The UK Government has stated that “within this parliament we want Britain to have the best superfast broadband network in Europe.”1 One way to support this goal is to use public sector networks and assets to reduce the cost of deployment. Correspondingly, we are seeing an alignment of Public Sector Network (PSN) and Next Generation Broadband (NGB) initiatives because of the financial pressures on the public sector.
From a political and non-political perspective, this alignment seems logical and simple but in practical terms, it may not be so easy to deliver.
The reason it seems simple is that there is a clear virtuous circle that stems from such an alignment (see Figure 1 below). People will need NGB to access online public services that require ever greater capacity, and NGB stimulates economic activity and employment opportunities as well as enabling social inclusion.
![Figure 1: The PSN and NGB Virtuous Circle [Source: Analysys Mason]](/PageFiles/16281/Comm_August-2010-Ian%20Adkins.jpg "Figure 1: The PSN and NGB Virtuous Circle [Source: Analysys Mason]")
Figure 1: The PSN and NGB Virtuous Circle [Source: Analysys Mason]
For this reason, public authorities such as Councils, the NHS and Police, are embracing the PSN concept. The PSN model is flexible, so there are many ways to secure financial savings or better value for money by sharing, or interconnecting, disparate networks. In general terms, there are two distinct models for a PSN, vertical or horizontal:
- The vertical model represents a county-wide PSN, therefore servicing mixed authorities such as County and District Councils, Health Authorities and Police forces within one county.
- The horizontal model would typically service a group of authorities with common boundaries, for example, a number of Police forces would create a PSN across multiple counties.
This is where it gets more complicated, because the nature of the PSN depends on the strategic objective for NGB (or 'superfast broadband') of the individual authorities that are forming the PSN. For example, Councils may be keen to include NGB within their PSN initiatives because of their economic development remit. Police forces, however, would have less incentive to take on such a challenge.
Whatever the profile of the network, to combine PSN with NGB there are a number of over-riding critical factors to be addressed relating to: public sector procurement; regulation and legislation in the competitive telecoms market; and State aid.
In effect, as soon as a PSN project includes delivery of NGB into its project objectives, the local authorities are in danger of intervening in the competitive telecoms market in some capacity, with regulatory and legislative implications.
In addition, there is the challenge of scale. A local, county-wide PSN is relatively small-scale compared to that of a typical broadband operator considering service provision at a national level. There is a risk that local broadband projects could lead to connectivity islands, leaving businesses estranged from the wider regional, national and global economy.
Nevertheless, given the relentless downward pressure on public sector budgets, there is a compelling need to find pragmatic solutions to unify the delivery of local PSN and NGB digital infrastructure.
Analysys Mason is actively discussing the opportunities of combining PSN and NGB initiatives with a number of public sector and telecoms operator clients. We are also supporting a number of local authorities in considering the options for PSN and NGB delivery, and are supporting live PSN procurement processes. During all of these assignments we are directly facing, and resolving, many of the issues described in this article.
1Jeremy Hunt, Secretary of State for Culture, Media and Sport, 8 June 2010