UK broadband update July 2017

Policy developments:

• The Government launched its Digital Infrastructure Investment Fund (DIIF), further to announcements in the March 2017 Budget and 2016 Autumn Statement (also see this related speech). It is anticipated that the fund will more than double the Government’s £400 million investment to unlock over £1 billion of capital to support the wider rollout of fibre broadband services.
• The Government announced that BT had made a detailed voluntary proposal for delivering a universal broadband obligation (USO) of at least 10Mbit/s to premises across the UK. At the same time the Government issued a new consultation on options for a regulatory approach to delivering the USO. The Government will explore both BT’s offer and  whether a regulatory approach would work better for UK homes and businesses (more background on the broadband USO here). Earlier in the month Openreach announced a new consultation on options for the large scale rollout of fibre to the premise (FTTP) services.
• The Government announced 100% business rates relief for operators who install new fibre on their networks, to encourage further investment in fibre broadband networks and services. The 100% rate relief for new full fibre infrastructure in England will apply for 5 years and be backdated to 1 April 2017.
• The Secretary of State for Digital, Culture, Media and Sport Karen Bradley chaired the first meeting of the Digital Economy Council (DEC) on Monday 3rd July. The DEC has been set up to provide a forum for collaboration as Government works with leading industry figures on the implementation of the UK Digital Strategy and the development of a Digital Charter (more here). Its members include TechUK, Google, Facebook, Cisco, Dotforge, Coadec, TV Squared, BT and Apple.
• Digital Minister Matt Hancock signed the commencement order for the Digital Economy Act 2017 which achieved Royal Assent in April (more here). The Act includes measures to improve digital connectivity for consumers across the UK, cut the costs for new infrastructure and simplify planning rules to support greater coverage in some of the hardest to reach places in the UK.
• The Department for Environment, Food & Rural Affairs (DEFRA) announced the latest round of Rural Development Programme funding, including for the first time specific funding of £30 million to support new rural broadband projects. Grants will encourage growth by helping provide broadband services of 30Mbit/s or faster where not available or planned and will supplement existing Government investments in rural broadband.
• The Government announced that leading 5G research institutions at King’s College London and the Universities of Surrey and Bristol will be awarded £16 million to develop a 5G test network, with the aim of delivering a 5G end-to-end trial in early 2018.
• Highlands and Islands Enterprise (HIE) announced it has engaged independent consultants ekosgen to review the activities of Community Broadband Scotland (CBS) since it was established as a pilot project five years ago. The Scottish Government announced a new consultation on improving the quality of road works; see commentary on implications for network builds from ISP Review.  BBC News reported that the parliamentary constituency of Ross, Skye and Lochaber is the worst area in the UK for broadband, according to a new report from the British Infrastructure Group of MPs (see below).
• UK Government in Wales Minister Guto Bebb called for urgent progress to address rural Wales’ mobile ‘not spots’. Computer Weekly reported how Wales has become a global hotspot for cyber security innovation: “The country has become a UK leader in the sector thanks to the success of companies such as Alert Logic, Wolfberry, ITSUS Consulting and Pervade Software, which are hailing it as the prime location for the research and development (R&D) and commercialisation of defence and security products.”
• The Department for Culture, Media and Sport will continue to be referred to as DCMS in all communications, but is now the Department for Digital, Culture, Media and Sport.

Regulatory developments:

• Ofcom published a statement  setting out how Openreach will be held to account, as it becomes legally separate from BT, to ensure it delivers for phone and broadband users. Ofcom expects the reformed Openreach to “engage with industry to deliver widespread fibre networks, offering fast, reliable broadband. The new company should provide a good service to meet the needs of all the people and businesses who rely on its network, together with a step change in quality of service.” ISP Review reported on Openreach’s launch of new non-BT branding to demonstrate its independence from the rest of BT.
• The Competition Appeal Tribunal (CAT) found in favour of BT over Ofcom, in relation to Ofcom’s proposals requiring BT to make dark fibre available, following the regulator’s most recent Business Connectivity Market Review (BCMR). The CAT found that Ofcom had made mistakes in its definitions of the business broadband markets in which dark fibre access should be implemented, meaning that new proposals may now have to be prepared. See coverage from uSwitch, ISP Review, Out-Law and Ars Technica.
• Ofcom announced a new initiative to make it easier for communications customers to get better deals, launching a call for inputs exploring how to help less engaged customers to access the most cost-effective deals for their needs. Ofcom also announced that it would not now pursue a previously announced proposal to simplify switching services between Openreach, KCOM, Virgin Media and Sky: it concluded that “the costs are significantly higher than originally estimated, and…pursuing our proposed changes would not be in consumers’ best interests at this time.” See this previous post for more on consumer broadband developments.
• The Advertising Standards Authority (ASA) upheld a challenge from Virgin Media to reliability claims made in a Sky broadband advertisement. BBC News and uSwitch reported that the ASA has urged broadband providers to avoid making "tit for tat" complaints about competitors. See this previous post for more on broadband advertising issues; the ASA also announced this month that it is seeking “further consumer insights” to inform its “judgement of whether consumers are likely to be materially misled by the term ‘fibre’ when it is used in advertisements for part-fibre services” – see this previous post for more on this.
• A BBC Watchdog investigation found Virgin Media customers across the UK are receiving only a fraction of the broadband speed they were promised.

Other developments this month:

• The British Infrastructure Group of MPs (BIG), which brings cross-party MPs together to promote better infrastructure across the UK, published Broadbad 2.0, further to its first report published in January 2016. The report investigates the current state of broadband customer services and sets out the case for automatic compensation for customers receiving inadequate speeds. The report claims that as many as 6.7 million UK broadband connections may fail to receive speeds above the proposed USO of 10Mbit/s and calls for greater transparency and specificity in future datasets recording broadband speeds.
• A new survey of NFU members found that 85% of farmers have an unreliable outdoor mobile phone signal, 82% have an unreliable indoor mobile phone signal and just 6% have access to superfast download speeds.
• Finally BT reported findings by new home developer Berkeley Group that ultrafast broadband is now a ‘must have’ for new home buyers and is almost as important as running water and electricity.