Sunday, 25 May 2014

Analysis: Does the UK need high-speed rail or high-speed internet?

Analysis: Does the UK need high-speed rail or high-speed internet?

Billions of pounds of investment at stake


To address the key question above; both, is probably the rational answer. But when the volatile cocktail of public opinion, billions of pounds, experts and politicians are all slowly stirred in a big austerity cauldron, rationale evaporates into the extractor fan.


The potential economic benefits of high-speed rail and high-speed internet are both well established. A report by KPMG last year concluded that HS2 could deliver an annual £15 billion boost to the economy, with cities and regions outside of London benefitting the most.


The report, paid for by HS2, was subsequently criticised for assuming that some regions in the country would receive a huge economic boost simply because of better transport links, and ignored the issues around the lack of skilled labour and developable land.


The economic benefit of HS2 in cold hard cash has changed a number of times over the years, ranging from KPMG's £15 billion, to a slightly more ambitious £20.1 billion prediction from the Department for Transport in 2012. The current figure stands at £13.3 billion in "wider economic benefits".


Supporting a new economy


The potential economic benefits of a full FTTH roll-out, too, are impressive. The UK is the 'most internet based major economy', with internet related trade contributing 8.3% to the UK economy, according to a 2012 report from the Boston Consulting Group. It predicts that internet related trade will continue to grow, possibly rising to 11% in the next four years, and reach a total value of £221 billion by 2016.


A report commissioned by the Department for Culture Media and Sport last year estimated that a county-wide fibre roll out would add £17 billion to the UK economy by 2024. But, most notably: for every £1 invested, a fibre optic rollout would offer a £20 return in economic impact.


The numbers aren't that far apart, but the economic benefits of a fibre rollout are more immediate. Laying fibre optic cable is both less costly and significantly faster to do than building a brand new rail network. But why do they have to be mutually exclusive? If digging is required to lay tracks down, then surely fibre optic cable can be laid too? Both are important, both are an investment, so both should be top priority, right?


Professor Peter Cochrane, the former chief technology officer at BT, certainly thinks that two angry birds could've been killed with one high-speed stone.


"Here is the tragedy: HS2 should never been 'sold' as a train project. The 'big dig' is the biggest cost and the grand ditch could have housed a train line and a water main moving water from where it falls to where it is needed.


Professor Peter Cochrane: doesn't mince his words


"Politicians know the price of everything and the value of nothing"


"The same it true of energy. It should have been a disguiser of power lines, an optical fibre trunk is obvious as is a gas main and an oil/fuel distribution system. Why didn't any of this emerge? Our parliament runs strictly to 17th Century protocols and processes and cannot deal with such complexity. For HS2, the real opportunity was stuffed by tradition.


"Given all of this; money spent of 'real broadband' that will support a future of Cloud Computing - and bandwidths around 1Gbit/s both ways - would have been a bargain. Unfortunately, the reality is that we won't get either. The treasury/politicians know the price of everything and the value of nothing".


We know from experience that the government has, at best, a sketchy record when it comes to anything with a circuit board. And it's entirely likely that the government missed a trick with how HS2 construction could've been multi-purpose and how that was presented to the public.


But despite Professor Cochrane's comments, former transport minister Simon Burns hinted that fibre optic cables could be run along HS2 track in January last year.


He said: "Construction of HS2 gives us the perfect opportunity to explore how we can make it easier for even more people to benefit from ultra-fast broadband — and potentially deliver improvements to the provision of other utility services, including water and electricity."


When I asked the Department for Transport if this was true and whether or not it saw HS2 as more of a priority than fibre optic rollout, it responded with: "HS2 and broadband are both important priorities and one isn't being done in the expense of the other.


"We are investing over £1bn in broadband and mobile infrastructure across the UK, to grow our economy and make Britain more competitive in the global race. The government is on track to deliver superfast broadband to 95% of the UK by 2017.


Has the government got its priorities right?


HS2 gets funding priority


"HS2 is a once in a generation opportunity to create jobs and develop skills, provide the extra space we need on our rail network for commuters and freight and better connect our northern and midland cities."


There you have it, neither a confirmation nor denial of a plan to lay fibre optic cable next to HS2 track. From that statement, it would appear that both are a priority to the government. But that the £1 billion investment, whilst a huge amount of money, is nowhere near the £43 billion spent on HS2. Clearly it considers HS2 as more of a priority.


There's also the issue of the government classifying "super-fast broadband" as 22mbps. That's more super-average than super-fast. In places like Hong Kong, a gigabit both ways is standard. In fact, in much of Asia, internet speeds are significantly faster than the UK and Europe. It's chasing average speeds by trying to rollout out fibre to the cabinet (FTTC) when it should be far more ambitious.


The government may protest that this is not an 'either /or' situation, but the very importance of rail and broadband infrastructure to the UK, and the government's failure to tackle both with an equal amount of bullishness, has created the very same either / or situation it is adamant doesn't exist.


The critics of HS2 and supporters of a massive government-led fibre rollout could pack out a Class 221 Super Voyager, whereas the pro-HS2 camp might occupy a couple of seats in first class. When I put out a request for comment from either side on this issue, a number of commentators jumped at the chance to speak in favour of a fibre optic rollout, and only one on the pro-HS2 side - Go HS2. Who ultimately failed to respond to my questions.


The big, unwanted dig


Public unconvinced


The public, too, seems to have turned sour on high-speed rail. A recent survey by the Institute of Technology and Engineering found that 43% of people surveyed saw more economic benefit in extending fibre-optic broadband to every home in the country, than building nuclear power plants (32%), airports (17%) and HS2 (16%).


Boris Ivanovic, Chairman of Hyperoptic, explained to me how both short and long term benefits of HS2 are outweighed by the country's need for fibre to the home (FTTH): "I believe that the short-term benefits for HS2 and FTTH are similar – both would create immediate employment opportunities to build the infrastructure.


"But long term I believe that FTTH would have greater economic benefit – the UK is the most internet-based major economy of the G20, as such it's likely more businesses will be built upon broadband than on a train line.


"Technology is evolving all the time and is driving our economy. When we launched Be in 2005 people questioned why you needed 24Mbps, now that speed is the norm. Giving people gigabit speeds via fibre-to-the-home future-proofs businesses and consumers for the new wave of products and services that will continue to transform our lives."


Where does this leave us? It seems that technologists, the public and the media favour faster internet. However politicians and campaign groups want HS2. As Professor Cochrane said earlier, we shouldn't be in an either or situation. But a lack of strategic thinking, foresight and fear of anything technical has made it into one. The country needs both, but we're getting a very costly one-and-a-half.




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