Manchester playing digital catch-up with the rest of the UK

beggers August 10, 2014 0
Manchester playing digital catch-up with the rest of the UK

Manchester is striving to join the A-list of global megacities. It’s not uncommon for civic leaders to want to rub shoulders with counterparts in Seoul, New York and London, yet for Manchester it is a plausible ambition. It ranks second to London in output and its rise over the past 20 years means its economy is more than double the size of Birmingham’s.

Manchester’s ambition was evident last week when George Osborne mapped out a transport network that will link the city with Liverpool, Sheffield, Leeds and Newcastle to foster growth and promote regeneration. Osborne said better transport links were the best way to prevent the north falling behind the increasingly well-off and productive south, and pledged £15bn for new road and rail networks and science parks to attract inward investment.

The hope is that better connections will help a Greater Manchester economy that, using the gross value added (GVA) measure of output, accounts for £51bn of the UK’s annual £1.3tn GVA. That comfortably outdoes Birmingham’s £21bn, though it is a long way behind London, with its £309bn GVA.

Yet with those transport links possibly decades from being built, Manchester needs a more immediate boost. And it could get it from a more important facet of infrastructure: broadband.

Days before Osborne backed the great city constellation in the north of England, Manchester’s transport authority brought to a close a public consultation to discover the area’s broadband weak spots. Without a decent broadband service, local officials know, there is little hope of preventing the gap with London widening further.

Comparison site says Manchester city centre “is not as well-served by broadband as it could be” and that although speeds of up to 10 megabits per second (Mbps) are bandied about, “the reality is that most users are experiencing a much slower delivery of around 2Mbps”. This is adequate for many uses but means two minutes of video take up to 60 seconds to download.

The study, which cites a target for a minimum 2Mbps across the city by 2020, is expected to find Salford and Eccles poorly served, while eastern suburbs such as Failsworth, Clayton Vale and Droylsden can enjoy 11Mbps.

The UK does appear to be lagging behind major competitors in broadband access. A state of the internet report by consultancy Akamai shows that in the first quarter of this year South Korea topped the league, with an average of more than 23Mbps. The Netherlands, Belgium, Sweden and Latvia are in the top 10 on most measures of speed or capacity. As the report’s author, David Belson, says, these countries have small, relatively affluent populations so are fertile ground for private providers. Larger countries with wider disparities of geography and income have a tougher time: the UK, with an average 9.9Mbps, is not far behind Germany and France.

“Manchester’s target of 2Mbps is not very challenging,” he says. Anita Greenhill, a lecturer in technology management at Manchester Business School is less polite. “As a target, it is pathetic, especially when you see that France has set a target of 100Mbps by 2020.”

But even with this target, Manchester will be hampered, because European Union rules on state aid prevent local councils from banding together to install their own service. Unlike with road and rail infrastructure, governments cannot inject money into broadband in areas where there is deemed to be sufficient competition from existing providers.

Under this rule, the government has been able to spend billions on linking rural communities to the main grid of fibre-optic networks because there is little competition there, but cities are tied to the pace set by the private sector. Experts say BT and Virgin are moving ahead with street-by-street broadband, but see little return on the investment in central Manchester when the number of households and businesses that can pay for a premium service is relatively small. Getting permission to dig up pavements and roads in central areas is also difficult. And the rural programme is diverting much of BT’s resources into the shires.

Sir Howard Bernstein, the longstanding chief executive of Manchester city council, says a fast and reliable broadband network is key to plans for the city’s future. He would like to spend taxpayers’ money to upgrade the local network.

“I can’t get round rules that stop us from making these investments,” he says, “so our role is encouraging and supporting people to upgrade their systems.” Unlike London, his city lacks the breadth of profitable companies that encourages speculative investment by telecoms firms. BT is piloting a cheaper way to install broadband, without large green boxes on the street – but it is taking the technology to London’s Shoreditch after a campaign by Tech City, the digital business community in east London.

The City of London has also woken up to the drawbacks of focusing on road and rail links to the detriment of digital infrastructure. The chairman of its policy and resources committee, Mark Boleat, said recently that the slow rollout of high-speed internet in the Square Mile was stunting growth.

He warned that working practices are changing, with smartphones and cloud computing making it easier for entrepreneurs and workers to mix travelling to the office and homeworking. “It vividly illustrates the importance of fast, reliable communications,” Boleat said.

He is also conscious that a few miles to the east, Canary Wharf already boasts a higher-grade system.

Yet all these crucial business districts, Manchester included, need not only their own high-speed networks, but also access to a general network without bottlenecks. They could learn from the US, which has climbed up the league table (its average speed is 11Mbps) with a mixture of private and public installations. Phone companies jostle with Google to offer high-speed broadband, sometimes in competition with town and city administrations.

Kansas City injected millions of dollars into its local broadband network to reach average speeds of 30Mbps before lobbying by private providers convinced state politicians to block further investment. It was one of many public agencies to see the need for a backbone of fibre that everyone can access. There are now EU-style state-aid rules in 20 US states, but in May regulator the Federal Communications Commission said it was looking at refusing further bans to prevent a slowdown in cable laying.

But in the UK Manchester must struggle on, relying on BT and Virgin and without the vast private investment that arrives in London every day. Bernstein says the economic situation is improving and businesses are committing more cash to investment: “We all have to fight very hard for investment money. And it is clear that money follows money. But as equity rises in Manchester we are seeing more activity and more demand for high quality services.”

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