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

Wednesday, Nov 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.

national_productivity_investment_fund

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.

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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