TUC Recession Report No. 14

The TUC has published its most recent Recession Report, which can be accessed via Nicola Smith’s blog posting on ToUChstone here.

The headline facts are that 2.491m people are unemployed, at an unemployment rate of 7.9%. Unemployment has increased by 30,000 on the month and 608,000 on the year, while the rate is unchanged on the quarter but up by 1.9 percentage points on the year. The employment rate is currently 72.5%, with no change on last month or on the quarter, but down by 1.7 percentage points on the year.

So, the figures on unemployment continue to show a slowing trend but that recovery remains a good way off, with unemployment unlikely to fall for some time after the economy emerges from recession. Part-time working shows a sharp increase, partly as a result of involuntary part-time working; the number of discouraged workers  (those becoming economically inactive because they cannot find work, but who don’t as a result show up in the unemployment figures) is on the increase; and long-term unemployment is on the rise.

This month’s special focus of the report is the links between unemployment and physical and mental health, with a lengthy review of the literature on the issue (to which a commentator on the blog has usefully added further references). Evidently, unemployment adds insecurity and stress to everyone, including those out of work faced with increased money, security and relationship worries, while those in employment are faced with higher workloads and the fear of the dole. Individuals’ mental health can be fragile enough and the pressures caused by recession are often sufficient to deepen, as well as to widen, the worries which affect mental health. Reason enough, as the report argues, to require proper policy attention to unemployment and for a clear strategy to deal proactively with it.

BIS launches NextGen Fund consultation

The Department for Business, Innovation and Skills has launched a consultation on the Next Generation Fund as announced in the Pre-Budget Report (press release (and see reaction to the reference to ‘the market’ delivering access speeds of 50 Mbps to half the country here); full consultation). The consultation is intended to remain open until 1 April.

The Fund, which will be drawn up on the basis of a 50p/month levy on phone lines, is intended to provide high-speed broadband services in areas where ‘the market’ won’t deliver on the basis of these being, for want of a better word, ‘uneconomic’. (It was originally, in the final Digital Britain report, referred to as the ‘final third’ fund although, in view of current levels of roll-out plans, it seems more appropriate to refer to it as a ‘final three-fifths‘ fund.) This is in line with the Digital Britain aim of having 90% of the UK connected to high-speed broadband networks by 2017.

The consultation addresses a series of issues around how the Fund will operate, with the aim of providing

The basis for Government to take policy decisions, which in conjunction with the procurement team, will provide a framework for delivery of the Next Generation Fund.

Interesting reference here to the procurement ‘team’. This was referred to in Digital Britain as the Network Design and Procurement Group, later the Network Design and Procurement Company, and was due to be established under a CEO appointed in October 2009. This was then put back to ‘the new year‘ and it is thus somewhat odd to see this apparently more minor ‘team’ referred to instead. It would seem either that there has been some difficulties filling the posts, or else that the establishment of another quango in an immediate pre-election period was not perhaps the wisest move. The ‘team’ is not itself the subject of the consultation, but the latter will provide a basis for the next steps to be taken by this body.

The Connect sector of Prospect will be examining the document in detail and responding to its frequently quite involved consultation questions in due course.

Spectrum issues and the T-Orange JV

The Financial Times reported this week that O2 and 3 have told the European Commission that it is the UK authorities that are best placed to review the T-Orange joint venture, while Vodafone has also publicly commented on its view that the UK authorities are keen to review the spectrum aspects of the merger, an issue to which O2 also points.

These pages have declared their view on these issues already – it should be investigated in the UK, as the joint venture affects only the UK market and there are thus strong subsidiarity-related reasons why the EU should choose not to get involved – but the most interesting part of the FT‘s story is the bit relating to spectrum allocations.

Last summer’s report by the Independent Spectrum Broker included a useful chart documenting existing spectrum allocations, which I have reproduced below:

Vodafone and O2, as the two earliest operators from the mid 1980s, have some frequencies at the 1800 MHz level but frequencies here are otherwise dominated by T-Mobile and Orange, which appeared on the scene in the early 1990s. Vodafone and O2 have the only spectrum awarded at the 900MHz level while frequencies at 2.1 Ghz are the ones allocated for 3G services, which is where 3 comes in – it has none of the lower frequencies allocated earlier.

The key to understanding spectrum issues is that lower frequencies (like 900 Mhz) lend themselves well to quick network roll out because they cover longer distances, and thus requires less infrastructure (base stations and masts), and because their signals penetrate buildings better than those at higher frequencies (like 1800 MHz), which require more infrastructure and which are better suited to providing capacity in denser populated, urban areas. The less good penetration of signals at higher frequencies is the reason why 3G services are, in principal, suitable for mobile services outdoors and are much less suited to fixed installations inside buildings.

Ensuring a more even allocation of frequencies was the aim of Kip Meek, the Independent Spectrum Broker, on the grounds that allowing operators to trade frequencies between them would allow them all to choose the combination of spectrum that best suited their needs and which, as a result, would improve services (and access speeds). By ending the legal challenges by operators over policy on 2.6GHz frequencies (best suited for so-called 4G services), it would allow Ofcom to catch up with European counterparts on allocation.

The dominance of the T-Orange JV at the 1800 MHz level, and thus its ability to dictate the terms of spectrum trading between the operators, is the reason why the argument has been raised that the JV should concede 1800 MHz spectrum. Without necessarily going too far down that road, it is easy to see why the JV would blow apart the work done by the Independent Spectrum Broker in reaching his conclusions on spectrum trading. It thus becomes easier to see why it is the UK authorities that need to investigate this proposed JV: these are issues that properly concern the UK, not the EU.