UK ISP Association Asks Gov to Remove Barriers for “Full Fibre” Broadband

The UK Internet Services Providers’ Association (ISPA) has told the Government that if they wish to boost the roll-out of ultrafast “full fibre” FTTP/H broadband networks then the “most important factor” will be to reduce the high costs and admin burden of existing regulatory barriers (wayleaves etc.).

The ISPA’s remarks were made as part of its response to the Government’s recent ‘Call for Evidence’, which is gathering feedback on the “best use of public funding” in order to encourage further and faster deployment of pure fibre optic broadband networks across the United Kingdom (here).

All of this is linked to the new £400 million (state aid) Digital Infrastructure Investment Fund (DIFF), which when supported by private investment could be worth up to £1.5bn. Over the next 4 years the DIFF hopes to help an additional 2 million premises gain access to ultrafast broadband (full details). The investment is mainly intended to be used by alternative network providers (i.e. not big infrastructure owners like BT).

On top of that the Chancellor, Philip Hammond MP, has also proposed a 5 year relief from business rates on related infrastructure and this would run from 1st April 2017 (details). However at the same time the Government seem to be pressing ahead with a plan that could quadruple the tax on infrastructure that is already in the ground, which risks undermining any advantage gained by the proposed relief.

James Blessing, ISPA Chairman, said:

“Government have reiterated their commitment to helping extend fibre networks, which is a welcome step. If Government really want to help our members, they should prioritise removing barriers to rollout. Government is right to pursue an ambitious approach for the UK’s communications infrastructure, but this will only be achievable if the barriers which hamper roll out are reduced.”

The ISPA goes on to suggest that a coordinated approach with a “mixture of levers” will also help their members, including a potential voucher scheme, demand aggregation and better access to public sector networks. However they reiterate that removing regulatory barriers should be the “number one Government priority“.

It’s worth pointing out that some of these aspects are already being tackled via the Government’s new Digital Economy Bill 2017, which is once again attempting to revise the Electronic Communications Code (ECC). Private land owners have even signalled that they may amenable to change, provided they get some decent connectivity in return (here).

Here’s a quick summary of the ISPA’s consultation response.

Voucher Scheme

While we do not believe that a voucher scheme will be sufficient on its own, a new scheme could function as an important policy lever if it is properly administered, is easy to use for providers, targeted at genuine network expansion and enhances competition. Government has gained significant experience in administering connection voucher schemes in recent years, as have our member. Using this knowledge and feedback, an effective voucher scheme model could have an important role to play.

Our members expressed the following views in relation to the Call for Evidence’s discussion of a voucher scheme:

* Whilst our members found the previous connection voucher scheme useful and effective a number of operational issues were highlighted, including that there was a need for product and billing redesign and VAT complications, which made our members’ engagement more difficult and burdensome than expected.

* Any new voucher scheme or similar Government support should be targeted at new infrastructure deployment, either specifically to a customer or through aggregating demand, e.g. via marketing campaigns by working together with business parks or multi-dwelling office buildings.

* We would note the potential need for explicit State aid clearance for such new infrastructure deployment in order to ensure that recipients of the voucher funds (either direct or indirect) are not subject to potentially significant state aid risk – an issue that if not clarified could stifle involvement in the scheme.

Public sector demand aggregation & Making public sector assets available

There was general support from our members for the measures outlined in the respective sections of the Call for Evidence, although it was highlighted that better access to public sector assets must not undermine competition from commercially funded assets and we received anecdotal evidence that some public sector organisations are not fully aware of relevant rights and obligations surrounding service provider access to their infrastructure and potential competition implications.

Wayleaves etc.

We are aware that the Government has started to recognise the problems that wayleave complications (particular for buildings) as well as streetworks permits and charges pose for our members, but we urge Government to double-down on their efforts to achieve meaningful change in this area.

Of all the levers that have been outlined in the Call for Evidence, addressing the high costs and administrative burdens of streetwork permits, wayleaves and other barriers would be the most universal and market-friendly way to support our members who are actively rolling out network infrastructure across the UK.

Moreover, failure to address this policy area or indeed to further increase the costs and risks of such deployments e.g. via imposing additional burdens through business rates would effectively run the risk of negating a significant level of the support that Government would provide through the other levers outlined in the Call for Evidence.