This piece from Tom Watson is excellent. I can’t think of more than one other pol who understands mobile networks as well, and the other one knows more about fixed. Perhaps Watson is just well advised, but then picking good advice is a very important skill. On this strength, he’s the second best mobile analyst in the Northern Soul community.
He doesn’t, though, link to the news story that kicked the whole thing off. It’s here, at the FT. Apparently, David Cameron has:
has ordered ministers to improve mobile phone coverage across the countryside after becoming frustrated about the lack of reception in the often core Conservative-voting territories.
Ordered, eh? I thought he believed that free markets work. Presumably the Ministry of Medium Machine Building will be assigned to implement this decisive contribution to socialism. Maybe Cameron will show up at work to provide me with on-site guidance, like the North Koreans do.
The motivation is purely personal:
“We were requested to meet Maria Miller after complaints from David Cameron and Owen Paterson that calls were dropping,” said one. “Apparently this was an issue that grabbed the attention of the cabinet.”
Imagine the crimson tide that must have flowed. It’s also crassly cynical:
Mobile groups were asked to examine the costs of coverage to villages in Shropshire, Dorset and Norfolk – all with almost exclusively Conservative MPs – although work then focused on just using Shropshire as a pilot area.
Cameron’s solution, as Watson and the FT both say, is to impose a national roaming requirement on the networks. So if your phone doesn’t find Vodafone, it picks the next strongest signal, like it does under international roaming. This sounds nice, but it’s not as clever as all that. First of all, it doesn’t help you if there is no coverage from any network.
Between the 5 or 4 UK networks, depending on whether you still count Orange and T-Mobile as independent entities, there are actually only two-and-a-half sets of so-called passive infrastructure like land, towers, power and such. Vodafone and O2 share theirs under Project Cornerstone, T-Mobile and 3UK under Mobile Broadband Network Ltd, and EE’s 4G network is mostly parallel to MBNL, but also includes some original Orange sites outside it. There is also some complexity regarding how deep the sharing goes, but this is beside the point.
As a result of this, you’re less likely to find places where only one operator has coverage. Rather, you’re likely to get a dichotomy between places where both broad alliances are present, and none are.
Secondly, roaming in the mobile world implies compensation between carriers. If this is not regulated, it will be agonisingly expensive, because it’s intrinsically like a cartel. There’s no point unless everyone does it, which means there is no meaningful competition. The EU’s toughest women have spent a decade grinding this back cent by cent in the international domain. Watson notices this, which puts him way beyond most people.
Thirdly, if you can push traffic onto the competition and make a turn on the roaming, you’ll do it, so this gets rid of an incentive to build out more infrastructure. By now you’re probably wondering why we bothered to build four networks. The answer is that it would probably have been a good idea to share, but doing so requires the government to structure the market so that somebody will still bother to build out across the country. Back in the late 80s, infrastructure sharing wasn’t ideologically fashionable to say the least, and the successful example of fixed-line unbundling didn’t exist. It’s also true, though, that nobody then had any idea how this was going to turn out.
So here’s your problem: just throwing the switch on national roaming is rather like having infrastructure sharing, but without a population-coverage requirement, and also rather like unregulated international roaming. But there’s worse!
OK, who do you think will carry the most inbound roaming traffic? Obviously, the network with the most rural coverage. This won’t be the same as the one with the most base stations, because if you have spectrum in the original 900MHz GSM band, or even lower, in the 800MHz ex-TV band when that becomes available or even the 600s when they get auctioned, you automatically get a huge coverage boost from the fundamental principles of radio theory. You pay for this with a capacity/coverage tradeoff, though, so it might not please the countryside that much.
But it will make smaller operators subsidise bigger ones. This is a fundamental reality of a telecoms termination fee regime, where the network originating a call pays the network where it ends up. As a result, termination has monopolistic effects and is always regulated. OFCOM and the Euro-regulators have spent most of the last decade grinding it back. And now, we have a policy initiative that looks a lot like unregulated termination, with the downsides of roaming and of network sharing chucked in.
The worst of it, though, is the grisly contrast with the utter shambles of Cameron’s Broadband Delivery UK policy, which has so far failed to give a single contract to anyone other than BT and has also failed to deploy any end-user fibre. At the same time, community broadband projects that get public funding aren’t allowed to provide mobile operators with backhaul – i.e. the connectivity from the base station to somewhere civilised.
The market for very high speed leased lines, which is what you need, is officially unregulated even though in 85% of the UK there is a BT monopoly and in the rest, the only competitor is Vodafone, which can’t be expected to help its mobile competitors. You can follow this at BT whistleblower Broken Telephone‘s fine blog – I particularly like the bit where BT got central government money to overbuild a network the Welsh built with Welsh Assembly funds.
There are good things you can do with national roaming. Certain niche MVNO offerings and Machine-to-Machine applications can benefit. This guy used to sell Manx SIM cards to people who worried about per-operator black spots, but I think OFCOM made him stop for some reason. T-Mobile Netherlands used to do the same thing, but in tens of thousands, for machines. But this is niche stuff. Update: Revk points out that under the new EU rules, foreigners would get free roaming while UK residents would pay. I’d forgotten his mob offers you the option of switching to Vodafone.nl if you’re out of footprint.
Oh, and Tom Watson should be back in the shadow cabinet.