Government Policy on Next Generation Broadband

By Louise Lancaster at Ayres End Consulting

In May 2010, following a general election, a new Government, a coalition of the Conservative and Liberal Democrat Parties, took office.  The Coalition Programme for Government promised:

“We will introduce measures to ensure the rapid roll-out of superfast broadband across the country. We will ensure that BT and other infrastructure providers allow the use of their assets to deliver such broadband, and we will seek to introduce superfast broadband in remote areas at the same time as in more populated areas. If necessary, we will consider using the part of the TV licence fee that is supporting the digital switchover to fund broadband in areas that the market alone will not reach.”

Jeremy Hunt, the new Minister for Culture, Media and Sport, gave his first speech on the media and broadband sector in June 2010.  He referred to the Labour Government’s legacy as a “paltry 2 Mbps universal connection”.  He expressed the view that, “Superfast broadband is not simply about doing the same things faster. It’s about doing totally new things – creating a platform on which a whole generation of new businesses can thrive.” He signalled that plans would shortly be announced to bring superfast broadband to rural and hard to reach areas and concluded with a simple goal:  “Within this parliament we want Britain to have the best superfast broadband network in Europe.”  Much debate ensued about what “best” might mean.  It was subsequently explained that this did not necessarily refer to speed alone, but would refer to a basket of measures.

Mr Hunt’s policy was fleshed out at an Industry Day on 15 July 2010, hosted by Broadband Delivery UK (BDUK).  The 2 Mbps USC deadline was pushed back from 2012 to 2015, but this was not necessarily bad news.   The 2009 Digital Britain report had identified an under-investment in backhaul networks (i.e. the section between the local telephone exchange and the central backbone network) which needed to be addressed.  Now the Government was expressing an intention to remove barriers to investment by encouraging shared use of infrastructure such as public sector networks and BT’s ducts and poles, and by easing obstacles thrown up by street works, wayleaves and State Aid processes.  They made it clear that the minimum 2 Mbps would only apply to an “irreducible core” of 160,000 or so premises.  The rest of the country would be served by superfast broadband and BDUK would oversee a procurement process with local and regional involvement.

In order to understand potential commercial models in detail, BDUK announced a Theoretical Exercise.  Suppliers were invited to propose complete solutions for three real rural locations (in the Highlands of Scotland, Lancaster and South Wales).  From this work, BDUK would develop commercial models, from which they would begin a procurement process to fulfill the universal Service Commitment, using 2 Mbit/s as a minimum but not necessarily a maximum.

BDUK also heralded the superfast broadband “pilot” schemes, which would be procured in the first half of 2011 and delivered from Q3 2011.  Superfast broadband was described as at least 20 Mbps, though both Jeremy Hunt and BDUK expressed the view that we should be aiming for 50 Mbps by 2015 and that speeds of 200 Mbps were expected by 2025. 

In the Comprehensive Spending Review on 20 October 20 2010, the Government announced that the first four pilot projects to be run by BDUK would be in the Highlands and Islands, North Yorkshire, Cumbria and Herefordshire.  The funding for this was being redirected away from the BBC.  £230m was the underspend from the Digital Switchover scheme, and the BBC would be required to contribute a further £150m in 2013-14 and 2014-15, bringing the total to £530m.  This could be increased to £830m if the BBC is required to contribute the same amount in 2015-16 and 2016-17 (which is when this current settlement with the BBC expires).

On 6 December 2010, BDUK published the conclusions and lessons learned from the theoretical exercise, alongside a policy document Britain's Superfast Broadband Future, which sets out the government's vision for superfast broadband networks in the UK and describing the measures it will take to achieve this.

In May 2011 Jeremy Hunt reiterated that vision by announcing that 90% of homes and businesses should have superfast broadband (which he clarified to mean at least 25 Mbps downstream) by 2015.  Mr Hunt has also emphasised the need to consider wireless, as well as fixed, networks.  He believes that superfast broadband to be "super-flexible" to keep up with the increasing use of broadband-on-the-move.

Meanwhile BDUK have now published their Programme Delivery Model which provides detail on how BDUK will help deliver the government's broadband policy goals. 

 

Louise Lancaster is an independent consultant providing practical advice on telecoms regulation, interconnect, public policy and commercial contracts.

After qualifying as a solicitor at a City firm in 1994, Louise worked as an in-house lawyer, regulatory and government affairs adviser for a number of telecoms companies, before becoming a consultant in 2003.  She has experience in Continental Europe and the USA and her clients include traditional network operators, specialist service providers and trade associations. 

She has been a member of the Council of ITSPA, the Internet Telephony Service Providers’ Association, since 2006.  She provides advice to INCA on regulatory and public policy matters.

www.ayres-end.com