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Government Considering New UK Rural Broadband Voucher Scheme

Saturday, Dec 17th, 2016 (8:09 am) - Score 2,975

The Government’s Department for Culture, Media and Sport (DCMS), which oversees that national Broadband Delivery UK programme, appears to be considering the possibility of a much bigger voucher scheme that would help remote communities to access and build faster broadband infrastructure.

The idea of helping digitally disadvantaged properties to gain access to faster broadband by offering a voucher scheme to subsidise the installation cost of better connectivity is of course nothing new and indeed we’ve already seen several similar approaches being deployed.

Examples of UK Broadband Subsidy / Voucher Schemes

* The Broadband Connection Voucher Scheme

This scheme ran across most of the major UK cities and their outlying areas until October 2015, which enabled small and medium sized businesses to gain access to a “superfast broadband” (30Mbps+) connection by offering grants worth up to £3,000 to each firm (designed to help cover the installation cost of new infrastructure).

* Better Broadband Subsidy Scheme

This scheme is still active and has been designed to offer a subsidy worth around £350 to properties that struggle to receive the Universal Service Commitment’s (USC) minimum required download speed of 2Mbps.

The idea was to help around 300,000 properties and initially it was only intended as a subsidy to help cover the setup cost of a Satellite service (here), but this wasn’t hugely popular and it’s since been expanded to include fixed wireless providers. Recently other ISPs, including Openreach (BT), have also been able to make use of it via fixed line services (here).

* Access Broadband Cymru (ABC)

This originally provided grants worth up to £1,000 per property in WALES to help people in areas which suffered from sub-2Mbps speeds to get a faster connection installed. Earlier this year it was enhanced (here) and made available to all homes and businesses across Wales which “currently do not have a superfast connection” (30Mbps+).

* Ultrafast Connectivity Voucher (UCV)

This provides assistance worth up to £10,000 towards the capital costs of helping firms in Wales to install a broadband service offering speeds of more than 100Mbps (i.e. providing up to 100% of funding on the first £3,000, then 50% between £3,001 and £17,000 and no further funding for costs of £17,001 and above), albeit only applicable to businesses in Enterprise and Local Growth Zones.

A variety of similar voucher and subsidy schemes have also been setup by certain local authorities across the United Kingdom, such as the £500 subsidy offered by Devon and Somerset in England, but we won’t cover all of those. A few of the existing schemes will also be coming to an end during Spring 2017 and this could open up the prospect of an enhanced replacement.

Clearly subsidy / voucher schemes are not a new idea and the Government has form in using them to help meet difficult targets, even though their impact tends to be mixed. For example, the Connection Voucher scheme may have helped a lot of businesses to get a faster service installed, but it did little to improve the UK coverage of underlying NGA network / infrastructure.

Never the less The Telegraph claims that another voucher scheme may be in the works at DCMS and it would be open to alternative network providers, much like the existing ‘Better Broadband Subsidy Scheme‘, albeit perhaps more significant in terms of financial scale and scope.

A “Senior Whitehall Source” said:

“There are whole load of these insurgent providers using different technologies and they are not relying on fibre. I can imagine 500 houses in a village and they’ve all got their voucher. The parish council comes together and says ‘we will hear from five providers and choose one of them’.”

At present it’s widely predicted that fixed line “superfast broadband” (24Mbps+) connections will be able to reach 97-98% of premises by 2019 (today this figure stands at about 91%), which leaves around 3% of homes and businesses to suffer from slower connectivity (i.e. very remote rural areas and a few urban locations).

The new legally-binding 10Mbps broadband Universal Service Obligation (USO), which forms part of the Digital Economy Bill 2016-17, is expected to focus on tackling that final 3% and Ofcom has revealed that this could cost anything from around £700m to £2bn (here); depending upon time-scale, technology choice, ambition and various other factors.

So far a number of funding options are being considered for the USO, such as public funding from direct taxation, a mildly controversial industry levy (here) or simply allowing BT to take on all of the costs. The latter may of course want more favourable regulation in return, but Ofcom seem not to be playing ball (here).

However so far very few ISPs, except BT and KCOM, are willing to get involved with the USO and the Government also wants to go further than the 10Mbps minimum. In that sense a voucher scheme may be able to assist and it could also be used to complement the new £400m Digital Infrastructure Investment Fund (DIIF) for alternative ultra-fast fibre optic ISPs (here).

Last we not forget that BT’s co-funded Community Fibre Partnerships may also see this as being an attractive approach, particularly since they’re now able to make use of the ‘Better Broadband Subsidy Scheme’. So far 95 communities (18,000 UK premises) have benefited from this co-funded approach with the operator and a new voucher scheme could offer a big boost.

Much will depend upon the detail and it’s by no means cheap to hook-up the most isolated areas (just look at Ofcom’s USO consultation), particularly if the aim is to do anything more substantial than offer an inferior quick-fix Satellite solution. As such the new scheme, assuming it is given the gift of life, is likely to offer larger vouchers than existing ones and will need to at least cater for the new USO. In any case we’re unlikely to hear more about this until the next Budget 2017 announcement or possibly later.

Mark-Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on X (Twitter), Mastodon, Facebook and .
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