Extending Local Full Fibre Networks: Our Response to the Government’s Call for Evidence

The Government recently requested submissions on ways that it might most effectively use public funding to encourage the deployment of full fibre networks in the UK. It asked organisations to respond to 3 questions. This is what we said:

Wired Sussex is a membership organisation for digital, media and technology businesses in Sussex. We have a membership of over 2,500 businesses and we support them to innovate and grow. We have member businesses of all sizes – from large corporations to freelancers. Most are SMEs – ambitious, fast growing, innovating with new technology and new business models.

Question 1:

What local approaches have been taken to date or are planned – either in the UK or internationally – to stimulate the market delivery of full fibre networks, in both urban and rural areas, and what results have they achieved? Where appropriate please provide evidence and any other additional information.

Wired Sussex has been working with partners to create three elements that will play an important role in promoting the market delivery of full fibre: the Digital Catapult Centre Brighton, the national 5G testbed for SMEs, and the Brighton Digital Exchange. We believe there is an opportunity to take advantage of these assets in developing full fibre connectivity in the Brighton city region, based on the notion of three pillars:

  • The right technical infrastructure – to permit innovation;
  • The right investment and governance models – to ensure open competition;
  • The right engagement model – to drive take up and transformation.

Brighton Digital Exchange

The Brighton Digital Exchange (BDX) is explicitly intended to help create the conditions that support investment in new infrastructure – including full fibre, but also complementary infrastructure elements such as hosting and wireless.

BDX has already been successful in:

  • Creating a highly competitive market for the delivery of connectivity in New England House, at the core of the creative, digital and IT (CDIT) cluster in Brighton.
  • Fostering collaboration between the member businesses (all CDIT SMEs), including innovation in products and services for the market.
  • Creating a neutral hosting facility valuable to CDIT SMEs that previously needed to co-locate in London.

BDX is based on the Digital Exchange model, which combines five elements:

  1. A landing place (PoP) for upstream (transit) connectivity. BDX has three transit providers providing members (and through them, end users) with competitive options to connect to the Internet and also offering a Layer-2 route to the LINX peering LAN.
  2. A landing place for downstream (access) connectivity. BDX has a small fibre access network connecting 90 units in New England House. It is an ideal location to backhaul new access network, and is already in use as a landing place for Ethernet (EAD) connections.
  3. Quality hosting/co-location capacity to support carriers, ISPs and CDIT businesses. BDX has a N+1 resilient 350-amp hosting facility capable of supporting 30 or so racks.
  4. A close-by early-adopter market. BDX is in New England House, home to some 90 CDIT business units and close to North Laine in the heart of Brighton’s digital and creative quarter.
  5. A mutual ownership and governance model to ensure neutrality. BDX is structured as a cooperative, currently with 7 members. This structure follows the example of LINX and other IXPs. BDX trades only with members, avoiding competition with them. As with LINX, one member one vote ensures that the shared infrastructure serves all member needs and is not monopolised.

These five elements of the Digital Exchange model have been brought together for the first time in Brighton. All five elements work together to support the investment case for new fibre infrastructure:

  • Providing a neutral point of presence for (competing) service providers;
  • Acting as an attractor for transit providers to service local ISPs;
  • Providing edge-hosting capacity to support high-traffic, low-latency content and applications that take advantage of the full fibre network;
  • Providing local easy-access hosting to support CDIT SMEs;
  • Growing the local ISP and content provider market, and ultimately offering a location for local peering.

This helps encourage healthy full fibre market development:

  • Providing support for altnets to work alongside each other in a locality and so encouraging competition at the passive infrastructure layer;
  • Providing support for service providers (ISPs and content providers) to access multiple fibre networks.
  • Offering a route to local peering and a more resilient infrastructure, independent of the telephone exchanges which often are not ideal.

BDX could act as the core of a network of pilots and trials taking advantage of the 5G Testbed and Digital Catapult Centre. The asset could be further exploited by creating new smaller ‘DX-PoPs’ in strategic locations – see under Question 2.

National 5G Testbed for SMEs

The 5G Testbed for SMES is designed to enable small, innovative businesses to create new products and services that can utilise and benefit from a 5G network. It is being constructed and supported by a partnership including the 5G Innovation Centre at the University of Surrey, the Digital Catapult Centre, Coast to Capital LEP, and the University of Brighton. Wired Sussex leads on the business engagement and innovation activity.

The project has been supported by independently commissioned research into the local business and academic communities. This research demonstrated two things:

  • That SMEs are both keen and ready to access such a facility to try out new applications – larger corporates and academic bodies see an opportunity to use the testbed to work with SMEs, as well as vice versa.
  • That some SMEs are interested in the potential for such a testbed to remain in place as an infrastructure over which they could provide real and continuing services.

Full fibre and 5G infrastructure are closely linked and we believe there is an opportunity to build on and expand our 5G pilot activity to stimulate and support the investment case for full fibre. The SME 5G Testbed is an ideal location to pilot this work.

Digital Catapult Centre Brighton

The Digital Catapult Centre Brighton (DCCB) is a regional delivery partner to the national Digital Catapult. Catapults are recognised as a key element in HMG’s industrial strategy. DCCB provides support to businesses innovating in emerging technologies including the Internet of Things, VR / AR and Big Data. It is focused on developing place-based opportunities including location and proximity services, beacon based navigation and informational tools, loyalty and cross-selling technologies, augmented and experiential reality, and process optimisation.

It is a partnership between Wired Sussex, C2C LEP, the Digital Catapult, Brighton & Hove CC, American Express, Gatwick Airport and various universities.

DCCB strategically connects these partners with SMEs to drive new products and services to market. It has well developed engagement systems and an effective innovation-support model.

DCCB provides the third pillar: it can drive fast take up of opportunities to trial and pilot innovative applications that make full use of full-fibre infrastructure. Like BDX, it is based in New England House in Brighton.

We have what is currently a unique combination of the digital exchange, the 5G testbed and the digital catapult centre and this provides a core set of geographically co-located assets, all with a common theme around supporting SME innovation. We would recommend leveraging this opportunity across our LEP.

Question 2:

What evidence is there to demonstrate the effectiveness and potential of approaches A to F[below], specifically in the context of stimulating the rollout of local full fibre networks in urban and rural areas?

  1. Public sector demand aggregation

The local experience of public sector demand-side aggregation has seen cost savings for local authorities and other agencies, but only in the procurement of bandwidth and systems integration.

We believe there is potential to use public sector demand to stimulate fibre deployment using the anchor tenant model. However, local attempts have as yet not achieved sufficient aggregation of demand.

A more joined-up approach involving more than one local authority in the coastal conurbation and the M23 corridor (Brighton – Gatwick – London) could assemble sufficient demand and further put the public sector in a stronger position to attract investment that delivers transformation. This requires a wider area: many public-sector connectivity demands require sparse wide-area connectivity rather than denser access network penetration. By linking such areas, the investment case for dense fibre becomes easier to achieve.

Our ideas for creating a DX-PoP ring (see E) could tackle precisely this challenge.

  1. Voucher schemes for private sector demand aggregation.

The local experience of the Superconnected Cities voucher scheme sems to be that it has provided improved connectivity for a number of businesses, but with limited impact on aggregation. A very few local providers have had some success in aggregating demand at building level but the scheme has not resulted in the deployment of new fibre.

We are concerned that if vouchers are based on service delivery rather than infrastructure deployment, they tend to fragment demand. We need mechanisms that encourage the deployment of open networks to enable competition and innovation among digital, media and tech businesses offering services over the networks.

  1. Making public sector assets available

Member businesses are keen to make use of public sector assets for the deployment of wireless infrastructure.

We believe there is also potential to create a valuable shared asset pool using a ‘dig-once’ policy as advocated in the USA, for instance.

  1. Access to location data on infrastructure assets

The creation of a shared duct register would be an essential component of such an asset pool.

  1. Directly funding fibre routes in uneconomic areas

We are concerned that subsidising private sector investment in so-called ‘uneconomic’ areas has a tendency to encourage deployment of (wholly or partially) vertically integrated networks with few opportunities for our member businesses – smaller service providers and CDIT SMEs – to capture more of the value chain.

We think there are two opportunities for state-led investment or co-investment in the conurbation to stimulate further investment following. These are addressed here in E and below in F.
Creation of a DX-PoP dark-fibre ring. The considerable benefits of the Brighton DX could be spread to other areas in the Brighton conurbation and M23 corridor (key to C2C LEP’s economic strategy) through the creation of a dark-fibre ring connecting smaller ‘DX-PoPs’. This would give BDX members a presence in new locations, and open opportunities for new members in other towns and districts.

Each DX-PoP would provide a neutral location to connect new network. Local CDIT businesses could connect with BDX and join the collaborative community. DX-PoPs would be located in or near existing or potential CDIT business clusters. Typically, a favoured building or buildings which could be connected to the DX-PoP with fibre at low cost as part of the project, or through landlord investment, aggregated vouchers etc.

Aggregated public sector demand could also play a role in supporting the business case for such a ring. The DX-PoPs for example may be able to service local public sector users, working in collaboration with the existing PSN arrangements. The ring would help assemble a larger aggregation of public sector demand to negotiate anchor tenancy agreements.

To create the DX-PoP ring, the dark-fibre ring deployment would be the larger part of the investment. There is arguably a market failure which state-led intervention could help unlock:

  • Individually procured leased circuits to connect the DX-PoPs would incur steep bandwidth charges and would not offer backhaul costs low enough to support the initial investment case.
  • Dark-fibre routes would support the maximum competition and innovation by participating SMEs.

There is a largely closed and non-fluid market in dark fibre that presents challenges for new access network investment – a fact acknowledged by Ofcom. An investment in a DX-PoP ring would open, rather than distort, markets and stimulate private investment.

  1. Potential pilots

Seeding local fibre infrastructure within the New England Quarter to support innovation and enhance the 5G testbed.

There is a case for initial seed investment to take advantage of the DX and connect immediate buildings where CDIT businesses are concentrated. This would have three indirect outcomes:

  • Providing CDIT SMEs with access to full fibre to encourage innovation in new applications and content that would then stimulate take up of new infrastructure created later and in other places.
  • Seed investment in a comprehensive full fibre rollout in the area to take advantage of the improving economies of scale in the DX and member backhaul.
  • Providing an incentive to support Foreign Direct Investment

Two immediate opportunities could be the new University of Sussex Innovation Centre currently under construction and an outdoor element to the 5G testbed, in both cases taking advantage of the presence of BDX.

Such a project would help bridge the gap between testbeds, pilots and full deployment. It is our belief that the 5G testbed could become an important factor promoting sector development and helping to enhance the business case for full fibre investment.

Question 3:

What is the most effective and efficient delivery model Government can use to stimulate future delivery of full fibre networks across the UK in both urban and rural areas, building on and integrating approaches that have been taken to date?

Wired Sussex is not in a position to recommend a comprehensive delivery model. However, we do think it is important to have clarity on the goals that we should be aiming to meet in that delivery.

We represent a sector that will be critical in the development of a healthy full-fibre ecosystem for the UK. It is our members and their peers in other parts of the UK that will be doing much of the development and innovation in new applications and services. We believe it is vital that the delivery model adopted recognises that this innovation cannot be supported just by delivering better broadband services, however fast. That is because our members innovate frequently by crossing network layer boundaries, they grow by capturing more of the digital value chain. They should not be limited to the application layer of the network stack.

For this reason, the delivery model must be constructed bearing in mind:

  • Governance and ownership models for should promote neutral open-access infrastructure.
  • Access at the passive layer is particularly important, but also at Layer 2.
  • Network boundaries should not matter at lower layers: there should be an aim to create a passive and Layer-2 single market.
  • Nodes, points-of-presence and exchange points are as important as access network – they should be neutral, support edge hosting and ultimately permit the development of local peering.
  • Access to affordable dark fibre to backhaul and interconnect access networks is a vital part of the investment case, and intervention could be used to help create a fluid open market.

Concluding remarks

Promoting the delivery of full fibre is about creating the right ecosystem as well as marshalling investment. Such an ecosystem recruits CDIT SMEs, small ISPs and content providers to create the applications that drive demand for new network capacity, but also have a role to play in using it to deliver services. Attention should be paid to creating the nodes/exchange points that can support competing altnets and service providers, and will help the UK develop a resilient Internet infrastructure for the 21st century.

We would welcome an opportunity to work with government to take advantage of the work we have done in Brighton to create pilots demonstrating how such an ecosystem can be constructed:

  • With a ring of neutral DX-PoPs linked with dark fibre, supporting local clusters and helping to aggregate public sector demand;
  • With a pilot deployment of fibre in the New England Quarter to connect strategic buildings and support/take advantage of the 5G testbed.

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