Autumn Statement 2016: fibre & 5G

Today’s Autumn Statement by the Chancellor of the Exchequer set out the government’s commitment to the UK’s fibre and 5G future, as heralded in previous speeches to the Broadband World Forum and the Parliament and Internet Conference by Minister of State for Digital and Culture Matt Hancock .

The statement includes the establishment of a new National Productivity Investment Fund (NPIF) targeted at four areas: housing, transport, digital communications, and research and development (R&D). The NPIF will provide for £23 billion of spending between 2017-18 and 2021-22; the government will invest over £1 billion by 2020-21, including £740 million through the NPIF to support the market to roll out full-fibre connections and future 5G communications. Specific measures set out on pages 28-29 of the Statement are as follows:

• £400 million for a new Digital Infrastructure Investment Fund, at least matched by private finance, to invest in new fibre networks over the next 4 years, helping to boost market ambitions to deploy full-fibre access to millions more premises by 2020;
• a new 100% business rates relief for new full-fibre infrastructure for a 5 year period from 1 April 2017; this is designed to support roll out to more homes and businesses;
• providing funding to local areas to support investment in a much bigger fibre ‘spine’ across the UK, prioritising full-fibre connections for businesses and bringing together public sector demand. The government will work in partnership with local areas to deliver this, and a call for evidence on delivery approaches will be published shortly;
• providing funding for a coordinated programme of integrated fibre and 5G trials, to keep the UK at the forefront of the global 5G revolution; further detail will be set out at Budget 2017 as part of the government’s 5G Strategy.

More background on the government’s plans to stimulate broadband investment here and here.; also see this post for details of recent concerns over business rates on fibre optic connections. TalkTalk, Sky, CityFibre and Vodafone all welcomed the proposals while Virgin Media was critical, describing them in the Financial Times as a “drop in the bucket” in terms of what is needed to deliver full fibre networks. Speaking on BBC Radio 4’s Today programme BT chairman Sir Mike Rake said "We are committed to getting fibre to the premise ultimately, which is the long-term game, because it's much more reliable”. ISP Review gathered further responses from the telecommunications industry (more here).

Other industry groups also published responses. The Institution of Engineering and Technology (IET) was positive while the Institute of Directors (IoD) described the government’s 5G plans as “ambitious”, suggesting that “it might have been better to focus on spreading fibre to all of the UK’s 30 million premises, and ensuring universal 4G mobile coverage” and that trying to be a world leader in 5G “might be too much of a leap.” The Federation of Small Businesses (FSB) welcomed the investment plans but noted that “it is also important that the new Universal Service Obligation includes business premises to help those in the most hard to reach areas.”

Writing in the Evening Standard London Mayor Sadiq Khan called for the government to “show urgency tackling the painfully slow broadband speeds which are holding back large parts of the city. Without world-class connectivity to the internet, our cutting edge businesses will move elsewhere, taking with them well-paid jobs.”

Responses also came from  groups that have campaigned for better broadband in rural areas including the NFU:

“We note the announcement of £700 million into full-fibre connections and 5G. We are eager to see what this will deliver for the remaining 5% unable to access adequate digital infrastructure at the moment – many of whom are in rural areas.”

From the Independent Networks Cooperative Association (INCA):

“INCA’s members are building the new pure fibre and wireless networks that guarantee consumers and businesses will benefit from the best, future-proofed networks for many years to come. The support anticipated in the Autumn Statement will help the Altnets meet their challenging targets for 2020 and beyond.”

And from the Country Land and Business Association (CLA):

“The new £400 million Digital Infrastructure Investment Fund is overly focused on giving city based homes and businesses access to fibre to premises, hyperfast broadband. There is little comfort in this for rural people still struggling to get minimum connection speeds. Connecting the ‘final 5%’ of rural communities and businesses must remain the priority until the job is done. Action to reduce rates bills for fibre optic broadband infrastructure creates an opportunity to increase the affordability of roll out in more rural areas and we will press for the industry to deliver on it.”

Cable suggested that funds would be “better spent on bringing basic, reliable broadband to those struggling at the moment.”