Autumn Statement gives some official information on the £400m for FTTP
The Autumn Statement is now online and the full 72 page PDF gives the detail, but that is still spartan, the broadband elements are reproduced below:
- £400 million for a new Digital Infrastructure Investment Fund, at least matched by private finance, to invest in new fibre networks over the next 4 years, helping to boost market ambitions to deploy full-fibre access to millions more premises by 2020
- a new 100% business rates relief for new full-fibre infrastructure for a 5 year period from 1 April 2017; this is designed to support roll out to more homes and businesses (39)
- providing funding to local areas to support investment in a much bigger fibre ‘spine’ across the UK, prioritising full-fibre connections for businesses and bringing together public sector demand. The government will work in partnership with local areas to deliver this, and a call for evidence on delivery approaches will be published shortly after the Autumn Statement (10)
- providing funding for a coordinated programme of integrated fibre and 5G trials, to keep the UK at the forefront of the global 5G revolution; further detail will be set out at Budget 2017 as part of the government’s 5G Strategy (10)
- The NPIF will provide additional support in order to support the market to roll out full-fibre connections and future 5G communications, delivering a step change in broadband speed, security, and reliability. £25m in 2017-2018, £150m in 2018-2019, £275m in 2019-2020 and £290m in 2020-2021.Extracts covering Broadband in 2016 Autumn Statement
The big surprise was the five years of relief from the burden of the fibre tax and this may encourage existing operators more than the investment fund itself. The change in position on business rates is also key to ensuring that 5G roll-outs happen quickly and deliver the promise since the high density of masts needed means easy and cheap access to fibre will be needed, those city and town centres where Wi-Fi networks offer blanket coverage via street furniture are in a good position already to exploit 5G, so expect to see more of these Wi-Fi roll-outs as the pre-cursor to full 5G hardware becoming available.
The part about the Digital Infrastructure Investment Fund being matched by private finance is crucial to how many premises the £400m will reach and while we have seen TalkTalk and Virgin Media talking about costs of under £500 per premise in urban areas, rural areas have examples of £1,500 per premise and studies suggest possibly higher, so a lot will depend on how the fund managers make use of the fund and which operators access the fund as opposed to going it on their own with direct access to private finance or just relying on community funding. So while its possible we will see 2 million extra premises, it might be as low as 500,000 it all depends on what pent up frustration there is from FTTP providers about ready access to funding to increase their footprints.
The fate of rural businesses and households is still in the hands of the continuing superfast roll-out and how and when the Universal Service Obligation becomes law. Fingers crossed some FTTP operators will access the new funding to roll-out in rural areas, but there is nothing to guarantee that.
We may see some operator announcements about the new funding, but it is highly likely that nothing serious will happen until firms can be sure what will happen with the BT Group and Openreach, i.e. the decision from Ofcom expected in December. If BT puts in the investment Ofcom wants (no one knows what this magic figure is but Ofcom has said £6bn is not enough) and lets Openreach remain in the BT Group competing as a small operator will be difficult, if Ofcom force does a full split and Openreach gets the finance promised to invest in widespread FTTP beyond existing plans competing is harder, if Ofcom does nothing and regulates to ensure the failings in the fault and install times are resolved the alternate operators gain another few years to gain a larger foothold and should in theory have much more enticing products based around full fibre i.e. no copper involved.