Slow Take-up of Superfast Broadband Holds Back Rural Businesses

The coverage of UK “superfast broadband” (24Mbps+) ISP networks may be growing but a new report from Rural England, Scotland’s Rural College (SRUC) and Amazon, which examines how rural businesses use digital technologies, has warned that slow take-up of the service is also holding them back.

At present a combination of commercial investment and public funding, such as via the national £1.6bn+ Broadband Delivery UK programme, has already helped to increase the estimated coverage of fixed superfast broadband networks to more than 95% of UK premises. This could reach around 98% by 2020 and then the final 2% is widely expected to be catered for by the government’s 10Mbps Universal Service Obligation (USO).

Meanwhile a survey for today’s report found that the majority (59%) of businesses only had a “standard broadband” connection (e.g. slow and less reliable copper ADSL lines) and just 19% had a superfast connection. Given this result it’s perhaps understandable that many of the businesses rated their connectivity poorly for its speed (37%) or its reliability (25%). Fewer held positive views about these two attributes.

So far, most of the rural digital debate has centred on the issue of access to infrastructure: specifically, connectivity to broadband and mobile networks. The roll-out of such networks has naturally been slower in rural areas due to problems of economic viability, although as mentioned earlier that situation is improving.

However the report argues that the debate over network coverage has diverted attention away from questions about the take-up and use of digital technology, as well as applications and services by businesses located in (the majority of) rural areas, where there is now reasonable infrastructure.

“Given the potential implications for business location, competitiveness and growth – not to mention any wider implications for job opportunities and productivity – this is perhaps surprising. It should be of significant policy interest, if the ambition in the UK Government’s Digital Strategy (DCMS, 2017) is to be realised, that every business should be helped to become a ‘digital business’,” said the report.

In response the report has published a series of recommendations for the private and public sectors to support the rural digital economy, which covers more than just the broadband and mobile connectivity side of things.

The Five Recommendations (Themes)

Theme: Simpler signposting to digital support and information

i. Help businesses to find digital or IT support, by creating local directories of those who offer such services.

ii. Help businesses to find appropriate local guidance and support about their digital needs (e.g. connectivity, training, e-commerce), by ensuring it is on a single portal. One good model is the Business Gateway Digital Boost website.

Theme: Better access to support, including digital enterprise hubs

iii. Create more digital enterprise hubs in rural towns which businesses can use or visit for better connectivity, start-up workspace, hot-desk space and digital training.

iv. Encourage more small businesses to export, by promoting the opportunities afforded by e-commerce, including the option of using third party e-commerce websites.

Theme: Smarter digital training and skills development

v. Help businesses to recruit to meet their digital needs, by local collaboration between employees and education providers, and by improving retraining opportunities.

vi. Raise the level of digital skills within SMEs, by making short training courses and online tools more readily available to small business owners.

vii. Encourage rural businesses to set aside resources for digital training for their employees, in order to improve productivity.

Theme: Faster business adoption of digital connectivity

viii. Raise superfast broadband take-up by rural businesses, by reinforcing efforts to promote the business benefits.

ix. Encourage businesses already using superfast broadband to champion it to their peers, providing real world examples of the benefits.

Theme: Stronger rural targeting by existing policies and strategies

x. Ensure that rural businesses benefit fully from the Economic, Digital and Industrial Strategies as they are implemented across the UK. Examples of how this could be achieved include: having rural representatives sit on the Productivity Council and Digital Skills Taskforce; testing the Digital Catapult Centre model in a rural location;and designing the National Productivity Investment Fund so it targets rural areas.

xi. Make support for digital growth a key objective within future (post-Brexit) rural business support programmes. There should be a dedicated rural strand within the Government’s proposed Shared Prosperity Fund, capable of supporting digital skills and growth. This would recycle existing public funding.

xii. Encourage larger technology-driven businesses to adopt policies promoting digital take-up in rural areas, by sharing their good practice and giving practical support to smaller businesses.

As usual the challenge of take-up tends to be a complicated one and calling for better promotion of the new connectivity is certainly a good place to start, although a lack of awareness or familiarity with the service is often only one of the core problems. In other cases businesses may be tied to a longer contract term with their old service and won’t be able to upgrade until that ends.

Elsewhere the higher prices for such services may also discourage uptake and lest we forget that not all rural businesses actually need “superfast” speeds (depends on what the business does). The fear of switching to a different ISP or network can also obstruct take-up.

However we should point out that improving take-up in areas which have benefited from the Broadband Delivery UK or related programmes may have another key benefit. Most of the related contracts carry a clawback / gainshare clause, which means that the supplier (ISP / network builder) is required to return some of the public investment as take-up rises and this can then be used to further boost coverage (here).

Unlocking the digital potential of rural areas across the UK
https://ruralengland.org/../Unlocking-digital-potential-website-version-final.pdf

UPDATE 1pm

The CEO of rural fibre optic ISP Gigaclear, Matthew Hare, told ISPreview.co.uk in a special comment: “It’s not surprising to see yet another report showing that slow and unreliable broadband is severely hindering rural businesses’ ability to grow. The simple fact is that lack of connectivity has a detrimental impact on the growth of the UK’s economy. Whilst we are now seeing a very slow shift towards prioritising fibre, we have a long journey ahead of us in order to get all 30 million UK properties onto full fibre networks. Let’s remember that, across the whole industry, we have only managed to achieve around 1 million properties to date.”

“The industry needs to build on this initial progress and develop new, innovative ways to deliver full fibre at a much faster rate. In addition, central and local government needs to do a lot more to enable this enormous national civil engineering project, reducing and removing barriers to deployment as much as possible. Ultrafast, full fibre broadband is the only future-proofed solution to power the UK’s digital economy, both for urban and rural areas. We need to put fibre front and centre to allow businesses to truly flourish.”