Improving the UK’s digital infrastructure: public funding for fibre and 5G
On 23 November 2016 Chancellor Philip Hammond delivered the Autumn Statement where his announcements included improvements to the nation’s digital infrastructure. The announcement comes amidst… Read more
On 23 November 2016 Chancellor Philip Hammond delivered the Autumn Statement where his announcements included improvements to the nation’s digital infrastructure. The announcement comes amidst sentiments that the UK has fallen behind other countries with respect to the availability of high speed internet services.
The Autumn Statement announced the creation of a new National Productivity Investment Fund (NPIF) which will target four areas: digital communications, housing, transport and R&D. The NPIF will spend £23 billion on these four areas by 2022. In respect of digital infrastructure, Hammond stated that “[o]ur future transport, business and lifestyle needs will require world class digital infrastructure to underpin them”. Of the NPIF’s £23 billion, £740 million will be targeted towards two main objectives: encouraging the private sector to implement full-fibre connections and supporting trials of mobile 5G.
First, of the £740 million, £400 million is part of the Digital Infrastructure Investment Fund to fund the extension of fibre networks to more areas across the UK over the next four years. Fibre networks are faster and more reliable than traditional copper internet cables and the work envisioned is to extend the networks directly to people’s houses, rather than, as is currently the case, to a local connection point from which copper cables connect to the house causing the speed to slow down. Fibre-optic cables extending to homes directly is called “full fibre” or Fibre-to-the-Premises (FTTP) and avoids the slower copper cables entirely. The intention if for the £400 million to be matched by private investment. Smaller providers will be able to borrow from this fund so as to provide a competitive service.
A set of tax breaks will be available for internet providers for five years starting 1 April 2017 when the Government will provide a new 100% business rates relief for new full-fibre infrastructure. The hope is to help smaller businesses by reducing the cost of fibre and thereby supporting extension to more areas. The intention is also to provide funding to local areas to support investment in a larger full-fibre network across the UK. On 29 December 2016 the Government opened a call for evidence seeking views on how public funding can be better used to encourage further and faster deployment of full-fibre broadband networks. The review is set to close on 31 January 2017.
Second, the Government is aiming to provide funding for fibre and 5G trials. 5G stands for fifth generation and is expected to be rolled out in 2020. It will greatly increase download speeds and is expected to provide connections for up to a million mobile internet users per square kilometer. 5G will also allow the use of much higher quantities of data enabling for instance streaming of high-definition media on mobile devices without Wi-Fi. Research into 5G also seeks to improve support for the internet of things (IOT). Additional details are expected in due course, with confirmation of the allocation at Budget 2017.
The overall goal is to bring faster and more reliable internet access across the UK, boost the next generation of mobile connectivity, and keep the UK at the forefront of the development of IOT.
With reliable, fast internet service now considered a basic expectation and many feeling that the UK has lagged behind other countries in terms of speed and connectivity, the announcement of public funding being earmarked to tackle these problems can only be seen as welcome. The coming years will show how the extension, including by smaller industry players, work out, how successful the tax incentives are, and what the results of the 5G trials are. What can at this stage be surmised is that the Chancellor acknowledges that the UK’s digital infrastructure needs upgrading and has a keen desire to stimulate improvements, which in turn shows an appreciation by the Government of just how essential access high speed broadband really is.