Government to invest a billion to boost fibre broadband

25 November 2016

The new funding will be used to support the private sector in building out more fibre networks over the next five years.

The new funding will be used to support the private sector in building out more FTTP networks over the next five years.

The government plans to invest more money to expand fibre broadband and digital infrastructure. 

While the news has been welcomed across the industry, some senior academics have warned that the government needs to ensure that the investment is targeted at harder-to-reach parts of the country in order to boost the economy.

In the Autumn Statement announced on Wednesday, chancellor Philip Hammond unveiled a new National Productivity Investment Fund (NPIF). This will provide £23 billion of additional spending to ensure that the UK economy is “fit for the future”. 

The NPIF will be used to fund areas that are key to boosting productivity. As well as transport, R&D and housing, £1 billion will be used to support the private sector in rolling out more FTTP broadband by 2020-21, and trialling 5G networks.

It also includes £400m investment into a Digital Infrastructure Investment Fund. The aim here is to boost commercial finance for emerging fibre broadband providers looking to scale up. 

In addition, from April 2017, the government will provide 100 per cent relief on business rates for new full-fibre infrastructure for a five-year period.

Professor Andrew Ellis, Aston University’s chair of optical communications, said the Digital Infrastructure Investment Fund was good news but sounded a cautionary noted. 

“The proposed investment could go a long way to tackling the digital divide that currently exists in the UK, as long as it is targeted in the right way. 

"Technologies such as G.Fast will serve cities and other densely populated sufficiently where distances to the nearest cabinets are relatively small, so government needs to focus its investment in areas less likely to be served by these initiatives.

"If targeted at traditionally harder-to-reach areas such as rural districts and market towns, this investment fund could give the economy a major boost.”

Aston University’s Prof. Andrew Ellis said larger operators are more likely to win funding as they already have customers in less populated areas.

Aston University’s Prof. Andrew Ellis said larger operators are more likely to win funding as they already have customers in less populated areas.

According to Ellis, the commercial case for infrastructure development is lower outside urban areas, where service variability is also greatest, but the potential for economy growth is just as great.

He believes this means investment may need to be focused on larger operators that already have existing customers in these less densely populated areas.

Ellis also pointed out that the government was correct in identifying ‘fibre-to-the-property’ as the future. He believes the technical capabilities of the commercial solutions available here  ‘far outstrip’ even the promised capacity of alternative options. 

“Unlike ‘fibre to the roadside cabinet’, which has been the focus of investment so far, providing fibre to the property removes the distance dependence of broadband and offers significantly higher speeds.” said Ellis. “This will eliminate the confusion of ‘up to’ speeds which plague disappointed internet users.”

Professor Will Stewart, VP of the Institution of Engineering and Technology, described the Digital Infrastructure Investment Fund as “long overdue” and a “very welcome first step” in ensuring communities across the country have much needed access to reliable broadband.  

He said the funding will help the UK move to a full fibre-wireless future encompassing 5G and fibre, eliminating “outdated” dependence on copper. 

“This will ensure that our communications infrastructure is future proofed, as fibre doesn’t need replacing – but we’ll need further investment and commitment from government and industry to integrate 5G within this new infrastructure,” said Stewart.

Meanwhile, CityFibre said the new investment is in line with its view that infrastructure competition is the only way for the UK to close its “yawning” fibre gap with other developed nations.

The company’s CEO Greg Mesch said: “Britain’s industrial strategy needs a digital backbone, and it is essential that we move quickly to plug the UK’s ‘fibre gap’ and empower our service-based economy. 

“This new funding, stimulating competitive fibre rollout at scale by new communications infrastructure builders, is a catalyst for the delivery of the UK’s fibre future.”   

CityFibre claims to be the UK’s largest competitive investor in wholesale fibre infrastructure, and is already present in 40 towns and cities across the country. Its ambition is to expand to 100 cities by 2025.