Perhaps some of you who are more diligent than me and have worked through the 2inch thick report by now, may have more detailed views, which I would certainly be interested in hearing.

However, even the headline themes and stats make for initial interesting reading.

Working for the Broadband Stakeholder Group, it is no surprise that my attention immediately went to observations about the development of the broadband market.

There are no great surprises in here. However, the findings set out by Ofcom do confirm some of the trends various pundits have observed over the last 12 months or so.

Firstly, the number of consumers buying bundles of three of more services is on the rise. Whilst the number of households taking a bundled communications service in 2007 remained the same as the 2006 figure – 4 in 10, the nature of these bundles has changed.

Triple-play bundles now account for 32% of bundles taken in 2007. This increase perhaps reflects both the efforts providers such as Virgin Media and BSkyB to market these packages, and the value consumers now put on certain services. Have we reached the stage where multichannel on-demand TV is now seen as a core service people will pay for, alongside their phone and broadband?

Mobile broadband is another key development identified in the Ofcom study. Much has been said about the success of the dongle in recent months, and here are some stats to back up that assumption. Ofcom’s research shows that between February and June this year, monthly sales of these devices rose from 69,000 to 133,000 a month. Furthermore, 1.5 million people state that they use them at home as well as outside, giving credence to the perception that mobile broadband is beginning to put a real competitive pressure on fixed-line providers.

This trend is particularly important in the context of the UK’s move to next generation broadband (discussed briefly at page 303). Mobile broadband could prove to be popular as we move to faster, fixed-line broadband speeds. However, the role that it could play in a next generation environment is harder to predict.

We, like many others, look forward to Ofcom’s regulatory statement on NGA, for clarity on the regulatory framework that will underpin and support this important transition.

Last month, BT announced that it would invest £1.5bn to bring next generation broadband to 10 million homes by 2012. The speeds that would be available were quoted in BT’s release as 40Mbps to 60 Mbps for those homes serviced by a Fibre to the Cabinet (FTTC) deployment. Fibre to the Premises (FTTP) could, it said, offer speeds up to 100Mbps.

Although BT stated that the exact split of FTTC and FTTP was still to be determined, it did state that FTTP would be primarily focused on new build sites, whilst FTTC would be more “prevalent” elsewhere.

However, even in the unlikely scenario that it pursued a 100% FTTP deployment, delivering speeds of 100Mbps, the 200Mbps speed quoted by Virgin Media today knocks that straight out of the water.

The potential next generation broadband speeds that can be delivered depend on the technology being used. I could take this opportunity to harp on about the different potential capabilities of BT’s network as oppposed to the cable network owned by Virgin. I could point to the fact that the technology Virgin Media is deploying to deliver faster speeds, DOCSIS 3.0, uses channel bonding technology to (as the name suggests) bond channels together to achieve these super-fast speeds.

Yet a discussion purely on the technical capabilities doesn’t tell the full story. Indeed focus on these headline speeds alone misses the main reason why these announcements are interesting to the next generation broadband debate as it stands now.

The point is, the fact that such announcements are being made is exciting in itself.

Next month we expect to see the publication of a range of documents that will move the debate forward - the independent review on next generation networks being led by Francesco Caio, Ofcom’s regulatory statement on next generation access and the European Commission’s recommendation on the regulatory framework for a next generation environment.

Operators and investors need clarity about the regulatory framework before they can really get going on deployment.

The signals from both BT and Virgin Media are significant and welcome.

They and the rest of the industry now need regulatory clarity to make next generation access in the UK a reality, and not just a pipe dream.

In a deal with Reggefiber (a fibre network construction specialist) KPN will take a share in existing local FTTH projects and build on these as they deploy their FTTH network.

This is an interesting development in the EU context. The majority of incumbents within the EU are less than enthusiastic about opening up their networks having made such a large investment, but KPN have positioned this as an appropriate way to share the risk and ensure utilisation of the network. It moves KPN closer towards a civil utility-type of model, with many providers offering services over the network, owned by a single operator.

The local/community projects are also an interesting aspect of this development, as it shows that these can play an important role in demonstrating that these networks can be efficiently deployed - Reggefiber’s assets in the local networks they have built out are included in the joint venture with KPN.

The BSG has issued a statement welcoming this development, which can be found here.

This is not a surprise, of course. The speed of a broadband connection depends on many factors, including the number of other users online at the same time, the distance of a connection from the local exchange, the tuning of the modem in the home, and even faulty electrical goods within the home, which are clearly outside of the control of ISPs (see this excellent atricle in PC Pro for tips on how to improve your broadband speed).

But is speed really the be all and end all of broadband performance? There are other aspects of a broadband service that impact on performance, as I have discussed before, and these are often overlooked.

Improvements in these factors that affect performance could make far more difference to the current broadband experience than improvements in speed alone.

The largest categories of private value in the report are: doing things that we do now, but more efficiently; doing more of what we do now; and doing new things.

Each of these categories of value has the potential to be very significant. We make no attempt to quantify the last two, as it would be difficult (if not impossible) to do so.

Doing things more efficiently we have attempted to quantify. Based on 80% coverage, if 50% of broadband users saved 3% of their time, time savings worth £0.9bn per annum would be achieved (based on a value of leisure time used by government studies).

Note this is only an assumption, for indicative purposes. We would be interested in seeing any evidence that could refine this value, such as more detailed research on the activities consumers do online and how long they spend doing them.

The largest categories of wider economic value were: resilience, adaptability and policy options; and spill-over and virtual agglomeration. Again, these were not quantified as this was not appropriate, but we think these are likely to be significant in value.

The substitution possibilities created by next generation broadband would mean that the economy would be far more resilient and able to adapt to shocks, for example an oil price shock by providing alternative to travel. This also creates an additional range of options available to policy makers, which would be highly valuable in itself.

Virtual agglomeration had been identified as likely to be a big benefit from next generation broadband. Agglomeration refers to the productivity benefits of cities and clusters of activity - London, for example, has a higher productivity level than other areas in the UK. Through virtual agglomeration, next generation broadband could achieve some of the benefits of clusters and cities, and without some of the costs of cities such as congestion and pollution.

We also identified other categories of wider economic benefit, such as: an increase in competition in the economy; network effects as consumers and businesses both in the UK and across the world move to next generation broadband; reduced traffic congestion; the value created by the re-use of land and buildings no longer required by a next generation broadband network; reduced business travel; increased online backup; video distribution; and improved connectivity for SMEs. Some of these we did attempt to quantify, such as a reduction in business travel. For our estimations see section 5 of the report.

That’s the whistlestop tour of the categories of benefits we identified. We are keen to see these categories built on over time. We hope that as evidence emerges we will be able to more accurately populate this framework, to build up a more accurate quantitative picture of the benefit of next generation broadband.

First, a brief note on the methodology. We have taken a bottom-up approach, examining where in the economy specific value could possibly accrue, rather than making general estimations of the impact of next generation broadband on productivity or GDP. For more on this in the report, it is worth looking at the section on ‘pseudo costs and benefits’. We also broke down economic value in to two categories - private value that accrues to investors and consumers, and wider economic value.

The report sets out a wide variety of categories where value would accrue. Some of these benefits would be captured upon deployment; others would take time, require transformations and would accrue in the medium to long term. In addition some of these benefits may be impacted by various policy agendas - for example, the role for next generation broadband in reducing carbon emissions is potentially significant depending on whether a carbon tax was introduced that encouraged substitution for emission-intensive activities.

The report suggests that these benefits are potentially very large, and in the long term likely to be larger than the cost of deploying the network. Particularly, there is likely to be significant private value that will be captured by investors and consumers. This does not mean, however, that the business case is made, and in reality there are difficulties for investors in trying to capture this value.

The report highlights three key constraints on investors’ ability to capture private value. First, to the extent that next generation broadband is an experience good consumers may not be willing to pay a premium for the service until they have experienced it. Second, creating this value may require the transformation of value chains, which may take time and would be disruptive. Third, investors do not yet have accurate knowledge of how much consumers are willing to pay, meaning that there will be difficulty in setting the correct pricing structures in order to maximise how much of the value they are able to capture.

Generally, the report calls for further work that would address these and other uncertainties. Resolving these uncertainties will be key to creating a business case that is acceptable to investors. The BSG is continuing its work programme that will hopefully shed some light on these and other issues. We are keen that further evidence is put forward that can help illuminate these, and would be interested to see any evidence others have to this end.

The size of the investment required to roll out next generation broadband in any country, the irreversibility of that investment, and the likely importance to that country’s economy and society of superfast broadband mean that the costs of getting it wrong could be significant, and that investment should occur at the most optimal time possible in order to maximise the benefits.

For the UK, our report suggests, the most optimal time is not necessarily now. There are a number of uncertainities for investors that create a large value in waiting, such as a lack of evidence of consumer willingness to pay and the current regulatory uncertainty. Over time, this value will reduce as evidence emerges and some of the uncertainties are resolved - we believe over the next 18 months or so.

Ultimately, we still believe the market is best placed to decide when and how investment in next generation broadband should be made. But this doesn’t mean we should be complacent. It is important that the work that is being done continues, including Ofcom’s work to provide regulatory certainty, the Caio review, and the work of the BSG, so that in 18 months’ time we really do have a clearer picture.

First of all, the conference itself produced a lively and informed debate, with representatives from a wide variety of sectors and a range of speakers including Francesco Caio, head of the governemnt’s review of broadband. To view the presentations from the event see www.broadbanduk.org/beyondpipedreams.

The first of the two reports that we launched at the conference was ‘A Framework for Evaluating the Value of Next Generation Broadband‘. This report examines the incremental economic and social value of next generation broadband over current broadband provision in the UK.

The second report was ‘Models for efficient and effective public sector intervention in next generation broadband access networks‘. This report studies next generation broadband interventions across the world, and first generation interventions in the UK, to determine good practice for interventions in the UK.

These reports contain a lot of issues, which we will discuss in more detail in future blogs. For now, I can strongly recommend both reports if you are interested in the future of broadband in the UK.

by Peter Shearman, Policy Manager, BSG

The plan will see the Oxford Road area used as a test-bed, covering 400 residential properties and 50 businesses, before a phased rollout elsewhere in the area, and was agreed by the Council’s Executive in March (you can read the report here). It aims to see ’significant progress on implementation’ of the initial rollout phase during 2008/09.

On the heels on Digital Region, and with other authorities in the UK examining investment in NGA, Manchester is seeking to be a UK exemplar, providing knowledge and learned experience for other authorities in the UK. It is the lead authority in the DC10plus group on its ‘next generation connectivity’ workstream, and it hopes that its experiences will assist other UK authorities.

It is not just local authorities that can learn from Manchester and others, however, but broadband providers too. In the UK it is often cited that there is a lack of evidence of willingness to pay amongst consumers, and little or no evidence of applications and services that require the bandwidth provided by superfast broadband. Evidence will begin to emerge, however, from projects such as this.

Digital Region, the Ebbsfleet development, Manchester and others that are considering next generation broadband will provide valuable evidence for both public and private organisations, increasing the understanding of the market and allowing better-informed investment decisions.