Small Island – big vision for internet connectivity
In Jersey, the world's first full-fibre roll-out has just been completed and while many of us might take our broadband service for granted, there are a lot of people and businesses outside the Island who are sitting up and taking notice. The boardof LONAP, the London Network Access Point Organisation, have just held their strategy meeting in the Island - and they didn't just travel herefor the beaches and hotels. Business editor Gwyn Garfield-Bennett went to meet LONAP chairman, Trefor Davies, and his host, Graeme Milar, chief executive of JT
LONAP is a not-for-profit organisation whose members include the likes of Amazon, BBC, Microsoft, Twitter and MoneySuperMarket.com, as well as a host of internet service providers. They are an internet exchange point, the physical infrastructure through which their members can exchange traffic between their own networks. ‘We are basically the core of the internet,’ says Mr Davies, and the advantages are faster speeds and lower costs which make the services we receive so much better.
The board of LONAP is in Jersey for a strategy meeting, something they do every couple of years: ‘We look at our own business from a corporate governance perspective for the benefit of members because the internet is a constantly changing and evolving platform. The saying goes that the internet reinvents itself every three years. So we have to have these meetings where we can kick back and have a chat about what life is about, where it’s going and what are the threats and opportunities and how we want to change things to move with the times because, to a certain extent, we are the people that people follow.’
JT isn’t a member of LONAP, our little Island’s usage is small fry compared to some of the members of LONAP whose budget for connectivity runs into billions of dollars a year. JT interconnects in London so that we, the consumers, can get access to the content providers without interruption, but they do so via a third-party exchange which then connects to LONAP.
We might be small fry in terms of usage, but we are world leaders when it comes to vision with regards to our connectivity, says Mr Davies: ‘It’s fantastic what they are doing in Jersey now. Jersey is doing what the UK should have decided to do eight years ago. They didn’t do it because, first of all the incumbent in the UK was only interested in making a profit for their own shareholders’ benefit, so they couldn’t take a strategic look at things. And they didn’t do it, partly because the UK government was skint at the time, but also they couldn’t get their brain around what the business case for doing something like this would be – especially when their incumbent was saying, “You don’t need it”. Politicians just don’t understand what the internet is about.’
The fibre roll-out here hasn’t always been well received in Jersey with criticism in the past for delays in the programme and some have questioned the need for the investment. Graeme Millar, who has been at the helm of JT since 2010, leading the fibre roll-out plans, is rightly pleased with the recognition our Island’s connectivity is now getting.
‘We feel proud as an Island about what we’ve done because really what the fibre network does is it’s a foundation for the way that society is changing digitally,’ he said. ‘If you think about Digital Jersey and all the things that it’s doing in terms of supporting government, supporting e-health, helping new entrepreneurs who come to the Island and set up businesses. The fibre network doesn’t do that for the Island, but it enables it. It means that as we increasingly use the internet to make our lives better, the fundamental plumbing is there.’
Mr Davies says the roll-out has put Jersey in a great position: ‘The opportunity for Jersey is fantastic because you can determine your own direction and that’s what you’ve done in rolling out this fibre network. The only reason the full-fibre network is being considered in the UK is that other people have been getting on and doing it because they’ve seen there is a business opportunity. And the small companies that have been doing it have actually been attracting a lot of investment. They’ve been attracting very interesting valuations because the investor community sees this as a great long-term bet.
‘You’re also seeing that BT is having to do it. BT are rolling out a small portion of fibre over five years and running the flag up and saying we’re doing a big investment in fibre, and that’s only because other people have seen the benefit.
‘In reality the roll-out in Jersey is far better than it is in the UK. There are different factors in play. The UK’s got a really fantastic competitive market so you can get a very cheap, good cost-effective bundle for your communications. On the other hand, crashing the pricing means they haven’t got the money to invest in the future.’
So what kind of opportunity does this offer to Jersey?
‘First thing you’ve got this faster network. There’s a metric in the internet industry, things like how fast a web page will load. You can actually quantify the amount of money that is worth to someone like Amazon or someone like Google in terms of extra clicks and search engine revenues. They can say, “If we can get it to load ten per cent faster, this is how much money it will generate”. So when people start seeing what you can do with the infrastructure in Jersey, I’m sure it will start attracting investment from third parties wanting to establish themselves here because they can see how that will generate a business case.’
Graeme Millar says this is one of the reasons why they were keen to get Trefor Davies and the LONAP board over here. ‘Having built this infrastructure, a big job for the Island now is to publicise what we’ve done and make sure that internet companies and digital entrepreneurs know what’s here. LONAP is at the hub, so this is a great opportunity for us to showcase what the Island has to offer, and you know how it is, word of mouth is much more effective, even in these days of social media than Jersey plc taking out an ad in the Financial Times and saying, “Wouldn’t we be a great place to come”.’
So what’s next on JT’s planning list, apart from marketing the roll-out?
‘A couple of things. We’re now into what we call the copper sunset phase – we have done all the broadband connections in the Island but there are still some voice-only connections, people just using copper for voice, and over the next 12 months we are going to move those onto fibre. There are a small number of very slow old business connections, things like ISDN2s which we also need to move over to fibre, which we’ll do in the next 12 months.
‘So, in a way, the next big announcement you’ll see from us around about this time next year will be us actually turning off the old copper network completely for the whole of the Island. That will mean for the first time since Alexander Graham Bell invented the phone, in Jersey all the communications will be over glass and light rather than over copper and electrons.
‘Going beyond that, the way we’ve built the network means that we can introduce ever faster speeds. We’ve just gone from 100 to 250 meg minimum speed. We will continue to move that up to a gigabit over the next two or three years. We’ve built a gigabit network, we want everyone to use it, that’s why we’re doing the summer promotion. And, we have outline plans to start introducing 10 gigabit services in 2020 and beyond.
‘The way we’ve built the network means it’s now very cost-effective and quick to do further upgrades. We’re not going to have to dig up roads, or anything. To go from 1 gig to 10 gig we’ll need some new equipment in our exchanges and there’ll be a new white box to replace the existing white box on the wall of customers’ homes, for those people who want it.’
Mr Millar says that individual businesses have already been feeding back on how much the fibre roll-out has meant to them. ‘Someone who came to the Island a few years ago who has a big video production business is Dr Tessa Hartman. She and her husband have a business that involves post-production on big Hollywood blockbusters. When they lived in Glasgow it would take them eight hours to send one of their video files back to Hollywood. I think I saw a quote from her saying it takes six minutes here. She says this has completely transformed their business and their life.
‘At the end of the day on one level you can say it’s just a bit faster, it’s just a bit more reliable. Actually it’s a lot faster and a lot more reliable, but what does this mean? It means different things for individual business, but fundamentally it’s that businesses in Jersey can be confident that there is nothing that is possible today on the internet that they can’t do.’
Trefor Davies seems positively envious of Jersey’s connectivity: ‘This kind of service is perfect for when the whole content world starts moving to 4k and 8k, the really, really high-quality stuff. Jersey will be ready for it. It’s been really impressive chatting to JT about what they’re doing and I’ll go back home and look at what they’re doing in the UK and say, “Why haven’t we done this five or ten years ago?”, because it was still do-able then. There’s no reason why they couldn’t have done it then, other than the short-sightedness of the people involved.
‘I think the old saying, “build it and they will come” is really relevant here.’