UK broadband update October 2017

Infrastructure news:

The National Infrastructure Commission (NIC) published its interim National Infrastructure Assessment, reporting that the UK lags behind countries including the USA, the Netherlands and Japan for 4G and broadband speeds and noting that “the failure of our digital infrastructure to provide reliable phone and internet service is especially serious.”

The assessment recommends that Government tackle the ‘three Cs’: congestion, capacity (including ensuring everyone has access to the latest digital communications technology) and carbon. Building a digital society with fast, reliable data services everywhere is one of seven priority areas for action set out in the report;  the NIC will consider how to reduce the costs and maximise the benefits of deploying more fibre, whether the regulatory framework is sufficiently focused on investment and how to ensure rural areas do not continue to lose out in the long term. Responses to the assessment’s recommendations are invited by 12 January 2018 to inform the NIC’s final assessment, to be published in 2018.

Also this month the 2017 CBI/AECOM Infrastructure Survey reported that both business and the public are concerned about the pace of delivery, with a record number of firms dissatisfied with the state of infrastructure in their region. Businesses’ views on future improvements to digital infrastructure are on balance positive, though regional variation is high. Sixty-seven percent of respondents identified faster and more reliable connections as their most critical business priority and almost all businesses (98%) believe that strengthening Britain’s cyber resilience is vital. There are concerns about the UK’s approach to cyber security with just under a third (32%) of businesses feeling confident in the current strategy.

The Department for Digital, Culture, Media & Sport (DCMS) announced the introduction of draft regulations to Parliament to commence reform of the Electronic Communications Code in order to speed up the rollout of mobile and broadband services. The changes will bring down the rents telecoms operators pay to landowners to install equipment, make it easier for operators to upgrade and share their equipment with other operators to help increase coverage and make it easier for telecoms operators and landowners to resolve legal disputes. The new Code, reformed through the Digital Economy Act, is expected to take effect in December 2017. Also see commentary from Out-Law.

DCMS also announced the 5G Testbeds and Trials competition, a £25m initiative that is part of the Government’s £740m National Productivity Investment Fund (NPIF) to support the next generation of digital infrastructure, including 5G and full fibre broadband. The Government is encouraging interested parties from all around the UK to put forward test locations and project proposals for match funded grants of up to £5 million; also see the prospectus for 5G testbeds and trials. Also this month the Cambridge Judge Business School published a new report on the cost, coverage and roll-out implications of future UK 5G networks; it suggested that 5G will reach 90% of the UK population by 2027, but coverage is unlikely to reach the final 10% due to exponentially increasing costs.

The Welsh Government published a new action plan to improve mobile connectivity in Wales. It focuses on nine key areas where the Welsh Government can use the levers at its disposal and its influence to help improve connectivity and capacity, including reforms to planning, use of public sector assets as sites for mobile infrastructure and the potential for reducing non-domestic rates for new mobile infrastructure.

The Scottish Government announced that more than 800,000 premises in Scotland can now benefit from fibre broadband, following 34,000 new connections in the last six months. The £428 million Digital Scotland Superfast Broadband (DSSB) scheme is on track to meet its coverage target of 95% by the end of this year.

Regulatory developments:

The Telegraph and ISP Review reported that  Culture Secretary Karen Bradley has written to Sharon White, the chief executive of Ofcom, suggesting that Ofcom’s proposed charge controls on Openreach’s wholesale pricing of up to 40Mbit/s fibre to the cabinet (FTTC) services risks disincentivising investment in new full fibre to the premise (FTTP) networks. More background on this here and here; the letter suggests that Ofcom’s proposals may be “at risk of not striking the right balance between ensuring appropriate consumer prices while driving necessary levels of long-term investment in the networks.”

Earlier in the month ISP Review reported Sharon White’s remark to the DCMS Committee inquiry into the work of Ofcom that a “key test” for the reform of Openreach is whether it enters into a co-investment deal with a rival operator.

The Telegraph reported that the Government is facing new scrutiny from the European Commission in relation to BT’s payment of business rates; European competition authorities have called on the Government to defend its tax treatment of BT’s telecoms infrastructure against claims it favours it over rivals.

USO developments:

The Financial Times reported on new details from Openreach on their Universal Service Obligation (USO) proposals. Openreach’s offer will cost the company between £450m and £600m, which it expects to address through higher wholesale charges. The offer is dependent upon Ofcom easing regulation in the wholesale access market. Openreach expects that 98.5% of homes and businesses would be connected to a fixed broadband line by 2020 and 99% by 2022.

ISP Review reported that ISPs  including Sky Broadband, TalkTalk, Hyperoptic and Gigaclear are considering a possible legal challenge if the Government chooses to adopt Openreach’s USO proposals. The Telegraph also reported that legal advisers have raised concerns with the Government that Openreach’s offer could be challenged in the courts as unfair state support.

uSwitch reported remarks by former Liberal Democrat leader Tim Farron that the Government’s 10Mbit/s broadband USO lacks ambition.

The Law Society of Scotland suggested that aspects of the USO  mean it is unlikely to meet the needs of more remote rural communities in Scotland (more here): “We are concerned that the proposed design of the USO will have a particularly negative effect in the Scottish context where there is a higher proportion of rural communities than in other parts of the UK.”

Consumer broadband:

Ofcom announced new proposals to enhance its existing codes of practice on broadband speeds to improve the information available to consumers. These include improving speed information at the point of sale and in contracts, by reflecting the slower speeds people can experience at peak times (8-10pm for residential customers, and 12-2pm for businesses),  and by ensuring providers always give a minimum guaranteed speed before sale.

The Social Market Foundation (SMF) think-tank published a new report suggesting that big companies in sectors such as broadband, mobile telephony and personal banking do not face enough competition, resulting in a lack of choice, higher prices and underinvestment for consumers.

The latest broadband customer satisfaction survey from Which? found that more than half of households experience problems with broadband, with customers of Virgin Media, Talk Talk, Sky and BT most likely to experience an issue. Slow speeds were the biggest problem overall, with one in five experiencing difficulties.

Other news:

PublicTechnology reported that NHS Engand has commenced the established national system through which local and regional healthcare providers could procure online doctor’s consultation services via a prior information notice.

DCMS published a new green paper on Internet safety, setting out new proposals to make the UK the safest place in the world to go online. Proposals include new measures to ensure a joined up approach to remove or address bullying, intimidating or humiliating online content on social media and support for tech and digital start-ups to ensure necessary safety features are built into apps and products at the outset.

The Government published findings from the industry-led Made Smarter review, chaired by Siemens UK CEO Juergen Maier, exploring how UK manufacturing can maximise benefits from increasing the adoption of digital technology through a strong industry and government partnership.