Report Finds Poor SME Broadband Hampers the “Northern Powerhouse”

A new report from the IPPR North think-tank has claimed that small and medium-sized enterprises (SME) are lagging behind other businesses in the “Northern Powerhouse” (northern England) region due to a “double-whammy of patchy … broadband connectivity” and lack of digital skills.

The ‘Unbuffering Business‘ report, which mostly appears to echo older data and recommendations from other studies rather than construct its own research, notes that the national levels of broadband connectivity are “relatively high and improving.” However it also warns that smaller businesses are being “overlooked in the rollout of high-speed broadband.”

Extract from the ‘Unbuffering Business’ Report

Just under one-third (32 per cent) of all small business premises still lack access to superfast broadband (Ofcom 2015), and nearly one in five SMEs (18 per cent) will not have access to superfast broadband in 2017 (ibid).

Because premises in business parks and in rural areas are likely to incur higher costs to install broadband, and because Openreach’s investment criteria are based on the cost per premise of deploying superfast broadband, premises housing SMEs are on average less likely to be commercially viable under Openreach’s investment model than residential premises.

In addition, there is a risk that, as a supplier, BT is being perversely incentivised not to invest in generic provision in business parks because it gains considerable income from the provision of dedicated lease lines to individual premises.

In order to resolve these concerns the report, which doesn’t seem to recognise that BT isn’t the only provider of business broadband connectivity, makes a number of recommendations, such as ensuring greater transparency around the roll-out of faster digital connectivity and prioritising “superfast broadband” for business parks and enterprise zones.

The government would no doubt point out that they’re already investigating these issues and launched a related consultation in May 2016, which pledged to examine “what barriers businesses are facing in accessing superfast broadband” (here). Meanwhile Ofcom’s on-going Strategic Review appears to cover some of the “transparency” calls that IPPR North demands.

Broadband Recommendations (Unbuffering Business)

Prioritise superfast broadband for business parks and enterprise zones.

The government and the relevant local bodies (including LEPs and local authorities) should ensure that access to superfast broadband for business parks and enterprise zones is heavily prioritised within the current rollout. Where appropriate, future funding for the roll-out of broadband should be devolved to combined authorities, and local bodies should consider a broadband voucher scheme for SMEs, to subsidise better connectivity.

Ensure greater transparency around the rollout of broadband.

As a means of ensuring the success of a future universal service obligation, BT should publish full broadband speeds and coverage at a premises level, starting with SME premises and business parks ahead of domestic properties, providing full transparency regarding who is and who is not receiving superfast speeds. BT should also publish neighbourhood-level information about planned activity to upgrade existing infrastructure.