Openreach shows this isn’t just an infrastructure problem – it’s a government strategy crisis

Written as editor of the New Statesman’s NS Tech and first published here.

This morning, I appeared for (what turned out to be) a very short segment on BBC2’s Victoria Derbyshire show to talk about Openreach. Here’s what I would have said…

When you’re talking to people about internet connectivity, it’s a bit like having a chat about the plumbing in their house. They only really want to discuss it when things go wrong and even they’d be pretty happy to just leave it to the experts.

Infrastructure crisis

On Openreach specifically, the original deal was finalised a decade ago. When Facebook was still in nappies, many years before Snapchat was invented and even a year before the first iPhone came out.

Things have changed hugely in that time and it’s understandable that BT and others were not fully prepared for the explosion in digital services that many people have come to understand as the norm.

But it’s 10 years on and we do face a big question about whether our digital infrastructure is really serving our needs.

People I’ve spoken to in the industry say this was a “glorious fudge” at the time and that it is now “letting the country down”. Many wanted BT and Openreach to split entirely, although there’s some disagreement about what the new entity would look like.

But, after a year-long investigation, Ofcom outlined its plan today and is simply asking for greater separation.

That’s in spite of the fact that Openreach was roundly criticised by MPs for exploiting its position to further its own interests, which the committee says sacrificed both customer and shareholder benefit. That’s on top of them saying investment in Openreach has been flat since 2009 and that overall, the “quality of service remains poor”.

BT batted off these criticisms, but that was the analysis on the evidence given.

That’s not to suggest that Openreach doesn’t have a tough job. It looks after 30 million phone lines and says it attends 175,000 jobs each week. It now says that it only takes engineers two days to fix a problem, 84 per cent of the time, and can usually do a new installation within seven days…

It, of course, has shareholders expecting profit on their investment and has a £10 billion hole in its pension pot that no doubt keep senior staff there up at night! But, just as rival TalkTalk de-merged from Carphone Warehouse in 2010, this kind of separation isn’t exactly impossible.

BT’s chairman offered some compromises yesterday, in the shape of an independent board and greater spending power for Openreach around its investments.

Ofcom says it has gone further, calling for a new legal entity with a separate board that will be required to consult its customers (see: rivals) on new infrastructure investments without that information getting back to BT.

Ofcom has also reserved the right to revisit the issue, just as it did after a whole 10 years of living with a deal that’s seen by many as never being fit for purpose.

Watch this space, though, there will now be a consultation on the details, which you can get involved with (excited?) and closes on 4 October.

Skills crisis

On the wider picture, though, while this might all sound well and good, the government has been painting the UK as a leading digital nation.

And, not least in that it takes two days to fix a fault with a piece of plumbing that many companies and people now rely on as much as their toilet, we simply are not.

There are 12.6 million people in the UK, almost a quarter of the population, that lack the digital skills they need to use the internet properly; 5 million of those have never even been online.

And a total of 1 in 10 households still cannot get even the basic speed of internet the government says we all now need to participate in modern life.

The Digital Economy Bill is currently going through parliament and makes some provisions for getting that 10 per cent of households, some, if not good internet. That’s a (not entirely guarantee) 10Mbps, versus up to 10Gbps you can get in South Korea.

There are, of course, many great companies in the UK that aren’t quite household names doing interesting things to get fast internet to people faster than BT ever could.

Power to them.

As well as shopping, banking and entertainment all rapidly moving online, the government’s admirable ‘digital by default’ agenda means vital public services are all heading there too.

This certainly offers an opportunity to make cost savings, but the people that are most likely to need to access government services are also the ones who are digitally excluded.

And we barely even have the skills to build all those new, shiny government products here in the UK.

It’s been estimated that we’ll need as many as 2 million skilled workers for new digital jobs by 2020. Of course, coding is now compulsory at British school, but many teachers aren’t yet digitally savvy themselves and few people getting paid big bucks in tech would take the cut in order to teach.

MPs say this skills gap already costs the UK £63 billion a year in lost income. But who’d listen to them!

We may also lose many skilled workers from the workforce post-Brexit, many Europeans I know working in the tech industry somehow don’t feel welcome anymore, yet more gaps that need filling.

Since I started working in tech five years ago, we’ve been talking about a digital skills crisis. And there are organisations out there doing some good work, Doteveryone, Freeformers, but we don’t reallyhave a plan.

As much as it’s a challenge, this could be, really, a fantastic opportunity to finally skill up unemployed young people en masse, as well as those living in areas of the UK where other industries are in crisis.

Governance crisis

One other challenge to our digital future, that I’m sure Dido Harding, who I appeared on the show with, knows much more is the Investigatory Powers Bill, nicknamed the Snooper’s Charter.

Yet another change to our digital infrastructure that is being considered with worryingly little input from the public. The bill will, among other things, force Internet Service Providers like TalkTalk to keep all of our internet browsing records for a year.

Many people say “oh I’m not doing anything wrong, I don’t mind”, but we simply do not have the skills to protect those databases from hackers. As just one example, TalkTalk itself had 157,000 of its customers’ details stolen in October last year.

Harding, as a member of the House of Lords, is also working out the final details of this law that will require that sensitive data, perhaps medical, financial, is stored long term, ready to be swiped by criminals.

To be fair, she is one of the only members of the House of Lords with expertise in this area. One member, who is 83, admitted he is an “ignoramus” when it comes to digital.

It has been widely criticised by technology companies, the people that work in the industry, like the Openreach deal, but will probably quietly pass anyway.

Strategy crisis

Overall, we’ve been waiting on the Conservative’s new, fancy Digital Strategy for almost six months and now the relevant minister, Ed Vaizey, is no longer in government, so we could be waiting a long time yet.

For me, just as Brexit proved, we have a wider strategy crisis at the top of government.

Internet infrastructure was no doubt expected to be part of this new strategy, but where is the leadership on making sure that people have the right skills to access services?

Where is the leadership on making sure we have the people to build those services?

And who exactly decides what rules should exist in the digital age anyway?

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