Is slow and unreliable broadband affecting London’s economy?
Internet access in London needs to improve if it is to continue attracting high-tech businesses
By Sophie Curtis | Techworld | Published: 10:21, 12 July 2012
Slow and unreliable broadband is discouraging high-tech businesses from setting up shop in the UK, and potentially damaging London's economy, according to a panel of representatives at the London Assembly’s Economy Committee.
Recent research by GLA Intelligence has shown the quality of London’s broadband connections – with an average download speed of 5.8Mbps – is lower than many other cities. Seoul averages 29.9Mbps, while speeds were above 15Mbps in Osaka, Tokyo, Hamburg, Koln, Rotterdam and Helsinki.
Despite being home to over 23,000 ICT and software companies, London does not even make it into into the top 30 cities in the world for broadband quality, according to the report. The technology industry hosts a quarter of all British jobs in computer and related activities employment and 22 percent of British jobs in telecommunications.
Related Articles on Techworld
“It is essential in a global economy that we have connectivity and capacity to work around the world using the internet,” said David Hodges, panel member and digital policy adviser for the London Chamber of Commerce.
The consensus among Economy Committee panellists was that the modern workplace is not constrained by the walls of a building, but is a constantly shifting entity. Workers need to be able to connect to the internet at home, at work, in cafés, airports, communal offices, on trains – even in the street if they want to.
While previous initiatives to put Wi-Fi equipment on lampposts and street furniture have been discontinued because they were not commercially viable, progress has been made in recent months with BT rolling out an additional 500,000 hotspots across London ahead of the Olympics and O2 creating “Europe's largest free Wi-Fi zone” in Westminister, Kensington and Chelsea.
However, a lot more needs to be done if internet access in London is to become truly ubiquitous. Last year the government announced the creation of a £100 million urban broadband fund, part of which will benefit London, but the private sector also has a vital role to play.
“We are keen for Wi-Fi to be available in as many public places as possible, and keen for it to be free,” said Hodges. “We want start-ups and business people on the move to be able to do work and use their time as productively as possible. A great start has been made in Kensington and Chelsea, but lots of other boroughs could benefit.”
In particular, East London's Tech City was highlighted as an area that needs prioritisation. A recent report published by think tank Centre for London estimates that there are at least 3,200 digital firms in the cluster, but many are having to wait between six weeks and two months to get a fast broadband connection to their office premises, having a huge impact on their businesses.
This was partly blamed on BT's dominance of the fibre market. Andrew Dismore AM, chair of the Economy Committee, suggested that it was in BT's interest to constrain the market, and that tighter statutory targets should be imposed.
However, Andrew Campling, London General Manager for BT Group, refused to accept that broadband was slow in London, citing figures for Newham, where 70 percent of premises have access to fibre, supporting speeds of up to 80Mbps. He also claimed that the current average time to complete an order was seven working days.
“The vast majority of people have a wide choice of suppliers, offering broadband at different price points and different speeds,” said Campling. “By the end of this year, 80 percent of premises in London will have access to fibre.”
Meanwhile, Jon James, executive director of broadband at Virgin Media, said that London does not have the dense urban network of some other cities, that are able to run network infrastructure over poles and through the sewers. This means ISPs are left with expensive and complicated digs in order to install networks.
“This is a big, old city, and we’re trying to thread a new infrastructure through an existing build form,” added Mark Kleinman, head of economic and business policy for the Greater London Authority. “We’re extremely pleased that government is talking about urban broadband because, until recently it has all been about rural.”
He said that the public sector's focus would remain on three key areas – digital inclusion (making sure everyone in the country has some form of internet access), urban broadband (providing globally competitive speeds in UK cities), and providing top-grade access in key hotspots like Tech City.
The importance of accurate broadband advertising was also highlighted, with several attendees complaining they are not able to achieve the speeds advertised. Virgin Media said that it tries to advertise the speed it delivers, while BT said that all customers are given an accurate speed estimate for their individual line before installation.
In conclusion, Kleinman said that that the current amount of public sector investment in broadband is sufficient, but admitted that this was based on a set of assumptions about what the private sector would contribute.
"There is no evidence to suggest there is a shortfall, but as more priced broadband projects come in we will be able to revalidate modelling," he said.