Memorandum submitted by the Internet Services
The Internet Services Providers' Association
(ISPA) UK is the trade association for companies involved in the
provision of Internet Services in the UK. ISPA was founded in
1995, and seeks to actively represent and promote the interests
of businesses involved in all aspects of the UK Internet industry.
ISPA membership includes small, medium and large
Internet service providers (ISPs), cable companies, web design
and hosting companies and a variety of other organisations. ISPA
currently has over 200 members, representing more than 95%
of the UK Internet access market by volume.
ISPA was a founding member of EuroISPA, the
European Internet Service Providers Association based in Brussels,
which is the largest umbrella organisation of ISPs globally.
ISPA welcomes the opportunity to respond to
the Committee's inquiry into broadband speed. As outlined in the
Digital Britain Report, the Internet is central to the
UK economy and society and as more public services are being delivered
online, the importance of broadband cannot be underestimated.
ISPA is pleased that the Government recognises broadband as an
essential utility and welcomes Parliament's continued interest
in the area.
Is the target for universal access to broadband
at a speed of 2Mb/s by 2012 ambitious enough?
ISPA believes that any Government action that
encourages use of the Internet is a positive step. Whilst the
majority of the UK has access to broadband with speeds above 2Mbps,
as recognized in Digital Britain, more than one in ten
households do not. Therefore, Government efforts to bridge the
Digital Divide and increase the level of broadband use are welcomed.
It is worth highlighting that whilst Government action is welcome
to address the minority who do not currently benefit, the UK enjoys
high broadband penetration brought about by a highly competitive
The specific target of 2Mbps by 2012 represents
a good starting point but there should be a medium to long-term
strategy in place to achieve higher speeds. Without this long-term
goal networks will not be built to support these speeds and the
digital divide will widen. The market is already delivering faster
speeds to meet users' demands. Therefore, along with establishing
and reviewing the Commitment, Government should also ensure regulatory
certainty to encourage continued investment in faster networks
so ultimately all can benefit.
There are questions over whether 2Mbps will
be sufficient to handle certain applications that are available
now and will become more popular in the future. ISPA would urge
Government to ensure that quality measures relating to reliability
and quality, such as ping times, packet loss and jitter, will
be put in place. Whilst the target is a good start and a Universal
Service Commitment of 2Mbps a useful oneparticularly as
2Mbps is generally sufficient for most current applicationsGovernment
in the longer term must look at ensuring that speeds are in line
with what users expect.
Is the Government right to propose a levy on copper
lines to fund next generation access?
ISPA welcomes the use of direct public funding
to support next generation access. However, we question whether
the proposed levy is the most appropriate means of doing this.
In the Digital Britain Report, the Government
argues that the "communication sector underpins everything
we do as an economy and society" and countries that "push
forward their digital communications sector will gain substantial
and long-lasting competitive advantage".
Taking into account these statements, which reinforce the importance
of next generation access, ISPA would argue that general taxation
would be a more appropriate means of funding to ensure the final
third is able to enjoy the benefits of NGA. However, until the
extent of the market reach is known, it is difficult to determine
how justifiable a levy is or the extent to which it is needed.
If a levy were introduced, the level of funding
would also need to be matched by a similar investment from Government
if the goal of widespread coverage is to be achieved. Following
this, individual projects should then be able to request funding
up to their full requirements. Once this is complete, ISPA would
also like to know what would happen to the fund post-universality.
It is important that Government provide clear
leadership on its plans for current and next generation broadband.
ISPA would welcome clarity on the uncertainty that has surrounded
the Government's intention on NGA, including comments on whether
the 50p levy will actually be introduced due to parliamentary
While the market reach of NGA is still being
established, the Government should further focus its attention
on removing supply side barriers to NGA. For instance, the Government
should focus on the encouragement of competition, tax incentives,
local NGA projects and infrastructure investment. The telecoms
market is extremely competitive, as stated in the Digital Britain
Report, reflected by the continuing trend in lower prices, along
with a rise in broadband take up.
Will the Government's plans for next generation
ISPA is pleased that the Government recognises
NGA as crucial to the UK economy and society and welcomes the
Government's aim to ensure that the whole of the UK is able to
The Digital Britain Report has set the
foundations for NGA. However, ISPA is keen to see more details
of the Government's plans, particularly over the Network Design
and Procurement Group (NDPG). As the report is minimal on detail,
there are a number of aspects that still need to be defined. For
instance, there is no definition of the final third, which is
crucial to understanding the future requirement for state subsidy;
there is little detail surrounding the NDPG, such as the cost
of collecting and managing the fund; and clarification is required
about the role of mobile operators who are not included in the
fund as they already pay licenses, as do fixed operators. The
Government could also afford to be more ambitious with its timescale
for NGA of 90% coverage by 2017. ISPA is aware that the Government
plans to publish a further consultation document on the final
third in the autumn and looks forward to seeing more concrete
plans in due course.
ISPA notes that Ofcom has already undertaken
a number of consultations in this area and the Government itself
published the Caio Review which looked at barriers to investment.
It is important that the right regulatory framework is in place
to encourage the private sector to develop next generation networks,
with the Government filling in those areas not covered.
Are ISPs providing the speed of access which they
promise to consumers?
ISPA is aware that this is an issue which generates
a great deal of interest from consumers. In June 2008, Ofcom,
with support from ISPA, launched a Code of Practice on broadband
speeds. ISPA recommends that members sign up to the Code and we
are pleased that the vast majority of consumer-facing ISPs have
become signatories. The Code requires adherence to a number of
principles, openness and transparency with consumers, such as
providing point of sale information so that potential customers
are informed of the likely speed they will receive prior to purchase.
Ofcom subsequently published research into broadband
performance which found that consumers were overall happy with
their broadband service. ISPA is committed to working with all
stakeholders to ensure that users receive clear, transparent information
about their broadband speeds.
One of the issues surrounds the advertising
of "up to" speeds. Advertisements in the UK fall under
the self-regulatory body, the Advertising Standards Authority
(ASA). The ASA has made a number of adjudications on the issue
of advertising broadband speeds and its guidance state that claims
such as up to should not "exaggerate" availability.
It is important to point out that a number of
factors outside of an ISP's control can affect a users' speed.
These include the distance from the telephone exchange, condition
of the phone line, quality of wiring within the house, the type
of modem or router being used and the speed of the computer which
can be addressed independently of a users' provider. ISPA believes
that transparency is key so that users are given as much information
about the speeds they can expect to achieve and why.
To what extent does the current regulation strike
the right balance between ensuring fair competition and encouraging
investment in next generation networks?
The current regulations do not strike the right
balance between ensuring fair competition and encouraging investment
in next generation networks. The current framework penalises any
organisation that builds a fibre-based network of the type that
is needed (by discounting multiple strands of fibre) to deploy
better coverage. The incumbent(s) have all the fibre and continue
to hold onto that asset and not sell or lease it to third parties.
One proposed solution could be to remove current tax liabilities
on lit fibre and require incumbents in areas to sell dark fibre
as a regulated product.
ISPA notes that Government, as set out in the
2009 Budget, is to broaden Ofcom's statutory duties by amending
the Communications Act to include the promotion of investment
in communications infrastructure alongside its competition role.
Whilst ISPA sympathises with the desire to encourage investment,
which will be crucial in ensuring that the UK remains at the forefront
of the global digital economy, altering Ofcom's powers must be
conducted carefully. There is a danger that powers to promote
infrastructure over competition could risk unbalancing the regulatory
balance to the detriment of the consumer and other factors, such
ISPA is committed to the principal of the end-to-end
network where practical, and as such sees the increasing number
of government-led initiatives into placing blockages and restrictions
within the network as being counter productive. The Internet as
a commercial enterprise can be traced back to the late 1980s when
the first commercial ISPs were created.
Without the freedom to create new and innovative
communications protocols, unhindered by networks requiring advance
understanding of the new protocols, the internet today would be
without email (POP3 added in 1996), websites (HTTP in 1992 and
HTTP1.1 in 1999), video streaming (1998) and VoIP (1996),
not to mention all the online gaming, p2p file sharing (both within
and without copyright) and other things that people have developed
to run over the open Internet.
Only taking a holistic look at the whole question
of Digital Britain and the impact that access to the global
resource has on the population can a question as simple as "Do
we have the right broadband speed?" be answered.
24 September 2009
122 Digital Britain - Final Report, Page 47 Back