Cross Party Group on Digital Participation held on Tuesday 25 September 2012
Willie Coffey welcomed members.
Vicki Nash gave a brief overview of Ofcom’s annual research document, Communications Market Report, Scotland 2012. She highlighted the ‘fast facts’ section which showed good news for broadband take up, smartphone take up and tablet take up. Broadband take up now sat at 68% across Scotland, matching take up in Wales and Northern Ireland with Glasgow increasing by 10 percentage points to 60%. Despite this there remains a worrying gap supported by further analysis of British Population Survey data that confirmed an enduring issue with take up in the Glasgow area when compared to other cities of similar characteristics.
CPG then welcomed John Cooke of the Mobile Operators Association. JC said he wanted to talk about what the operators do rather than how they deliver it and quoted an OECD report that stated a 10% increase in broadband utilisation can increase a country’s GDP by up to 1.3% which could prove critical to the UK and Scotland as we try to move out of recession. At an individual firm level when looking at SMEs across the G20, those with a good online presence experience 20% higher growth. The business case stands but connectivity is also good for citizens with research suggesting £500+ per year could be saved from household budgets by shopping online. 90% of jobs today require some level of ICT skills and people with those skills earn around 10% more than unskilled counterparts.
In some geographic areas mobile will be the most effective way of rolling out broadband. The rapid take up of tablets and smartphones is evident. Even since the CMR research quoted earlier in the meeting UK MOA data suggests that smartphone penetration is now 50% and tablet penetration is 15-20%. Tablets have seen phenomenal growth considering they have only been available since 2010 and are driving interaction with the internet. Low income homes also have a propensity towards mobile only connectivity.
In terms of barriers to furthering coverage JC cited economics, planning, participation, geography and low population density as the key factors. Masts also need power and connection back into the main telephone network before they can be deployed. Planning in Scotland tends to be less favourable than elsewhere in the UK, making a longer more expensive process. Masts need to be near homes in order to provide the desired level of coverage and service. Participation is also critical. Although figures show improvement sectors such as the SME sector need to boost their engagement with the technology. A strong example is Dominos Pizza who now see half of their sales for delivery come to them via e-commerce. Individuals also need the benefits of participation spelt out to them.
WC thanked JC for his presentation and opened the questions. He was asked for more detail about the planning issues in Scotland. JC said that in rural communities the local authority and people will generally welcome mast development. Urban zones less so and issues over the aesthetics of masts and health issues come up. In England there is more latitude to construct using permitted development rights as opposed to full approval; in Scotland you can only make very minor adjustments in general to existing structures. A member asked if it was possible to use different types of masts, lower heights etc? JC said it would but lower heights means a greater number of masts are required for coverage and conversely you could use fewer higher masts which are relatively easy to blend into an urban setting.
A member commented that having both wired and WiFi connectivity is the optimum set up for reasons of affordability. This will limit people who opt for mobile only solutions who perhaps cannot afford both technologies thus making their experience narrower.
Another member said that surely there was a stronger case for investment in the infrastructure in rural areas given the greater impact it could have there. JC said that it was the case that benefits were greater but the fundamental problem of remote and rural areas is that the costs of roll-out are uneconomic given the smaller populations. There are two ways to fix that, one is to push coverage via regulation and the other is to put public funding in place as has happened with the UK Government’s Mobile Infrastructure Project. An MSP said that in his rural constituency a good basic service is most desired. He had conducted a drive survey using 4 mobiles on different operators and concluded that the village of Edzell for example is a complete not-spot. It was acknowledged that while Government funding will go some distance it won’t finish the job. He suggested that the highly commercially viable cities should be subsidising rollout in the uneconomic areas. Another member commented that our current approach to infrastructure rollout in Scotland felt piecemeal and that this was not helpful. A new strategy was required that focuses on backhaul network capability.
A member asked about measuring mobile coverage and whether it was still based around the road network. JC answered that the new coverage maps were largely produced using computer modelling which, in general, was very accurate.
In response to a discussion around further network rollout JC commented that Ofcom’s next spectrum auction is still in train and until that happens MNOs will hold back their investment monies until they are sure what they have to play with. This will also tie into the MIP although the industry view is that the £150m will not cover all not-spots.
It was felt that the last auction had been too aggressive, forcing licence prices too high and reducing the capital available for rollout and build. JC though that this is a view echoed in a number of quarters and predictions are that the next auction will raise something like £4bn as opposed to the £22bn of last time. Although a reserved matter some of the spending power has been devolved to the Scottish Government and one member felt that they should be adopting an inside out approach. He went on to say that all too often the EU were hearing that nowhere in the UK gets less that 2Mbps but these stats mask a very different story within Scotland.
A member suggested that Scotland’s issue was one of backhaul and network capability. He cited Southern Ireland as a good example where they had sub-sea cabling direct to the USA, West Africa and Caribbean also adopted this approach, another member disagreed with this saying that Scotland’s network capability was fit for purpose and that Scotland is very well connected. Going via London was the most cost efficient method and any new international link would eat up a sizeable proportion of a budget that already would need to stretch significantly to solve the home issues.
WC thanked members and JC for their contribution and welcomed Dr Drew Inglis to the meeting. Dr Inglis had written a report on utilisation of mobile services within the NHS, which providea tool for immediate emergency care, delivered by guidance over a mobile phone. There were significant difficulties with losing contact with teams when they were out on call and Drew hadconducted a survey of coverage issues. 52% of respondents replied saying that they have no single provider offering good coverage and this included 5 community hospitals. His research showed true evidence of the rural digital divide. NHS operatives find detailed workarounds for the problem including carrying multiple mobiles on different networks, old style pagers and using non-UK tariffs to enable roaming. The solutions were relatively simple; wifi within hospitals and signal boosters. The NHS could also look at securing a roaming agreement which has technically already been done for public 999 calls. This should be replicated for rural areas and national deal for a non-UK tariff should be negotiated to help save the NHS additional expenditure in this area. Organisations and consumers should not be expected to pay a standard rate for a reduced level of service. Other countries have solved their not-spot problems with Australia offering subsidised satellite phones and both France and Norway having found solutions. Other organisations should also lobby for better coverage. The benefits extend to education, transport, tourism, local government and business.
WC thanked DI for his presentation and opened the floor to questions. A member asked if this was being dealt with at NHS Board level or within central Government? DI replied that the NHS was looking at it but the traditional response is that poor coverage is a factor of rural life. An MSP stated that even with 95% coverage obligations in place via the 4G auction, most areas not served now will continue not to be but there are high hopes for the Highlands and Islands Enterprise contract. DI expressed his puzzlement at the fact that we continue to furnish areas that have good fixed broadband with further connectivity via high speed mobile broadband. An MSP commented that some NHS areas would like to opt out of national contracts for this reason.
VN said that the study was an excellent piece of work that had been fed into Ofcom not-spot team and the MIP team.
A member asked what the operators’ views were of not-spots on transport routes. JC answered that major trunk roads are reasonably attractive for investment but a view would always be taken on how much traffic might be generated based on how well used a route it might be. Another member asked if a USO had ever been considered for mobile. VN answered that there isn’t a USO for mobile, people can get an internet connection by virtue of the USO for fixed line communications services although at dial-up speeds. JC commented that percentage coverage obligations mean that operators can service densely populated areas and hit the requirement. The member said that the companies were making good money to which JC responded that the MNOs already spent a lot on licences that had gone into Treasury and that in other countries the mobile spectrum had been released for free to enable coverage. An MSP said that the Scottish Government had asked for a 98% coverage requirement by local authority to be added to the new 4G licences. A member suggested that although higher coverage obligations might de-value a licence there might be broader social and economic factors that make that a cost worth paying. Better analysis of the cost/evidence base would be useful for future consultation exercises to illustrate the argument. There was a comment that Scotland should look at the issue more holistically in general. WC thanked DI for his slot and asked where the report was destined for. DI replied that he had presented to the NHS North Board and it was going to the Joint Improvement Teams. He was hoping to get it right to the top of the NHS agenda.
WC brought in Claire Mack from Ofcom who talked about the upcoming 4G auction and mobile coverage issues in Scotland.
A member asked whether State Aid issues would arise if the Scottish Government were to fund mast installation. CM replied that this was possible and suggested that it would be beneficial for the BDUK/MIP projects to conclude to see what areas remained without coverage. It was suggested that resolution of the current State Aid issue with the BDUK broadband funding may take some time, with a detrimental impact on roll-out in Scotland of vital connectivity – ‘Scotland should go it alone’. There was criticism from one member that MIP was a 2G voice-only solution. If Scotland had sufficient backhaul, it would be feasible to install 3G and 4G with little difference in price to the customer.
Another member said that, as well as securing infrastructure, it was important to stimulate demand. Reference was made to population densities in Scotland being widespread, with some fairly large communities in very remote locations. In ideal circumstances, any new build should have the facility to carry fibre to facilitate installation of superfast broadband when/if this occurred.