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UPDATE3 Autumn UK Budget 2017 Sees £385m for Full Fibre Broadband and 5G

Wednesday, November 22nd, 2017 (1:29 pm) - Score 3,384

The Government’s Chancellor, Philip Hammond MP, has today given his Autumn Budget 2017 speech and committed to invest £500 million into a “range of initiatives from artificial intelligence, to 5G and full fibre broadband” (£385m for the latter two specifically). But it’s not “new” money.

Normally at this time of year we’d expect the Government to publish their Autumn Statement (Spending Review), although in recent years this has become more like a second budget and that is now deemed unnecessary. Instead the usual Spring Budget has been scrapped and all future budgets will now take place once a year in the autumn, although the switch means that 2017 is getting two budgets.

Suffice to say that many of the major broadband and telecoms related announcements for this year were already unveiled in March (details) and the snap 2017 General Election in June has done little to change that core direction (i.e. today’s first autumn budget is inevitably light on new content). Nevertheless we should point out that the 2017 Conservative Manifesto did pledge the following.

Quote from the Conservative Manifesto

We will work to provide gigaspeed connectivity to as many businesses and homes as possible. We will introduce a full fibre connection voucher for companies across the country by 2018 and by 2022 we will have major fibre spines in over a hundred towns and cities, with ten million premises connected to full fibre and a clear path to national coverage over the next decade.

However we broadly expect that the Government’s existing approach (see details further below), as well as natural commercial upgrades (mostly via Virgin Media and Openreach), should be able to deliver on the 10 million premises pledge and without recourse to ££ billions of new public funding. This is because the majority of that work will focus on the easy low hanging fruit, such as dense urban areas.

The good news is that today’s update did include a pledge to invest “over£500 million in a “range of initiatives from artificial intelligence, to 5G and full fibre broadband” (this actually equates to £385m when only focusing upon 5G Mobile and Full Fibre). The bad news is that this funding isn’t new and is based off the same £740m investment that was already announced in the Spring 2017 Budget.


Hammond also committed over £30m to trial new solutions on the TransPennine route to improve mobile and digital connectivity on trains, although it’s unclear whether this investment will come from the £500m allocation mentioned above. On top of that the chancellor announced a new City Deal for the West Midlands, which may also have a digital infrastructure aspect.

Autumn Budget 2017

5.19 Digital communications

5G testbeds and trials – The UK has an opportunity to become a world leader in 5G, which is the next generation of mobile communications. The government will invest a further £160 million from the NPIF in new 5G infrastructure. The first projects to benefit are:

* £10 million to create facilities where the security of 5G networks can be tested and proven, working with the National Cyber Security Centre

* £5 million for an initial trial, starting in 2018, to test 5G applications and deployment on roads, including helping to test how we can maximise future productivity benefits from self-driving cars, building on the work already progressing on connected and autonomous vehicle trials in the West Midlands

Local full-fibre networks – Full-fibre is the gold standard for fast and reliable broadband. The government is launching a new £190 million Challenge Fund that local areas around the country will bid for to encourage faster rollout of full-fibre networks by industry. Children in 100 schools around the country will be some of the first to benefit, starting with a pilot in the East Midlands in early 2018.

Rail passenger communications – The government will shortly consult on commercial options to improve mobile communications for rail passengers and will invest up to £35 million to enable trials. This will be used to: upgrade the Network Rail test track in Melton Mowbray; install trackside infrastructure along the Trans-Pennine route between Manchester, Leeds and York; and support the rollout of full-fibre and 5G networks.

In case anybody has forgotten, we’ll recap what the current Government has already pledged for broadband infrastructure (note: the £190m for local full fibre networks mentioned above is stated as £200m below because it’s recently been reduced by £10m due to the Gigabit broadband pilots).

Summary of Previous UK Broadband Developments

* The £1.6bn+ Broadband Delivery UK programme aims to put fixed line “superfast broadband” (24Mbps+) networks within reach of 95% of premises by the end of 2017 (currently c.94%) and then 98% by around 2020. Openreach (BT) hold most of the contracts but a few AltNets are also involved in the later stages (Gigaclear, Call Flow, Airband etc.). More recent contracts target a speed of 30Mbps+.

* The proposal for a legally-binding Universal Service Obligation (USO) for broadband, which would offer a 10Mbps minimum download speed to all by 2020, is still progressing (here). We are just awaiting a decision on the final design and BT’s voluntary proposal to fund a softer USO.

* The sovereign-backed £40bn UK Guarantees Scheme will run until 2021, which reflects investment that Virgin Media and Openreach (BT) can call upon as part of their commercial plans to expand the coverage of “ultrafast broadband” (100Mbps+) services. We expect around 60-70% of the UK to be reached by around 2020 (mostly urban areas).

* £400m has been provided to a Digital Infrastructure Investment Fund (here), which must be matched by private finance, to help invest in new “full fibre” (FTTP/B) networks over the next 4 years (helping to boost alternative network providers). It’s hoped that this could boost FTTH/P capable connections by an extra 2 million premises by 2020.

* £200m has been set aside to support the Local Full Fibre Networks (LFFN) scheme (details), which will fund a programme of local projects to test ways to accelerate market delivery of new “full fibre” broadband networks (e.g. connection vouchers for businesses [here], aggregated demand schemes, opening access to existing public sector infrastructure).

* 100% business rates relief for new full-fibre infrastructure, backdated for a 5 year period from 1st April 2017, but the advantages of this may be neutralised by the government’s hike in existing rates (here). The European Commission have also raised some unexpected last minute competition concerns (here).

* Providing funding to support a programme of 5G trials and future spectrum release (here). The first commercial 5G roll-outs aren’t expected to begin until 2020 and Ofcom are currently fighting legal challenges in order to release some of the necessary radio spectrum bands (700MHz, 3.4-3.8GHz, 26GHz etc.).

* Various local voucher / subsidy schemes are still on-going to help those areas that suffer slow broadband speeds (examples).

* Ofcom’s Strategic Review has attempted to boost competition by making Openreach more independent from BT and giving rivals greater access to the operators national network of fibre optic cables and cable ducts/poles (here). Not to mention improving the overall quality of service and greater information sharing.

* The Government are also supporting various other broadband related measures through their Digital Economy Act 2017, such as automatic compensation from ISPs for service faults (here), improved / cheaper access to build new infrastructure on private land (here) and more enhancements for consumer switching.

The above is not an exhaustive list and doesn’t include other elements, such more general changes in Ofcom regulation or the Advertising Standards Authority’s (ASA) review of how broadband speeds and “fibre” services are promoted to consumers (here and here).

UPDATE 7:23pm

We’ve had it confirmed that today’s announcement of a “new” £190 million Challenge Fund for local full fibre is really just a re-announcement of the same £200m pot mentioned in the Spring 2017 budget. Likewise this and the 5G funding come from the same £740m budget that was also announced during the spring. Politicians.. ugh.

UPDATE 23rd Nov 2017

Despite effectively being announced several times already (including in yesterday’s budget), the Government has today re-launched its £190m Local Full Fibre Network (LFFN) Challenge Fund to stimulate commercial investment in full fibre networks across the whole of the UK, including rural and urban locations, by demonstrating approaches that encourage additional private investment and by making sustainable commercial deployments viable.

Minister for Digital, Matt Hancock, said:

“World class connectivity is increasingly essential to people at work and at home. It’s vital to ensure the UK’s future competitiveness in the global market and our ability to attract investment. Full fibre is fundamental for fashioning a Britain fit for the future.”

The projects aim to enable gigabit capable connections to “key public buildings and businesses, with the expectation that this leads to broadband providers creating additional connections to local homes and businesses.” The Government is now encouraging a broad range of local bodies – Local Authorities, Combined Authorities, Local Enterprise Partnerships as well other local public / government bodies such as health, education or transport bodies, to apply to the fund.

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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 Twitter, , Facebook and Linkedin.
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17 Responses
  1. TomTom says:

    £500 million should have gone to the NHS instead.

    1. Mark Jackson says:

      Yes you could put all of the money into education, police, hospitals, schools and all those things.. fund the public sector to death, win some moral high ground and forget broadband completely, why not?

      Then, after you’ve finished creating the best public service in the world, tax from your economy wouldn’t bring in enough money to pay for it without running up big debts and fuelling a recession. A recession that would make a bad situation worse because ideologically held, rather than evidence based, positions are always slow to adapt when change is needed.

      Broadband generates business, which creates jobs, boosts income and that in turn returns stronger revenue from national taxation and helps living standards. Improving the country’s broadband, in the long run, pays for itself and that will in turn feed into the wider economy, including the NHS etc.

    2. mike says:

      Let them spend it on broadband. Isn’t the NHS getting £350m extra a week soon anyway? £500m is nothing.

    3. Bob2002 says:

      @mike The £350m/week for the NHS has been debunked to death –


    4. mike says:

      You mean the bus lied to me?

    5. CarlT says:

      I wouldn’t go as far as ‘lie’ I would stop at ‘blagged’. Pretty funny people trying to say it didn’t influence anything when the person behind it, Dominic Cummings, is quite happy to say it made a definite difference. Still whatever works for people 🙂

    6. Steve Jones says:

      @Tom Tom

      The department of health budget is about £123bn a year, and on a rising trend. That’s every year. Do you really think an amount of £500m which is to be invested over several years so probably amounting to considerably less than 0.1% of the NHS budget over that period is going to make any substantial difference? The intention is, I assume, that this money will be invested to promote the economy, and it’s that economic activity which pays for the NHS (and other services).

  2. mike says:

    You mean the bus lied to me?

    1. AndyH says:

      I think the fact that every MP associated with the bus voted against enacting the £350m a week into law speaks wonders.

  3. Iqbal says:

    Last year the chancellor announced a 1.1bn (400m + 740m) fund for investment fibre and 5G. Is this £500m additional as it is not obvious. Sounds like it is not new money…

    Also Germany allocated EUR10bn for investment in fibre networks last year. Significantly more than the UK is prepared to put up to catchup with the rest of the world.

    1. AndyH says:

      That 10bn was for rural areas alone. They are spending significantly more to build urban fibre networks.

      The problem with the UK government funds is that they are mostly contingent on someone else making an investment (and usually a higher investment).

    2. Mark Jackson says:

      If we take the budget announcement at its word then today’s allocation is expressed as “new” funding, although I’m finding it hard to get a solid clarification from the Government (being passed from pillar to post atm).

      Just to clarify. At the last spring 2017 budget the NPIF invested £740 million in digital infrastructure (i.e. 5G and £200m for Local Full Fibre Networks), while the £400m Digital Infrastructure Fund was described as a complement to the NPIF programme (i.e. separate).

      The spring budget didn’t clarify a specific figure for 5G, but this time around it has so it’s difficult to know if that aspect is new or not. Likewise today we’re told that the Gov is launching a new £190 million Challenge Fund that also seems to come under the Local Full Fibre Networks programme, but is that £200m from spring + £190m today or is it the original £200m but with £10m removed due to the recent Gigabit pilot?


      Suffice to say that the Government really need to clarify this.

  4. Rahul says:

    I welcome this news!

    But I have a question to ask. For example in my building all 29+ Residents Registered their interest for Hyperoptic where I live near the City of London. We have no Fibre not even FTTC. Hyperoptic are very much happy to proceed with an agreement but the building authority does not want to give permission. This stagnancy has remained for the last 2 years since all residents showed interest.

    The Building Technical Manager says that they do not want to proceed with any agreement for Fibre Optic at this stage because it will involve digging the roadblocks and told me to speak to him again next year. Despite the fact that I told him that there are several buildings as much as 15 in my area within 5-10 minutes walk from our building that do have it supported but of-course they are under different building authority and ownership.

    Now my question is this. If the building authorities do not want to provide permission to the ISP’s to install Fibre Optic Cables directly to the Premises how will some of us who live in high-rise building apartments ever get Fibre Optic supported regardless of the provider who takes the initiative to do so?

    This is my concern and worry… I feel like some of us will have to wait another 10-15 years to have Fibre Broadband no matter how much money the government provides. :/

    1. CarlT says:

      ‘If the building authorities do not want to provide permission to the ISP’s to install Fibre Optic Cables directly to the Premises how will some of us who live in high-rise building apartments ever get Fibre Optic supported regardless of the provider who takes the initiative to do so?’

      You won’t.

  5. Ty says:

    “The UK has an opportunity to become a world leader in 5G, which is the next generation of mobile communications.” With a £500m investment whilst Merkel’s Germany is investing 10 BILLION for rural areas alone.. don’t make me laugh.

    This will drag out yet again and we will be lucky to see FTTP for 70% of areas by 2022.

    1. Rahul says:

      FTTP for 70% of the premises by 2022?! No chance, no chance in hell!

      If currently only 3% of the UK premises support Fibre Optic then there is no way it will reach 70% by 2022. I think it would take over a decade to achieve even half way there.

      The reason I am so pessimistic is because of too many restrictions in this country! I am half Bulgarian-Bangladeshi. The building authority restrictions we have here is far too tight. For example most people can’t install their own satellite dishes because they’ll nearly always have their requested permission denied.

      Meanwhile in Bulgaria 80% of the country has Fibre to The Premises. There are no building authority restrictions. Everyone has their own satellite dish attached to the balcony, etc.

      This is the reason why countries like Bulgaria, Romania have managed to so easily lay their Fibre Optic cables because they don’t have this strict unnecessary authority controlling the lives of the people. The system is more loose so ISP’s can easily lay in their own Fibre Optic cables without waiting for months on an authority to grant them installation permission.

      Not to mention larger parts of the country has soil that is easier to dig. The UK has too much urbanisation particularly in the City of London. Like roadblocks, these are hard to dig.

      This is why it’s easier to lay FTTP in rural areas and small towns in England compared to larger cities.
      @CarlT: And that is exactly my point. If the building authorities deny permission. Then what use does this Fibre Optic investment do? ISP’s will be given money but they won’t be able to do much engineering works.

      I guess there is only one way! By having residents reunite together and give persistent pressure to their Building Managers every once in a while to force an agreement. Eventually the authority will get fed-up and will listen.. I hate how this has to be that way though. But hoping for courtesy isn’t going to go nowhere. This is why I have no hope expecting FTTP to become widely available in the UK anytime soon.

  6. TheFacts says:

    If VM pass ~50% of premises are many of these going to be overbuilt by an FTTP company soon?

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