UK broadband update October 2016

Policy developments:

• In a speech to the Broadband World Forum, Minister of State for Digital and Culture Matt Hancock set out the Government’s broadband ambitions, focussing on the importance of continuing to improve both the capacity and coverage of the UK’s fixed and mobile communications. He acknowledged that the decision to roll out superfast broadband based on fibre to the cabinet (FTTC) technology was the right one at the time, based on upgrading connectivity for as many premises as possible, but also flagged that “the future is fibre…it is a case not of if, but of when.” G.fast and upgrades to DOCSIS were described as “interim technologies”; he went on to say that “around the world the evidence increasingly points to fibre roll out as the underpinning of a digital nation.” The Government’s role is to support the market to deliver the necessary investment in new infrastructure; also see commentaries from Computer Weekly and ISP Review.
• In her speech to the Conservative Party Conference, Prime Minister Theresa May said that the Government should be prepared to intervene in “dysfunctional markets”, citing the poor broadband services available to rural homes and businesses as an example of such. See commentaries from ThinkBroadband, the Guardian and Ars Technica; a few days before her speech, the Telegraph reported that the Government was considering new ways to deliver major broadband upgrades nationwide, including the possibility of taxpayer subsidies: “Discussions are being held with telecoms industry players over options such as a taxpayer investment in fibre-optic upgrades that would be paid back by the market over time, potentially at a profit to the Exchequer. The work is going on alongside more advanced efforts to secure upgrades for rural areas.”
• Computer Weekly and ISP Review reported remarks by BT’s chief strategy officer Sean Williams to an Parliamentary evidence session in support of the Digital Economy Bill that BT plans to deliver universal coverage without the need for legislation or public funding; also see written evidence submitted by BT.
• Also this month the Government commenced a consultation on the European Commission’s proposals for a new European Electronic Communications Code and announced Matthew Gould as the UK Government’s first Director General for Digital and Media, based in the Department for Culture, Media and Sport (DCMS). He has been tasked with “overseeing the Department’s digital and media policy brief, which aims to equip the nation with the skills and technology it needs to create tomorrow’s world-leading digital businesses. He will also work to make sure everyone can enjoy the benefits of modern technology.”

Campaigning:

• The British Chambers of Commerce (BCC, also see the Telegraph) appealed for the Government in advance of its forthcoming Autumn Statement for “direct investment in ‘quick-start’ infrastructure projects such as housing and broadband – to ‘crowd-in’ private sector investment in infrastructure, regeneration and growth.” This would help firms take risks and seize opportunities despite the ongoing uncertainties over Brexit. See commentaries from ITPro and ISP Review.
• The Local Government Association (LGA) called for the forthcoming 10Mbit/s broadband Universal Service Obligation (USO, also referenced in Matt Hancock’s speech) to include a social tariff to ensure that basic broadband services are affordable for those most in need. The LGA suggested this is increasingly important as more and more government services are provided digitally. The announcement builds on the LGA’s Up To Speed campaign for better broadband.
• A new report by the Institute for Public Policy Research North (IPPR North) found that SMEs in the Northern Powerhouse lag behind other businesses in terms of their current digital capacity. The main obstacles are lack of access to high speed broadband and a lack of the skills needed to do more online. Recommendations set out in Unbuffering Business include improving SMEs’ digital capabilities and ensuring that business parks and enterprise zones are prioritised in broadband roll-outs.
• Farmers Weekly reported initial findings from a survey by the National Farmers Union (NFU) on rural broadband, which suggest that rural broadband and mobile phone coverage are not improving fast enough. The Farmers Union of Wales (FUW) also flagged that there is still much to do to improve rural broadband performance and coverage in Wales.

Broadband facts and figures:

• ISP Review and ThinkBroadband reported on UK superfast broadband availability and takeup; many local authorities are seeing 30% adoption of new superfast services. ThinkBroadband’s analysis shows that 91.6% of premises can access a superfast broadband connection faster than 24 Mbit/s.
• Analysys Mason published a new report commissioned by BT which shows that the UK is expected to continue to lead the EU's five largest economies on a range of fixed broadband measures in 2020. The research found that UK availability of ultrafast services offering 100Mbit/s and above is expected to increase from 50 percent to 85 percent over the next few years, with an expectation of the UK being second in the EU five by 2020. The report also questions the viability of a third fibre to the premises (FTTP) network alongside Openreach and Virgin Media infrastructure: Ofcom in its Strategic Review of Digital Communications earlier this year said a good outcome would be the achievement of full competition between three or more networks for around 40 per cent of UK premises (more on this here, see section 4.32 on page 39). Also see commentary from ISP Review.

Other news:

• BBC News and Computer Weekly reported on the impact of proposed increases in business rates on fibre optic cable set out by the Valuation Office Agency (VOA). The new rates will come into force in April 2017; operators have expressed concerns that they will have to raise prices as a result and future investment could also be affected.
• Highlands & Islands Enterprise reported on a visit by Ofcom Chief Executive Sharon White to the community project Badenoch Broadband, based in Laggan, which has been providing wireless broadband services since 2012. The National reported that the Highland Community Broadband (HCB) project has commenced its network build following £85,000 being raised by founder subscribers. Also this month the Government published new guidance on establishing community broadband schemes.