originally deployed in the
Thames Valley on a radio communications testing and development
licence.
In July 2000 a UK wide licence was granted.
Currently Firstnet has networks in the following
areas:
— South (Reading, Bracknell, Slough,
Uxbridge, Crystal Palace, Hillingdon, Heathrow, Windsor, Basingstoke,
Wokingham, Guildford, Tilehurst, London, Bristol).
— Midlands (Nottingham, Leicester,
Coventry, Birmingham, Derby).
— North (Leeds, Bradford, Sheffield,
Manchester, York).
— Scotland (Glasgow, Edinburgh).
The majority of Firstnet customers are SME businesses
and in total the network provides permanent broadband services
for approximately 4,500 customers.
SERVICE DEVELOPMENTS
Firstnet is constantly striving to provide differentiators
to the services deployed. Within the near future, the following
services are planned for deployment:
1. Voice Over IP (VOIP)
Firstnet would like to deploy VOIP gateway devices
to the networked users, allowing local calls to be routed by either
of the available connections, ie is the Internet connection available,
in which case route voice traffic via this—if not, route
traffic to the attached PSTN line.
Differing services and a range of solutions
are planned to be deployed to cover the differing connectivity
issues from consumer to business.
2. Ancillary Services
A range of value added services are planned
to be deployed across the Wireless Network—providing an
enhanced service tailored to the customer needs, eg:
— Thin Client Applications (ASP).
— Distributed Applications, eg Microsoft
Office Suite.
NETWORK GROWTH
Firstnet has strategic plans for network growth
and broadband deployment. Firstnet approaches business with traditional
values and principles. We are very aware of the current market
climate and the failures and problems of other carriers. Hence
the network will be extended, but only when we can be certain
of covering infrastructure deployment costs.
Our business development path therefore moulds
itself with the initial problems identified with broadband development:
Firstnet is seeking a single solution to these
two issues—local sponsorship to Internet usage.
A sponsor will work with a community to provide
both education and content to a user base. In essence this becomes
a Community of Interest Network, or COIN. By providing service
at this local level, revenues can be received for the services
provided, but with much more value for money association by the
user.
In return for the ability to provide services
at this level, Firstnet look for the local sponsor to contribute
to the costs of deployment. In essence, this becomes a Franchise
Model.
Many xSP's and other solutions sales providers
would like the ability to offer services to a known market place
to provide a "complete" solution and to own the entire
customer experience. However, the problem most service providers
encounter is the ability to reach the customer—the last
mile still being owned by either the incumbent operator, or a
cable franchise.
To avoid this scenario, some have tried deploying
wireless services using the public frequencies—2.4GHz and
5GHz. The current problems with this deployment type—distance
of coverage, security, billing, quality of service, bandwidth
control, user control, etc, etc are an active dissuader.
The alternative is to provide a re-sold local
loop, ie IPStream from BT Wholesale to be able to define proprietary
service parameters. However, the cost of entry and cost of service
wrap are still relatively prohibitive and are only alleviated
by critical mass. This option is again limited to the exchanges
that BT has DSL enabled.
The situation is exacerbated by the fact that
as the current regulation stands, to provide public services to
over twenty end users requires the ownership of a PTO licence.
Therefore even though the public frequencies are not regulated—the
services provided over them are.
NETWORK EXPANSION
A Fixed Wireless network topology is a traditional
hub and spoke "meshed" network, the hub being the transmission
point. To provide internet connectivity to the spokes of the hub,
means connecting the hub to the internet. In principle this is
a circuit, whether physical, or wireless, connecting the hub to
the Firstnet core network, where we can gateway user traffic to
the Internet.
With either physical, or wireless circuits,
there is a cost dependency based on distance. The further the
transmission point is from the core network, the higher the cost
of the "backhaul" circuit.
Access to suitable transmission mediums is also
an issue. The aggregated demand from a hub/spoke network will
determine the required amount of bandwidth required to provide
the `path' to the Internet from the hub.
Currently an "average" broadband connection
is provided at 512kbps. Providing a contention ration of 50:1
(the BT average for home users) requires a backhaul circuit of
20M to accommodate an reasonable throughput to 50 users.
Access to this amount of bandwidth is extremely
expensive over distance. If the A and B points of the connection
are within 25km and supported by appropriate exchanges, this bandwidth
can be provided by LAN Extension Services at either 10M, or 100M.
However, this technology is only really available in Metropolitan
areas.
To provide this amount of bandwidth outside
a Metropolitan area requires the provision of multiple 2Mbps circuits—which
becomes prohibitively expensive to provide.
Competition for these services is insufficient
to be able to reduce these prices. Alternate carriers to the incumbents
have traditionally kept their networks within and interconnecting
major populaces, to maximise the potential return on investment
by targeting businesses.
This cost of networking, is therefore the major
inhibitor to network growth.
SUMMARY
Firstnet recognises that:
— there is a significant percentage
of the population that do not have access to broadband Internet
access;
— due to commercial considerations,
this will not be rapidly addressed by the majority of telecoms
providers, due to an inability to economically extend their networks
to provide service to these areas;
— alternate networking technologies,
eg satellite are end user cost prohibitive for a general service
uptake; and
— additional services and education
are required to incentivise usage and acceptance.
Firstnet can provide:
— a widely deployable networking model
for broadband distribution;
— a replicable, scaleable solution
using tried and tested technology; and
— a partnership model to allow local
service providers access to a simple last mile solution.
Firstnet's issues to deployment are:
— locating suitable partners to sponsor
network expansion;
— providing backhaul connectivity at
an appropriate bandwidth for an appropriate rate; and
— cost of radio spectrum licence. The
current licence is provided to Firstnet at approx. £850,000
per annum. Proportionate to Firstnet's current wireless user base,
this equates to a monthly charge of £28.33 per user. This
is without apportioning any networking provision to a user base.
28 February 2003
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