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UPDATE2 UK to Leave EU – What Next for Broadband and Internet Policy

Friday, June 24th, 2016 (11:24 am) - Score 2,400
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It’s impossible to escape today’s big news, which is that the United Kingdom has voted by a tiny margin to leave the European Union. The immediate impact upon UK Internet and broadband policy will be mild, but some areas may be hit harder than others and the future beyond 2018/9 is particularly uncertain.

Firstly, it’s important to highlight that the process required for leaving the EU will run for 2 years, during which time new trade or other arrangements will need to be negotiated and existing EU linked policy or funding commitments should continue to apply. Political leaders in Brussels have promised that everything will be “business as usual” for that period (they don’t have much choice because the UK will also continue with its contributions to the budget), but a lot of future factors will depend upon the outcome of those negotiations.

Mercifully most of the existing broadband roll-out contracts are only designed to run up to 2018/19 and very few involve a substantial amount of EU sourced funding. We’ve had a huge amount from the EU in the past (e.g. Cornwall’s contract with BT), but today’s allocations are much smaller due to budget cuts and obviously we won’t now get anything more from that side after 2018/19.

Similarly any new contracts being signed over the next few months aren’t expected to involve much EU funding, although the Brexit vote will create funding challenges for any contracts that envisage the use of EU sourced investment past 2018/19 (poorly served rural areas may notice this more than most). The UK economy also seems set to take a hit and that in turn means less money to go around.

Otherwise, here are a few key areas that people should keep an eye on.

Key Broadband and Internet Policy Implications

* We don’t anticipate UK policy towards support for broadband or mobile network upgrades / infrastructure roll-out being hit too sharply in the near term because most of our domestic legislation is either already ahead of or in-line with the EU. As such the policy proposals for a 10Mbps USO, improvements to civil works, protection of net neutrality, ensuring support for high-speed broadband in new builds and existing BDUK contracts should all broadly continue as planned. But there is the potential for a greater policy divide to open up in the future.

* The EU State Aid rules will in theory no longer apply past 2018/19, which could speed up the administrative process for contract approvals (less red tape) and leave the UK free to adopt a more flexible or possibly restrictive model of public funding. At this stage not even the Government’s Broadband Delivery UK programme knows quite what approach will be taken. However the UK will probably have to accept some degree of EU State Aid ruling as part of its new post-Brexit agreement(s).

* If the EU sets a future target for the roll-out of “ultrafast” (100Mbps+) broadband services past 2020, which is widely expected to happen, then the UK can choose to ignore that and be less ambitious. However we’d like to think that the Government will not rest on its laurels and instead strive to keep us competitive.

* The controversial Internet spying centric Investigatory Powers Bill (IPB) will be able to pass into law without needing to worry about future legal challenges from a possible conflict with the EU Charter and related legislation, which is designed to protect your personal privacy and freedom (example).

* Mobile operators in the UK won’t be held to the EU’s new roaming regulations after 2018/19, which means that we might all end up paying more when using our mobiles to call, text or surf the Internet while roaming abroad.

* After 2018/19 Ofcom will no longer have to wait for feedback, opinions or approvals from the European Commission before finalising new industry rules, although its approach will continue to follow the direction of domestic Government policy. The regulator will no doubt also remain attuned to the direction of EU telecoms regulation (necessary for some aspects, such as the harmonisation of radio / wireless spectrum bands).

* Maybe that whole silly EU cookie law, which requires you to click on a pointless website announcement or pop-up that most people pay no attention to, will finally be sent to the scrap heap.

Elsewhere some have speculated that the UK could use part of the money that it would have previously paid into the EU and flush that back into the UK, but it would be wishful thinking to assume that broadband is going to be a significant recipient. If anything, the predicted economic downturn may have a more negative counter impact, at least over the short term.

Nicholas Lansman, ISPA Secretary General, said:

“The UK has entered into a new chapter in its history following the result of the EU membership referendum. There are clearly a number of significant questions and issues that will need to be addresses in the weeks, months and years ahead. ISPA will work with its members and Government to fully understand what Brexit will mean for the sector.

The EU is responsible for a considerable amount of regulations affecting the Internet and technology sectors and it remains to be seen what the full ramifications of this. To name a few, this could have an impact on the future regulation of data privacy, public funding for broadband, surveillance powers and the future of the Investigatory Powers Bill, consumer regulation and the future of the Digital Single Market.

The UK has a world-leading digital economy, ensuring this is maintained should be a priority as industry and government respond to the new UK landscape.”

Assuming the worst were to happen and we end up in another recession, then consumers and business behaviour would also become more protectionist. This means spending less on superfast broadband and putting a greater focus on switching to cheaper services in order to cut costs. But that in turn would make it harder for new networks to get built or attract investment, at least for a little while.

Suffice to say that today’s Brexit vote is a mixed bag for broadband and Internet services, but little of any real outcome will be seen until after the UK completes its exit. Going forwards our future will depend much more upon the competitive direction of UK domestic policy and quite how that will pan out after 2018/19 is open for speculation.

UPDATE 3:32pm

Added a comment from the ISPA above.

UPDATE 5:02pm

Welsh ISP Spectrum Internet reported a surge of UK Internet traffic this morning due to the results of the EU referendum. The traffic was double what it would normally be during the night, when usually businesses back up their data. Last night saw additional traffic due to customers being awake and online.

Apparently the highest spike of users was at 9am following David Cameron’s resignation as Prime Minister.

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Mark Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he is also the founder of ISPreview since 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
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8 Responses
  1. MikeW

    Of course, any apparent freedom from state aid rules is predicated upon the result of negotiations to leave.

    If we want to keep access to the EU’s trading market, we will probably need to continue with all the rules that aim to keep protectionist activities at bay – which is what the state aid rules are all about.

    • GNewton

      It is interesting that during the Vote Leave campaign Norway was frequently quoted as an example on how to do well outside the EU. However, even Norway, in order to have access to the EU market, accepted the EU rules, including freedom of movement, payments to the EU, etc., though it has no say in the EU decision making processes.

      In terms of broadband in the UK, nothing much will change immediately, as explained in the article. However, in the long term, future fibre infrastructure projects in the UK might slow down in view of lower market demands. This is because of an expected economic slowdown, or recession, or uncertainty, triggered by the Brexit vote.

  2. Devonbloke

    We are not going to end up in another recession.
    There will be a very slight dip and then carry on as normal.

    • FibreFred

      +1

      This was always going to happen if we left, whilst people get their heads around it, might take days, might take weeks, might take months. But… it will bounce back.

    • Bob2002

      The FTSE is currently down about 3.6% after this historic, world changing event – apparently no worse than a typical bad day. The dollar/pound was at $1.48 at 10PM last night because the markets predicted Remain had won, then there was a massive overreaction once they realised Leave had won – it’s now at $1.37.

      On political forums, after the Leave win, Remain supporters were running around like the sky was falling down as if they’d never seen an exchange rate fluctuation in their life before – at least one guy had been telling everyone the pound would drop by 20%(and implied it may never recover).

      Strange people, Guardian readers.

  3. tonyp

    Back to Customs duties and paperwork. Sigh!

  4. Jazzy

    I think it’s unlikely that we will end up in a recession and a lot of things will continue as normal in a post EU divorce and this is going to happen sooner than later if the news reports are to be believed. I am a first believer that article 50 will be triggered a lot earlier than October and the timeline will be sped up dramatically.

    Granted, there are many things to untie and some won’t be untied but it will be interesting to see where we are headed next.

  5. We are not going to end up in another recession.

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