£200m UK Rural Gigabit Broadband Connectivity Programme Starts

The UK Government has today officially launched their new £200m Rural Gigabit Connectivity (RGC) programme, which was originally announced during the 2018 Budget and aims to encourage an “outside-in” approach to building new ultrafast broadband ISP networks by focusing on helping to connect rural areas.

At present only around 7%+ of homes and businesses across the United Kingdom can access a Gigabit (1Gbps+) speed capable “full fibre” (FTTP / FTTH) broadband network and the Government wants to see 10 million premises covered by the end of 2022, rising to 15 million by 2025. After that there’s an aspiration to “deliver a nationwide full-fibre to the premises network” by 2033 (likely to need billions of extra public funding).

In order to encourage this the Government has proposed various changes as part of last year’s Future Telecoms Infrastructure Review (FTIR), which is on top of their existing Local Full Fibre Networks (LFFN) fund, a 5 year business rates holiday on new fibre (10 years in Scotland) and investment support via the Digital Infrastructure Investment Fund (DIIF). Some Building Digital UK (formerly Broadband Delivery UK) money is also helping the roll-out.

The FTIR report indicated that a large-scale deployment of “full fibre” to cover the final 10% of premises would eventually require some £3bn to £5bn of public investment (state aid). The Government also expressed a strong desire to pursue an “outside-in” strategy, which means they’ve been looking to introduce measures that could encourage rollout into some of the most difficult to reach rural areas (i.e. at the same time as supporting private investment in more commercially viable locations, such as urban areas).

As part of that “outside-in” philosophy they’ve today introduced the new £200m Rural Gigabit Connectivity programme, which over the next 2 years (March 2021 completion) will aim to “pilot innovative approaches to deploying full fibre internet in rural locations, starting with primary schools, and with a voucher scheme for homes and businesses nearby.”

The Two RGC Approaches

1. Fostering Local Rural “Hub Sites“

A hub site is really just the lingo for a public sector building, which is deemed to be eligible for intervention and aligns with qualifying criteria set by the BDUK programme. Initially this will start by connecting primary schools to “gigabit-capable” connections (full fibre is the obvious choice, but the announcement isn’t specific about technology) and 31 of those have now been identified as eligible under the scheme (see end of this article).

Other public buildings will then be added throughout the course of the programme (e.g. health sites and community halls). The idea being that you not only help to connect those hub sites, but also bring the fibre deeper into a remote community and thus provide a network that other commercial ISPs can build upon in order to reach surrounding homes and businesses (i.e. market stimulation).

The eligibility criteria for all this will take into account a number of factors, including rurality, funding considerations, state aid compliance, existing interventions (commercial or otherwise), value for money and deliverability within timescales of the programme.

2. Vouchers

The government already runs a £67m Gigabit Broadband Voucher Scheme (GBVS), which offers a grant to help businesses (up to £2,500) and homes (up to £500) gain access to a 1Gbps capable connection. The GBVS is primarily business orientated and the only way for residents to benefit is as part of a local community group, which must include small businesses (i.e. up to 10 homes can participate for every one SME).

By comparison the new RGC vouchers will offer up to £3,500 for small businesses and up to £1,500 for residents. The greater size of the vouchers reflects the higher cost of deployment in such areas. Crucially the new scheme does NOT include a business requirement like GBVS (i.e. homes can easily get a voucher), but like GBVS it will still be possible to aggregate the vouchers in order to help tackle larger deployments.

The first wave of all this will focus upon “prioritised sites” in Cornwall, Cumbria, Northumberland and Pembrokeshire. Additional sites in Scotland, Northern Ireland, Wales and the rest of England will be announced in the “coming months“. The funding for this scheme comes from the Government’s National Infrastructure Productivity Fund (NPIF).

Jeremy Wright MP, DCMS Secretary of State, said:

“Our decision to tackle some of the hardest to reach places first is a significant shift in Government policy and will be instrumental in delivering our plans for a nationwide full fibre broadband network by 2033. Our rollout of superfast broadband transformed the UK’s digital landscape, and our modern Industrial Strategy is focused on investing in the infrastructure that will make Britain fit for the future.”

Robert Jenrick, The Exchequer Secretary, said:

“We want everyone across the country to have access to fibre broadband connections no matter where they live. We’ve set a target of having 15 million premises able to connect to full fibre by 2025 with a nationwide network by 2033 and committed to ensuring the most rural areas aren’t left behind.

This investment enables communities that have not previously benefited from broadband to leapfrog to the most advanced fibre technology – boosting productivity and enhancing quality of life.”

Granted £200m is only a small slice of what may ultimately be required to hook-up rural communities across the final 10% of premises, but for now this is all about taking a gradual approach and making it easier for network operators to develop viable economic models around such challenging rollouts.

This funding is thus ideal for smaller community centric rural ISPs like B4RN, which can no longer benefit from the Government’s Enterprise Investment Scheme (here) but should be able to take advantage of the new vouchers in order to help extend their network into some of the most remote communities.

Going even further into the future we’re likely to see more funding being invested and possibly a revised BDUK style approach, although when this happens the Government will need to be very careful not to distort the market that alternative rural ISPs (e.g. Gigaclear, B4RN) are already building in such locations. But we suspect this is still a few years away.

Equally we’d encourage the Government to take a closer look at the existing Open Market Review (OMR) process, which is currently used as a tool to identify existing network coverage and future rollouts so as to avoid overbuild when public money is used. But the OMR process only occurs every few years (i.e. often missing new build homes or failing to correctly reflect all altnet deployment plans) and this can cause problems.

Otherwise the new RGC programme will aim to complement other BDUK Programmes, such as Superfast Broadband and Local Full Fibre Networks (LFFN), but “will not overlap” with areas where a gigabit-capable solution is already available or will be delivered through these existing interventions.

The Government has also signalled that this new programme may “explore other ways of rolling out gigabit capable connectivity in rural and hard-to-reach areas” using the outside-in approach, although they haven’t announced anything specific today (other than the above).

Gigabit Voucher Schemes (GBVS and RGC)
https://gigabitvoucher.culture.gov.uk

List of First 31 Schools