Communications sector panel considers broadband convergence
Discusses how industries will be reshaped by shift to broadband
As part of its work, the Panel has been thinking about what will happen when broadband Internet connections are available to all, and the impact this will have on the structure and relationships of a number of industries. The Panel has gathered its thoughts in a short discussion document, which is presented below.
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Discussion paper: broadband convergence
The rising dominance of digital communication technology for the delivery of services is driving a worldwide trend to 'convergence'. Convergence will involve using a single device for multiple services, for example one phone for the home, office and outdoors. But more significantly for the industry it will also involve accessing each service from multiple devices – for example watching TV at home, on a laptop or on a mobile. We note the popularity of the iPlayer and equivalents as showing the potential.
Most links will be point-point fibre-wireless, with the wireless providing the last drop to the user device, albeit perhaps of only a metre or two and in some cases owned by the user (like WiFi for example). The ideal architecture for unknown future services is, however, unpredictable so design-for-adaptability is key.
- Convergence will be incompatible with the current 'vertical' structure of the content industry in which content originators also control distribution, and will lead to an internet-style 'horizontal' business separation between the various layers such as content origination, publishing/broking, data transport and the supply of the receiving device and its software. So novel content or a novel service will not be tied to a particular decoder or physical platform, as is the case currently with Sky broadcasts, and a transport provider would normally support all devices.
- The money flows will need to be re-mapped onto the new industry structure in such a way as to create a satisfactory return for all parties whilst promoting competition. There are many opportunities as well as problems in this. It will require appropriate regulation aimed at creating a 'level playing field' and at defining a clear separation between the different layers with balanced regulation for both vertical services and horizontal layers.
- Although commonly seen as promoting equality in fact a converged broadband network may act in the same way as other improved infrastructure and tend to drive economic/social clustering & disparity as well as enhancing growth. It may also be incompatible with a realistic promise of universal (identical) service obligation. Governments need to take a view as to the possibly divisive impact of any developments and put in place appropriate balancing measures.
- The impact of convergence and the delayered industry structure on innovation in the creative industries will be a vitally important issue, both socially and economically, improving the user experience.
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