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CEO of ISP 4th Utility Calls for HS2 Funding to be Spent on Broadband

Wednesday, Jul 20th, 2022 (3:52 pm) - Score 2,056
HS2-Trains-UK-Route-Map

The CEO of UK ISP 4th Utility, Tony Hughes, has today said that access to reliable broadband should be a basic human right and that now is the time for the Government to “rethink” their investment in the High Speed 2 (HS2) rail project. Instead, Tony believes that such funding should be diverted to upgrade broadband infrastructure.

The HS2 project is currently estimated to cost between £72bn and £98bn (at 2019 prices) – and along the way more than a few people have suggested that such money could have been better spent on improving gigabit broadband and road connectivity, among other things. The project itself did also pledge to bring some broadband benefits of its own but, as we’ve explained in detail before (here), there are doubts about the impact of that.

However, Tony Hughes believes that the tens of billions of pounds being invested into HS2 would be better spent digitally connecting the UK. Hughes also claims that the Government has put the crucial task of providing fast broadband for all “on the backburner“, which comes after recent Ofcom figures revealed that just 33% of the UK currently has access to full fibre (here). But in fairness, that’s still up sharply from 21% a year earlier – the build is currently quite rapid.

At present commercial broadband operators are doing most of the leg work to deploy Fibre-to-the-Premises (FTTP) technology, which is expected to help push national coverage to around 80% over the next three years. After that, the Government has pledged a further £5bn to help reach those in the final 20% of premises with gigabit-capable broadband via their Project Gigabit scheme, which is getting close to awarding its first contracts.

NOTE: The 28% figure used for full fibre coverage below is an older one, based on Ofcom’s data from September 2021.

Tony Hughes said:

“The pandemic showed us the importance of having fast and reliable broadband – and it’s now something everyone should demand, regardless of where they live or what they earn. But inequality is deepening and digital inclusion is something that needs to be much higher on the economic agenda.

Good connectivity should be a basic human right, but sadly the UK faces a mammoth task to connect every home.

In reality, Ofcom’s latest Connected Nations report shows just 28% of homes have access to full fibre, and around 120,000 UK homes are still without any internet access whatsoever. And although there’s been some improvement over the last few years, there’s a huge amount of work to do and we’re already falling behind other nations around the world.”

In terms of full fibre, the UK isn’t so much “falling behind other nations” as it is playing a long game of catch-up with them, since most of Europe has had significantly stronger FTTP coverage than the UK for the best part of a decade (here). On the other hand, coverage of slower “superfast broadband” (30Mbps+) networks is much stronger in the UK than other parts of Europe (here).

Tony Hughes said:

“The Government is spending these billions on a train that gets you to the north 30 minutes faster. Although I back the efforts to better connect the UK, I think investing that money into digital infrastructure would deliver a significantly better economic impact than spending the time and money on a train from Manchester to London.

The way we work is changing. Big infrastructure projects like that are not necessarily the way forward anymore. We must recognise that and rethink.”

On the one hand, we can appreciate where Tony is coming from here, and agree with some of his points. But on the other hand, it’s unclear whether a sudden injection of new public investment – beyond that which has already been pledged – could be converted into a magic fix. Indeed, if we consider the huge level of private investment currently flooding into the telecoms sector, funding may already no longer be the obstacle that it once was.

The government and Ofcom have somewhat succeeded in fostering an aggressively competitive market of network builds, which has in turn forced the biggest players of Openreach and Virgin Media (VMO2) to up their game. But you can only build these things so fast, and it looks like we’re already on course to achieve c.99% coverage of gigabit-capable broadband networks by around 2030.

None of this is to say that the Government couldn’t do more, or that gaining access to even a bit of HS2’s funding wouldn’t help, but it might not all need to go on the rollout side. For example, the decision not to extend the previous relief on business rates for new fibre (this came to an end in April 2022) was a backward step, which is a mistake that Scotland wisely avoided making (their relief runs for a lot longer).

Likewise, more could still be done to help train up new fibre engineers, which is another area where demand is outstripping supply. The Project Gigabit programme could also benefit from more resources, to ensure that it’s able to put its programme into action much faster than it has been doing so far.

At the same time, we shouldn’t forget that HS2 is trying to solve a different challenge from broadband, which isn’t just about moving people at a faster pace between points – it will also enable the rail network to move more people and freight (greater capacity) at the same time.

For its part, the 4th Utility is currently ramping up their own commercial rollout of a gigabit-capable FTTP broadband network, which will include more homes (SDU) and large residential blocks (MDU). The operator expects to cover 94,000 homes by the end of December 2022, which complements their earlier ambition to reach 300,000 premises by around autumn 2023 (here).

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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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Comments
45 Responses
  1. Avatar photo GaryH says:

    Shocker! What’s next Hs2 CEO calls for 5 billion broadband fund to be rediverted to rail improvements?

    I’m all for more investment but this home working vs transport thing is muddling different issues and needs, much like ignoring everything except the train journey time.

  2. Avatar photo GaryH says:

    Ps. To my initial post

    Anyone who adds broadband to the end of the list of ‘Basic human rights’ needs to take a moment and reflect on their priorities.

    1. Avatar photo drevilbob says:

      I would rather a decent internet connection for very home than glorified vanity project. It will be better for the long run and allow more people to work from home and lower emissions from travel.

    2. Avatar photo John says:

      Broadband is more important than rail

      5Bn of broadband can do so much more than 100Bn of rail

    3. Avatar photo Reklaamfilm says:

      Wow. Broadband is essential to me. Because without it I don’t get paid. But I’m sure some huge taxpayer waste on a high speed rail system that nobody can afford and will come in at 10 times budget will be totally worth it.

      To me, broadband is essential because if I would like to eat, drink, have a roof over my head then I require an internet connection. Without it yes I could no doubt live in the woods hunting wabbits. I mean, does anyone need food and water, it falls from the sky and there are plenty of fish in the sea.

      Duh.

    4. Avatar photo GaryH says:

      Sorry Rekla but you don’t need the internet to survive, you’d simply need a different job.

      My comment is simply Internet is not basic human rights material it barely if at all counts as an essential service, for the rest of the hunting and fishing
      comedy content it wasn’t the Internet that changed our societies from hunter gatherers

  3. Avatar photo Bob says:

    I cant say I disagree. It’s an enormous sum of money to spend on what is essentially a vanity protect for most of us in the UK who will never directly use the service.

    It’s not even as though it is building brand new infrastructure (as in a new connection between two uncoenncted places). All it does is improve travel times somewhat for an apparent “300,000 customers” per day. Most of which would be repeat custom on commutes I expect.

    1. Avatar photo An Engineer says:

      By that logic, Bob, building a motorway isn’t new infrastructure as there are B roads linking those places.

    2. Avatar photo gg says:

      Travel time is just part of it. The main justification for HS2 is capacity – the West Coast main line is full – frieght is being delayed and kept on the back of trucks because they can’t run additional trains.
      HS2 will allow some commuter trains to move onto the fast lines, and free up capcity on the slow lines for more local services and more freight.

  4. Avatar photo stuart b says:

    I thought they’d saved a load of money scrapping the eastern leg from East Midlands Parkway north to Leeds? Ironically the HS2 was coming straight through my village within a couple of hundred meters of my house and yet as far as i’m aware there are no plans for fttp for our village in the near future. I’m surrounded by industrial estates that have fibre but nothing for us. Maybe the train will beat it here after all.

  5. Avatar photo An Engineer says:

    HS2 is nothing to do with faster journey times, it’s about taking mainline passenger traffic off lines shared with both freight and local services allowing all to flow more smoothly.

    1. Avatar photo Bob says:

      So HS2 is the best/most economically viable solution to address freight capacity limits?

    2. Avatar photo An Engineer says:

      Much like this CEO I’ve nowhere near the knowledge to comment on that, so I won’t.

    3. Avatar photo Roger_Gooner says:

      “HS2 is nothing to do with faster journey times”. What are you taking about? The initial business case touted big reductions in journey times, like London to Birmingham coming down from 81 minutes to 52 minutes. Then there was the dawning realisation that people don’t waste their time on train journeys as, with their laptops and mobile phones connected to WiFi, they can do a lot of work, so the goal posts were changed and the claim became that more freight could be carried.

      A problem with HS2 is that as it gets further delayed (and thus becomes more expensive) its benefits become less clear especially as remote working is now better established due to the recent pandemic and won’t go away.

    4. Avatar photo An Engineer says:

      I’m talking about the facts rather than the superficial sales pitch, Roger.

      Faster journey times is a way more sexy sales pitch than additional capacity for local rail and freight. Doesn’t change that the business case is all about taking passengers off the existing mainlines.

      May I suggest you look into it some more before commenting further?

    5. Avatar photo Another "Engineer" says:

      Have you seen the ticket prices for HS1 btw? I’m guessing you either

      a) haven’t
      b) don’t care
      c) think passengers will be offloaded onto much more expensive rail and it’s win-win.

      You seem an unhappy chap in general. Does it come with working for openwretch?

    6. Avatar photo An Engineer says:

      ‘Openwretch’: that’s original. No, I don’t work for them.

      I am aware of HS1’s ticket prices. Doesn’t change HS2’s main function. There will still be services on existing track but for sure passengers will be offloaded.

      What the price of HS2 will be when it eventually opens is outside of your gift or mine to know. Rail prices are already very high.

      I’m far from unhappy, which is part of why I neither use childish terms or insult the careers of people I know nothing about, but thanks for the concern.

  6. Avatar photo FibreBubble says:

    The industry is awash with cash from monster investment banks and sovereign wealth funds at the moment throwing money at any provider with a spade or any provider who knows someone with a spade.

    If 4th Utility are having trouble getting any investment in this climate and looking for government handouts, the taxpayer should not be getting involved. The problem is at their end.

  7. Avatar photo Mack says:

    It seems he doesn’t understand how HS2 is to be funded. The money building it will be paid back so he is asking for a loan not a payout.

  8. Avatar photo libertarian says:

    Rail spending of this magnitude and in this century makes no sense. The crossrail in London was delayed by several years and severely went over budget (and is still not finished yet). In California it has become a complete money drain and is nowhere near close to completion but completely over budget. Probably the worse one, in China it has become a massive bubble:

    https://www.youtube.com/watch?v=ITvXlax4ZXk

    Rail was great for communist countries in last century but they will become obsolete. EVs are the future and building charging stations pays off quickly, rather than putting a huge strain on us when we’re already taxed the most in decades

    1. Avatar photo Felix Dzerzhinsky says:

      I think France might disagree with you a bit. As would most of Europe for that matter. Where they have trains that run on time, at 240km/h and cost you €9. But impressive rant nonetheless.

    2. Avatar photo Me says:

      @Felox yes but I suspect a lot of the network is funded by the tax payer more? But of course they pay less taxes on other things. Unlike us in the U.K. where we seem to pay taxes on just about everything going.
      I would love for the U.K. to have a railway like Europe, but we don’t have the government or will power to do it, plus everyone is more greedy and so tickets would never be 9 euros, more like 90.

    3. Avatar photo Libertarian says:

      @felix the Eurostar is always more expensive than simply flying or driving to most destinations. Spain’s rail is a huge financial burden. Portugals is slow and unreliable.

      The union mafias in the UK especially make it worse when a bus from London to Wales costs 1/10 of the price of the train ticket

    4. Avatar photo An Engineer says:

      Is money such an issue that you have to sit on a coach for hours on end rather than in relative comfort on a train, Libertarian?

    5. Avatar photo Libertarian says:

      @engineer I rather the comfort of a car. Between train and bus, the difference in time does not justify the price

    6. Avatar photo Ell says:

      You say Eurostar is expensive but that hasn’t stopped Eurostar from capturing over 70% of the London to Paris Market nor has it had any impact on Eurostar services having 95% of said services arriving on time or within 15 minutes compared to the airlines who only manage 65% to 70% of their services achieving the same.

      You also seem sure that EV technology is the way forward, neglecting the obvious fact that there isn’t many of any EV capable HGVs on UK roads as well as EV cars has still to reach the point of being affordable to the general masses, rail travel is the cleanest mode of transport other then walking and HS2 means more space on the existing network for more trains which can shift a lot more then what any road vehicle can.

      As to those who use the term union mafia, it might have escaped your attention but not every rail worker is on more then £30k etc, I used to work for a cleaning contractor on the railways which paid staff the bare minimum with no sick pay which meant staff would come to work sick or lose pay despite the company in question making profits of double figures and for the majority of my time with said company, I had to do extra hours just to get by.

      Yes FTTP is important but so is transport infrastructure as well as communication infrastructure such as 4G and 5G, instead of this CEO moaning about a project that will directly or indirectly benefit the country, they should shut up and just get on with delivering FTTP to everyone instead of wasting time bitching about other infrastructure projects, maybe then we see a faster rollout of FTTP.

    7. Avatar photo Ruan says:

      Hs2 is needed ev cars wont take over
      People will need to travel that is why when the line shut down it caused chaos

      HS2 IS NEEDED

  9. Avatar photo Adam S says:

    Just so this greedy c**t can put the money in his own pocket.

  10. Avatar photo Me says:

    Totally agree, HS2 was a glorified vanity project so the Conservatives could gloat from the start. It’s a typical flawed government idea, over budget by billions and billions, and most going into MP’s friends pockets no doubt. Bit like the nuclear power station at Hinckley Point is it, which will be the worlds most expensive yet has nothing new in its design.
    I suspect 10 billion would more then pay for FTTP to every single property in the country, 100 billion would probably get 100GB to every property.
    The sensible option would of course had been to spend the money on FTTP and on improving and upgrading all the current rail infrastructure, but as I said it’s a Conservative vanity project to allow them to gloat over.

    1. Avatar photo An Engineer says:

      The planning of HS2 started in 2009 and was further augmented by a government command paper in March 2010.

      Both under a Labour administration.

    2. Avatar photo Libertarian says:

      @you looks like major backfire on your attempted Tory smears

    3. Avatar photo Me says:

      And yet it was Boris Johnson and the conservatives who planned it and approved the funding of it and then singed the forms to approve the start of the building. Not Labour. I think the criticism is justly valid, unless you want to re-wrote history and pretend the conservatives have not been in power for the last 12 years.

    4. Avatar photo Euan says:

      Hs2 is needed and is not a vanity project do your research

    5. Avatar photo Fastman says:

      me says what utter tosh

      Hs2 was in the mix long before conservative governement – it was championed by lord Adonis (hten labour transport minsiter)

      HS2 is fundamental to help get emissions reduced and will have massive impact in modal shift once Phase 1 and 1A to crewe which will open almost consecutively

      FTTP will be in the 90+% within the next 2 years !!!!

      one wonders it 4th Utility will be around by then as M&A in telecomms and fibre builds would assume to be Direction of travel as the market consolidates

  11. Avatar photo Feejus says:

    If we all pause and think about this for a moment. One can argue (IMHO) that this Government is not about what is always good for the communities but rather what is good for them and their friends.

    We can actually kills two birds with one stone, as they are digging up and laying new tracks, the cost to add Fiberoptic link along side the track is not the difficult neither to costly. This was done as mandate in Sweden when they built out new tracks or upgraded tracks.

    Now once you have the main Highway sorted, it cost so much less to pull and connect communities along side the track to the new Fibernetwork, the cost of this would be limited.

  12. Avatar photo Alex A says:

    HS2 will cause the economy to grow and taxes to increase in revenue, this is what pays it off. Without HS2 there will be no increase as such the money for HS2 dissapears.

    Ploughing the money into broadband will not help, there is already loads of private investment with the bottleneck just being the time it takes to do the works required to upgrade which won’t change the lengthy time required to train engineers.

    A good way to speed it up is to try and reduce overbuild by charging standard business rates on overbuilt fibre but waive it if there wasn’t existing FTTP.

    I think this piece is just to try to get investment for 4th utility, an article on this site says they aim for 300 000 homes by autumn 2023 which is a lot for a small ISP which only has £25m in funding so far.

    1. Avatar photo Anonymous says:

      disgaree with Alex A on overbuild to a certain extent. Areas that have FTTC from BT and Virgin Media, should be allowed overbuild by an AltNet.

      The only ultrafast in these types of areas is Virgin Media which is expensive and often has over utilisation or technical issues like low SNR or noise impacting cabinets/end users. They also have paltry upload speeds which is an issue for syncing stuff to other servers or to cloud storage.

      But overbuild where BT FTTP already exists, maybe even VM as well and another ALTNET is silly, I agree there.

    2. Avatar photo Alex A says:

      @Anonymous I agree, BT FTTC and Virgin coax isn’t comparable to FTTP.

      I don’t want to discourage BT or Altnets into expanding FTTP into these areas, I want to discourage them into expanding into areas which already have FTTP by having them pay standard business rates.

      Its not uncommon to have 3+ FTTP networks in one area, while this isn’t comparable to each operator building in a different area (the 1st operator clearing PIA ducts reduces the works massively for subsequent ones) it takes away resources from building in new areas.

      Having competing FTTP networks is great… in a few years when most of the country can already get FTTP.

    3. Avatar photo An Engineer says:

      The assumption that overbuild always takes resources away from build to unserved areas is a risky one.

      The resources are already dedicated to those areas and contractors potentially hired for them, planning done, permits and conversations with local highways had.

      As far as overbuild more generally goes let’s not think of CityFibre as an altnet. Given its level of funding and scale it belongs in the group with Openreach and VM.

      Overbuild between actual challenger networks is way lower. The challengers doing mostly urban stuff know they’ll be in there with Openreach and VM with CityFibre likely in many large towns and cities.

      I’ve seen challenger networks back out when another challenger began building before they had broken ground.

      Openreach and CityFibre both chase challenger networks, too, so often the overbuild is inadvertent on the part of the challenger. Takes CityFibre way longer to get there but I can’t see it being a coincidence they were roping ducts outside the same week a challenger went live.

      Openreach, well. They’re a privately held business. To do anything other than defend their market share in this way would be negligent.

  13. Avatar photo Darren McCoy says:

    Imagine all those motorists in the 1950’s complaining about the motorways being built because they cost TO much and destroyed the environment! Our B roads are GOOD enough! /s

    1. Avatar photo Hap says:

      Now imagine if they built that motorway, only ran taxis on it on limited specific routes, charged you a price most can’t afford, and then delivered you miles from the destination you wanted to go. And made every tax payer pay for it.

  14. Avatar photo spurple says:

    You can work on the internet, but as far as we know, you can’t download food off the internet yet, or download any physical goods for that matter.

    1. Avatar photo Mr Sarcastic says:

      Yes you can download physical goods, it’s called a 3D printer.

    2. Avatar photo drevilbob says:

      You can earn this magical stuff called money and whilst doing so save the environment.

  15. Avatar photo Richard Branston says:

    A CEO who quite incredibly doesn’t understand that close to £10 has already been spent, and cancelling the project would result in huge £BBs cancellation penalties – and with tens of thousands of highly skilled engineers made redundant.

Comments are closed

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