BBC Review Confirms Phasing Out of Funding to Improve UK Broadband

As expected the Government’s new proposal for the BBC’s next Charter confirms that it “will phase out the protections for broadband ([worth] £150 million a year)” because these public policy interventions “will no longer be required.” But a bit of extra funding will be available until 2020/21.

It’s often forgotten that a big part of the Government’s public investment in the national Broadband Delivery UK programme, which is working with BT and some altnet ISPs to ensure that at least 95% of premises across the United Kingdom can access superfast broadband (24Mbps+) by 2017, comes from a slice of the BBC TV Licence Fee.

Most of this stems from the BBC’s 3.5% Digital Switchover Budget, which was originally assigned to help swap people from the old analogue to new digital terrestrial TV services. However all this changed in 2010 when the coalition of Conservative and Liberal Democrats came to power and re-purposed the fund to help deliver on their broadband pledges.

The last batch of funding to be released from the BBC to BDUK via this method, worth some £300 million, was confirmed in 2012 (here) and covered the period between 2015 and 2017; most of this was used to push the superfast broadband target from 90% to 95% coverage under BDUK Phase Two (aka – Superfast Extension Programme).

In theory the Government could have continued to use this approach until 2020, although we’ve always been told that any BBC linked broadband investments beyond 2017 would probably be much smaller. On top of that the BBC is facing some political and funding problems, thus this source of funding is unsurprisingly being phased out.. but not until 2020/21.

BBC Charter Proposal – Broadband Statement

“In the case of broadband, funding from the licence fee has meant that nearly 4 million homes and businesses are now able to access superfast broadband for the first time. A proportion of licence fee funding will continue to allow the completion of this phase of the roll-out up until 2020/21.

Protected funding for broadband will then be phased out entirely, reducing to £80 million in 2017/18, £20 million in 2018/19, £10 million in 2019/20 and ceasing in 2020/21 in line with the conclusions of this phase of the roll-out programme.”

The remaining investment, from 2017 onwards, won’t be enough to make a massive dent when it comes to expanding the reach of superfast broadband into the final 4-5% of the United Kingdom’s mostly sparse rural areas as these communities are often many times more expensive to tackle.

However the Government may be able to combine it with more private investment (e.g. Broadband Investment Fund) and thus use it to help encourage the deployment of more innovative solutions from alternative network providers, which could reach more people and potentially for less money than BT’s traditional fixed line approach.

Alternatively they may use it to support the delivery of their proposed 10Mbps Universal Service Obligation (USO), but we probably won’t get a firm answer on that until the on-going consultations have concluded by the end of this year.