Are ISPs the problem or the solution to getting broader broadband?

We need fast broadband, and we need it everywhere. But is it harder to do with one company controlling a third of the market?

One of the most exciting things about growing a business in the 21st Century is that thanks to the Internet, you have the ability to reach an infinite audience. In the UK we're particularly good at it. We generate 8 per cent of our GDP, £120 billion, through the Internet.

But of course, to start a business on the Internet, you need have to have access to it first. That's why the Lords Communications Committee report into the Government's plans for Superfast Broadband has struck a chord with so many. Current Government plans are to install 25Mbps high speed broadband across 90 per cent of the UK and a minimum of 2Mbps broadband for everyone by 2015. They hope to achieve this through the Broadband Delivery UK (BDUK) Project. But the Committee's report argues that Government is too focussed on speed, and it needs to change its focus from a 'high-speed' network to a 'high-spec' network. A core part of the concern is the affect the project, and the way it has been run, will have on competition in broadband provision.

According to Ofcom's figures the market is currently split between four key players BT (29.3 per cent), Virgin Media (20.2 per cent), TalkTalk (18.5 per cent), Sky (17.9 per cent) and the rest split up between smaller providers (14.2 per cent). But there are concerns, both at home and from the European Commission, that the BDUK project will serve to exacerbate BT's dominance in the market. Currently only BT is the only provider that has successfully bid for regional funding as part of BDUK, with the nine other interested parties withdrawing due to concerns over costs and the complication involved in providing fibre connections.

The problem of providing ensuring competition in the broadband market is by no means easy, particularly with the historical position of BT. Many other countries across the world are coming face to face with the sheer cost required to invest in this technology, versus the need for competition. As suggested by the Lords report there are a number of changes that could be made to the BDUK project to improve this, including potential open access fibre-optic hubs and public money only being awarded should be dependent on installing fibre to a local level rather than to the cabinet. They also propose "fibre hubs", which would allow neighbourhoods who set up their own networks to retain control rather than being required to hand ownership to BT and could connect the BT exchanges at a set price.

Apart from changes to the BDUK project there are other measures that could be taken to encourage competition that do not involve additional funding to the BDUK project. Ofcom has done good work in getting BT to reduce the cost of wholesale broadband and allow other ISPs access to its local exchanges in areas where BT is the sole provider, and ideally the cost would be reduced further. The Government can also, in light of its goals to deliver a better broadband, reconsider its decision from 2010 to scrap the review into the fibre tax which disadvantages other providers who must pay per metre of "dark fibre" to be lit.

Providing good competition to allow consumer choice is not just important for levels of service, speed and reliability as there are a number of wider issues that mean competition is increasingly important. Running parallel to the discussion over investment in broadband infrastructure we have the net neutrality debate. After many months of discussion ISPs have recently signed up to a voluntary “Open Internet Code of Practice”, which commits to them to providing full and open internet access and not block access to legal services which are bandwidth heavy, such as iPlayer or 4OD in the name of traffic management.

Most of the ISPs operating in the UK have signed up, including the dominant provider BT. Unfortunately Virgin Media, the second largest provider have not, citing issues with the wording of the code. The implementation of a voluntary code of practice relies upon consumers having real choice in their broadband connection, and the option to leave their provider if they do not comply with the code. Were the BDUK project to endanger future prospects for increased competition this would undermine the provision of an open internet.

And increasingly ISPs are being asked to take on more and more issues. While we want them to focus on providing us the best provision ISPs are currently being asked to look into; enforcing the Digital Economy Act and policing Internet users through a system of reports and warning letters; cooperate with the Government consultation looking into implementing 'default on' blocks for adult content; cooperate with the Home Office plans as part of the Communications Data Bill; and all while trying to put into place a better network for their customers who pay them for reliable access and good speeds.

We need to ensure that the UK has good enough Internet infrastructure to support our ambitions and not only compete with Europe, but with the world. The Government needs to decide where ISPs priorities should lie and consider whether it truly wants a broadband network fit for the future.

Sara Kelly is the Policy and Development Manager for the Coalition for a Digital Economy.

How Jim Murphy's mistake cost Labour - and helped make Ruth Davidson

Scottish Labour's former leader's great mistake was to run away from Labour's Scottish referendum, not on it.

The strange revival of Conservative Scotland? Another poll from north of the border, this time from the Times and YouGov, shows the Tories experiencing a revival in Scotland, up to 28 per cent of the vote, enough to net seven extra seats from the SNP.

Adding to the Nationalists’ misery, according to the same poll, they would lose East Dunbartonshire to the Liberal Democrats, reducing their strength in the Commons to a still-formidable 47 seats.

It could be worse than the polls suggest, however. In the elections to the Scottish Parliament last year, parties which backed a No vote in the referendum did better in the first-past-the-post seats than the polls would have suggested – thanks to tactical voting by No voters, who backed whichever party had the best chance of beating the SNP.

The strategic insight of Ruth Davidson, the Conservative leader in Scotland, was to to recast her party as the loudest defender of the Union between Scotland and the rest of the United Kingdom. She has absorbed large chunks of that vote from the Liberal Democrats and Labour, but, paradoxically, at the Holyrood elections at least, the “Unionist coalition” she assembled helped those parties even though it cost the vote share.

The big thing to watch is not just where the parties of the Union make gains, but where they successfully form strong second-places against whoever the strongest pro-Union party is.

Davidson’s popularity and eye for a good photo opportunity – which came first is an interesting question – mean that the natural benefactor in most places will likely be the Tories.

But it could have been very different. The first politician to hit successfully upon the “last defender of the Union” routine was Ian Murray, the last Labour MP in Scotland, who squeezed both the  Liberal Democrat and Conservative vote in his seat of Edinburgh South.

His then-leader in Scotland, Jim Murphy, had a different idea. He fought the election in 2015 to the SNP’s left, with the slogan of “Whether you’re Yes, or No, the Tories have got to go”.  There were a couple of problems with that approach, as one  former staffer put it: “Firstly, the SNP weren’t going to put the Tories in, and everyone knew it. Secondly, no-one but us wanted to move on [from the referendum]”.

Then again under different leadership, this time under Kezia Dugdale, Scottish Labour once again fought a campaign explicitly to the left of the SNP, promising to increase taxation to blunt cuts devolved from Westminster, and an agnostic position on the referendum. Dugdale said she’d be open to voting to leave the United Kingdom if Britain left the European Union. Senior Scottish Labour figures flirted with the idea that the party might be neutral in a forthcoming election. Once again, the party tried to move on – but no-one else wanted to move on.

How different things might be if instead of running away from their referendum campaign, Jim Murphy had run towards it in 2015. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.

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