UK Chancellor of the Exchequer Rishi Sunak has effectively confirmed that Britain’s gigabit-speed broadband plan has been rolled back, as part of the government’s Spending Review, with industry observers expressing disappointment and confusion.
The aim has changed from “every home” by 2025 to “minimum of 85 per cent coverage” by 2025. The budget of the plan remains at £5 billion, but only £1.2 billion of that sum will be made available up until 2024.
“Today’s announcement indicates to us that the Government will be relying more heavily on private investment into the country’s full fibre infrastructure over the next few years,” commented Graeme Oxby, CEO of London based full-fibre Internet provider, Community Fibre. “Community Fibre remains focused on enabling as many properties in London with full fibre as soon as possible. Irrespective of the Government’s plans the private sector investment is already in place for London’s properties to be 100 per cent full fibre enabled by 2025. However, the target is only achievable if London’s Landlords grant the necessary permissions needed to bring full fibre to their properties. Community Fibre already has the permissions it needs from seven of London’s top ten landlords and is happy to guide other landlords through the simple process of having their properties upgraded with 100 per cent full fibre-optic broadband.”
Trade body the Internet Service Providers Association (ISPA) expressed disappointed to see only a quarter of the Government’s committed spending on broadband allocated across the next four years in the review, suggesting this was a “considerable” change in policy direction which seemed entirely out of step with the Government’s commitment an ‘outside-in’ approach and ‘levelling-up’ agenda.
According to the ISPA, the industry is entering the key deployment phase for the UK’s gigabit-capable network and immediate clarity on how and when the remaining £3.8 billion of funding will be allocated is critical as providers look to recalibrate their build plans, recruitment and investment decisions.
“Today’s announcement scaling back the Government’s ambitions for supporting broadband rollout in the hardest to reach areas is a blow to rural communities,” declared Andrew Glover, ISPA Chair commented. “Instead of aiming for nationwide coverage, Government now expects coverage of 85 per cent and with only a quarter of the previously promised funding allocated until 2025.
“This will not stop providers from continuing to press ahead with their commercial rollout plans, but it puts an even greater emphasis on tackling the regulatory and practical barriers that make rollout more difficult than it should be.”
“As our experiences over 2020 have proved, our broadband infrastructure is fundamental to propping up the UK’s economy in periods of lockdown, so we urge the Government to ensure that this policy pivot does not lead to longer term digital exclusion of those in harder to reach areas,” he concluded.
Malcolm Corbett Chief Executive of the Independent Networks Cooperative Association (INCA), which represents the UK’s altnets, suggested that the whole point of the Outside-In funding programme was to ensure that hard to reach areas don’t get left behind in the massive upgrade to the UK’s digital infrastructure. “Build plans by Openreach, Virgin Media and altnet challengers have been ramping up, but we agree that reaching 100 per cent by the end of 2025 was always going to be difficult,” he admitted.
“The government has recognised that completing a full commercial build and tackling the subsidised harder to reach areas at the same time is very challenging. Having spoken with officials, our understanding is that the £5 billion of funding committed in the National Infrastructure Strategy is ring-fenced and if more of that funding can be brought forward into the Spending Review period, that will happen.”
The ambitious target date of 2025 for 100 per cent coverage across the UK was set by the Prime Minister, originally as full fibre coverage, but later changed to include Virgin Media’s cable network and some wireless broadband services. The National Infrastructure Strategy, published as part of the Chancellor’s Spending Review, has changed the target. “The government is working with industry to target a minimum of 85 per cent gigabit capable coverage by 2025 but will seek to accelerate roll-out further to get as close to 100 per cent as possible”, the Review says.
The government expects the private sector to deliver gigabit-capable broadband to around 80 per cent of homes and businesses in the UK. For those rural and remote areas of the UK where the commercial cost of connecting premises is considered to be too high, subsidies from government are to be provided. For more than a year, the sector has been told that £5 billion would be allocated to ensure no homes and businesses were left behind in the gigabit digital revolution. However, the Chancellor’s Spending Review allocating just £1.2 billion in the period to 2021-25 came as a surprise to all in the industry.
“The importance of renewing the UK’s digital infrastructure is well known in government – indeed National Infrastructure Strategy is peppered with references to gigabit broadband. Industry is stepping up to the task. INCA estimates that investment in the challenger firms will reach £7.7 billion by 2025/6 taking the total private investment to around £25 billion including BT/ Openreach and Virgin Media. This investment is based on the expectation that government will play its part too,” Corbett concluded.
“We’re absolutely supportive of the Government’s plan to roll-out gigabit connectivity to 100 percent of UK homes and businesses as quickly as possible,” asserted Gareth Williams, CEO at rural broadband provider Gigaclear. “The importance of connectivity has been sharply underlined by the events of 2020, but it is a huge undertaking and it has to be done right. In the meantime, we’re continuing our work to bridge the digital divide and connect as many rural areas as we possibly can.”
“It is disappointing to hear that only £1.2 billion of the £5 billion put aside for the expansion of gigabit capable coverage will be made available between now and 2024/25, but these programmes are so large that it’s important there’s enough time to get them right.”
“Provisions still need to be put in place to ensure that the funds are allocated fairly and efficiently. These conversations are happening within government and Ofcom right now and affording more time to get the rules ironed out and properly in place is no bad thing.”