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High Demand Causes UK Gov to Reduce Gigabit Broadband Vouchers UPDATE

Monday, November 12th, 2018 (2:20 pm) - Score 4,712
broadband vouchers ultrafast gigabit uk full fibre

The government has today revealed that 7,000 UK businesses and surrounding homes have taken advantage of their £67m Gigabit Broadband Voucher Scheme (GBVS), but strong demand means they now expect the funding to dry up a year sooner than expected. In response the top voucher values have been cut to £2,500.

The GBVS scheme, which was officially launched in March 2018 following a successful pilot (here), forms part of the Government’s wider Local Full Fibre Networks (LFFN) programme. Essentially it offered vouchers with a value going up to £3,000 for businesses (SME), or £500 for residents, to help them with the costs of connecting to “full fibre” (FTTP/H) broadband or leased line from an approved ISP.

All of this is intended to help support the government’s commitment to making Gigabit (1Gbps+) capable “full fibre” broadband available to at least 10 million UK homes and businesses by 2022, which will be followed by 15 million in 2025 and then there’s also an as yet unfunded aspiration to achieve “nationwide” coverage by the end of 2033.

We should point out that the GBVS is more business orientated and the only way for residents to benefit is as part of a local community group, which must include small businesses. But the good news is that they’ve now made it easier for more residents to participate (up to 10 residents can now participate for every one SME).

However, the GBVS may have become a victim of its own success. The £67 million scheme was initially expected to run until March 2021, but “high demand” (7,000 vouchers have already been issued) means that their funding is now “expected” to dry up a year, or possibly even sooner, than originally expected (i.e. around the end of 2019 or early 2020).

Margot James MP, UK Minister for Digital, said:

“Our modern Industrial Strategy is clear on the importance of connectivity, as we build a full fibre Britain that is fit for the future. These vouchers provide practical and immediate help to firms struggling with slow broadband speeds.I encourage small businesses around the UK to apply now.”

Mike Cherry, FSB National Chairman, said:

“Access to good broadband is vital for small businesses across the UK, and with the clock ticking on this scheme, it’s important small businesses don’t delay if they want to apply for funding.”

To date, demand for the scheme has been strongest in the South West, followed by the South East, Yorkshire and the North West of England. But in order to ensure that there are enough vouchers left, the Government has now reduced the maximum value of each from up to £3,000 to £2,500 in a move that they hope “will encourage neighbouring businesses to ‘pool’ their vouchers.”

The Department for Digital, Culture, Media and Sport (DCMS) said they now “expect more than 1,000 additional businesses and homes to benefit,” although this could be problematic since the original announcement correctly noted that “in some areas the value of a single voucher will not fully meet the installation costs of a gigabit capable full fibre connection” (hence the ‘pool’ remark above).

Regional/Nations Breakdown of Vouchers Issued (30th Oct 2018 Data)

Region/ Nation Vouchers Issued
South West 1613
South East 927
Yorkshire and The Humber 871
North West 745
London 661
West Midlands 475
East of England 407
East Midlands 369
North East 68
Northern Ireland 418
Scotland 315
Wales 58

Gigabit Broadband Voucher Scheme (GBVS)
https://gigabitvoucher.culture.gov.uk

UPDATE 4:04pm

We’ve been informed that 1,197 vouchers have so far been issued to homes (as opposed to businesses), which comes out of the 7,000 total.

UPDATE 13th Nov 2018 @ 11:01am

We’ve had a new ISP comment.

James Warner, Glide Business Director of Sales and Marketing, said:

“The Government’s announcement of a decrease in the maximum value of vouchers available for businesses to claim off the install of gigabit capable services is disappointing.

Whilst it is an encouraging sign that there is a high demand of vouchers, the change to the maximum value of £2,500 instead of £3,000, poses a very real risk to thousands of companies who need this incentive.

Through the Gigabit Broadband Voucher Scheme, Glide have been working tirelessly to support over 600 businesses to connect to the ultrafast broadband that is vital to their day to day operations, and competing well into the future. Whilst we echo Margot James’ sentiment that the vouchers give both a practical and immediate value, our fear is that this announcement will dilute the importance of full fibre and its roll out.

It also puts more pressure for ISPs such as Glide to invest even more in their networks to support the ever-growing demand. Although Glide remains committed to unleashing fibre connectivity across the country, this decision perhaps will be detrimental in slowing down both ISPs’ pace and ability to reach the businesses which have oft been forgotten by the incumbent.”

UPDATE 13th Nov 2018 @ 1:58pm

We’ve also added a comment from Zen Internet.

Paul Stobart, CEO of Zen, told ISPreview.co.uk:

“Britain has often been called a nation of shopkeepers, and the Government’s plan to bring its small businesses into the 21st century is a good one, but it needs to go further. It’s clear there’s huge demand from them for better broadband, especially for those that rely on it for everything from fulfilling orders to building or maintaining a presence online.

The Government must continually invest in these areas if it wants to strengthen the backbone of the UK, and we hope to see projects like this as just the start of things to come.”

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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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24 Responses
  1. Meadmodj

    Unfocussed waste of public money. Like throwing money out of a high window to the crowd below. Any SME committing to an Ultrafast (Gig capable) service will apply by default and seek others. So no surprise demand is up now that it has become general knowledge. Good for those that are quick.

    • Alex Bristol

      Your comment is strange Meadmodj because on 28/10/18 02:11 you said “why can’t the current voucher systems simply be increased in value and extended” (https://www.ispreview.co.uk/index.php/2018/10/government-at-least-another-250m-for-uk-full-fibre-broadband.html).
      To me it is good the government is trying various projects to help push the roll out of full fibre or next generation broadband, and great that this relatively small £67 million project has been so popular. The main problem is with many councils doing too little too late, as Jules mentions below his council is years behind everyone else.

    • Meadmodj

      I was not criticising the concept of vouchers but the fact that GBVS is not selective. The earlier post related to villages/hamlets that could not get or were scheduled to get Superfast. Most small businesses do not require high capacity data and if they do then my view is they should pay the going rate or locate to a premise that has required services not expect the public to subsidise. A lot of GBVS vouchers have gone to enterprises and locations which did not need public funding.

  2. Gary

    Sadly yes Meadmodj, just because you run a business doesn’t mean you need blistering internet or that subsidising one is the best use of public money.

    What to me seems laughable is that the response to a popular scheme is, we’re going to run out of money too soon, so reduce the pay out to make the scheme last until the projected end date !
    ok so slightly more people will get aid out of the pot now but reducing value to encourage aggregation of vouchers just shows how short sighted the initial scheme was, it should have been a requirement to enable as many as possible in a build and to ensure that build helped push the fibre footprint deeper wherever possible.

  3. Gary

    Interesting spread of vouchers issued across the country, does make me wonder why the numbers vary so much between areas. Wales and Scotland maybe due to the fact that for many rural businesses 3500 wasn’t enough to make it financially viable.

    1100 homes to 6000 businesses ? Not surprising to me 500 quid subsidy doesn’t really make the costs of connection in unfunded areas much more palatable.

    • Joe

      Essentially yes and to some extent the way local BDUK was being deployed makes it easier in some areas than other to make the last hop.

  4. Jim Weir

    I suspect a large number of the South West Vouchers have been used by Truespeed – they were offering a 200 to 300Mbps upgrade if eligible for a GBVS voucher. I would guess that for every business they connected they claimed the appropriate number of residential vouchers at the same time.

    In March 2018:
    B&NES highest number of vouchers approved to date
    » 517 residential vouchers approved : further 250 requested
    » 76 business vouchers approved

    http://www.bathnes.gov.uk/sites/default/files/somer_valley_enterprise_zone_update_-_march_2018.pdf

  5. Jules

    Utter insanity. They can’t even finish the ‘super fast’ broadband roll out before moving into rubbish like this. Realistically who actually needs gigabit internet when some people have no connectivity at all? We live 4 miles from a large town in Essex and we have to rely on a very compromised Wi-Fi link for both our home and business connection as we have about 1mbps down the bt line. Disgusting.

    • dragoneast

      Hasn’t State finance always been a game played for political purposes? Look at any of our infrastructure. Isn’t it one reason why the road and rail network are such a mess (or indeed the whole of land use planning). When we can’t transport/distribute the physical stuff efficiently it’d be a miracle if we could handle it with the data network. Some things never change.

    • New_Londoner

      @Jules
      If decent broadband speeds matter for your home and business, what are you doing about it? Have you investigated a community funded option? Or looked into an external aerial and large data package on 4G along the lines of that offered by EE?

    • Mike

      The loudest voices tend to have the quietest brains.

    • The loudest voices tend to have the quietest brains.”

      I’m not sure that is a valid “saying” as it would appear to be incorrect more often than it is correct, as demonstrated by so many people.. such as Stephen Hawking, Barack Obama etc. etc. I’m also unsure where it fits in with this discussion.

    • Simon

      “The loudest voices tend to have the quietest brains”

      Well the Maybot is brain dead and never shuts up. so that’s true in her case.

  6. A_Builder

    The GBVS is a really good idea.

    It has stimulated a lot of build out of fibre.

    FTTP cost has dropped in urban areas so £3k probably is too much subsidy.

    It is a shame that rather than top the pot up it will be allowed to run dry.

    However, I suspect a few business models have assumed that it would be extended.

    As a multi location business owner the variability/availability of broadband is an unwanted factor in business decisions. It shouldn’t be. For some SME’s 1Gb might be over the top but for an office of 10 people something like 100/100 would be appropriate. However, you cannot really snapshot NAS and other business critical things over that sort of connection. And realistically this is vital for businesses to be able to do. That being said if you are delivering 100/100 into the middle of nowhere it has to be by fibre so why not make the 1G available?

    The key thing is to make sure there is a PON or AggNode available to each community from the fibre. So this nonsense of I have a fibre nearby but can’t connect to it (I appreciate that direct local connection to trunk backhaul is not easily possible)

    • Meadmodj

      @A_Builder. I agree with the last statement but not the first. GBVS is not selective, is supplier lead and has not been focused therefore some of it has been used in areas where commercial or future rollout is expected. Many on GBVS have taken out Ultrafast speed packages on the Giga capable service including where there were alternatives. Others may have purposely utilised this subsidy in considering moving to lower cost properties. My contention is that public money should only go to businesses where commercial provision of fibre will never be commercially feasible or expected in the next 5 years.
      Ad-hoc FTTP fibre provisions are less efficient than planned FTTP rollouts. Suppliers use any subsidy as a “first on the block pays” principle to subsidise their subsequent commercial provision. The same may occur for other voucher systems and the fourth coming USO.

    • Joe

      @Mead the only problem with that is what is commercially viable @ 5 year distance is beyond the range of a good metric.

  7. James Blessing

    The original point of the voucher schemes was to encourage business to install more reliable (i.e. fibre) connectivity with higher upload speeds (rather than download). Ideally, the business would group together in hard to serve areas and entice a provider to build in a custom solution that matched their needs. The provider would then hopefully market into the adjacent territory to get the best RoI. Combine this with OR offering FTTpoD and you had a model that should have moved the market to find solutions to difficult problems.

    However, thanks to politics (not looking at you BT Group or VM) the plan was watered down so much into “here have a voucher” it never actually managed to solve the problem for the majority of the target audience.

    Oh and before you ask how I know this… I sat down in a room with government and various large providers when they announced they had funding for developing broadband notspots trying to come up with an approach that got the money into the bits of the country that needed an injection of capital to fix them (not rural in most cases but places where it was just difficult to get good quality connectivity for historical reasons)

    The second half where local government was given the opportunity to “pre-build and leaseback” infrastructure (as they’ve done in Stockholm, Amsterdam and various other parts of the world was put into the “Europe won’t like that so we won’t even ask” pile

    • New_Londoner

      “The second half where local government was given the opportunity to “pre-build and leaseback” infrastructure…”

      Good thing that this wasn’t pursued. Firstly, local government doesn’t have the resources to deliver its current responsibilities so why take on new ones? Secondly, where local government has dabbled in this area it’s been an unmitigated disaster – South Yorkshire and Aylesbury Vale spring to mind as a couple of examples.

      Apart from that … 😉

    • CarlT

      Citynet Amsterdam was/is a consortium of investors. Amsterdam are making money on it, so it seems to be okay.

      if these things are approached in the correct way they can, of course, be lucrative. Local authorities, even in times of austerity, invest in order to provide income. A neighbouring authority has a private housebuilding arm attached to its social housing arm investing in homes for private sale to generate revenue for social housing provision for instance. A different model to FTTP but no reason why local authorities, given the infrastructure they already own especially, couldn’t pursue this, apart from that VM and BT sue them into the ground when they try.

      SYDR is a joke and the less said about it the better. It’s like saying that all airships are bad because of the Hindenburg.

    • On the other hand Carl, how many good examples do we have of UK local authority funded, built and managed consumer broadband networks? I’m struggling to think of one off-the-top of my head. Granted as a pragmatist I’d agree that you can’t assume they’ll always go bad, but equally the evidence isn’t compelling for the opposite.

      The best I can come up with is that in the long distant past, when the world was a very different place, many countries did build successful state run operators (e.g. BT). But those were of course born into a market without competition, which is rather a different environment from today.

    • James Blessing

      Don’t want the council to build a FTTP network, just the supporting infrastructure like the (finally) did in Tameside https://www.tdic.coop/sites/default/files/casestudy2018.pdf that has lead to a number of different projects that use it like
      https://placetech.net/news/residential-dark-fibre-broadband-launches-in-tameside/

    • CarlT

      Going by the example of Amsterdam no interest in local authorities becoming ISPs. Just ducts and dark fibre would do nicely.

  8. A_Builder

    @CarlT

    I totally agree with you.

    @James Blessing

    As I post frequently we in the UK apply the State Aid rules in a totally different way to the intention when they were drafted. And certainly not the way our continental friends do.

    There is zero reason that if the asset is not available to all at a sensible market rate that you state building backbone doesn’t work. It is only an issue if there is lock in and lock out.

    @New_Londoner

    There are lots of things that LA’s do that are both very good and very bad: some managing to be simultaneously so depending on perspective.

    SYDR was an exemplification of the very very bad with little upside. That being said you cannot tar every LA with that brush.

  9. Bill

    What I would be interested in is knowing the typical services that people go for when they use these vouchers.

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