It is one of the more surprising aspects of the current UK general election campaign that broadband policy has been hitting the headlines as one of the main controversies. Is a more radical approach to broadband policy desirable and feasible? Dr Steve Unger, affiliated researcher at the Bennett Institute, gives his insights to the current policy debate.
For the Conservatives, Prime Minister Boris Johnson stated that the targets for full-fibre broadband set by his predecessor were ‘laughably unambitious’, and pledged to deliver ‘full fibre for all … in five years at the outside’.1 Now we’ve seen Opposition Leader Jeremy Corbyn respond with a promise to deliver ‘full-fibre broadband to every home, in every part of our country, for free’.2
Both have committed to public funding for full fibre, but Corbyn reckons that ‘the most efficient and rapid way to deliver a broadband network fit for our times, and make it a genuine public service for all’, is to re-nationalise Openreach.
What should UK voters make of this debate? I led Ofcom’s Strategic Review of Digital Communications, which concluded in 2016 that there was a need for a ‘strategic shift to large-scale fibre deployment’.3 Prompted by the debate generated by these proposals, I want to take another look at three key questions:
– Why do we have poor availability of full-fibre broadband in the UK?
– What is already being done to address this?
– Is a more radical approach needed?
What’s the root of our current problems?
Accurate diagnosis is essential for effective treatment. That’s particularly important in the current debate, given that poor availability of full fibre (8% of UK premises4) is being used as evidence of historic failure, and the need for radical change. However, the current position is in fact the result of a deliberate choice made during the early stages of broadband deployment.
Full-fibre technology has been available for many years. For example, it was trialled by BT in the early 1990s.5 However, when the time came for mass-market, commercial deployment of broadband, the fastest way of making services widely available was to use advanced electronics to drive more data down the existing copper wires.
That’s why almost everyone in the UK (95% of UK premises) now has access to superfast broadband. By contrast, those countries which prioritised full fibre have a much lower availability of superfast broadband. For example, 28.3% of French households had full fibre in 2017, much better than the UK, but only 55.5% had access to superfast broadband.6
Reasonable people can disagree as to whether we made the right choice. But the relatively low level of full fibre availability in the UK cannot be used as evidence of a structural failure.
What’s currently being done?
There is now a broad consensus that the transition to full fibre is needed. That’s not just because fibre can deliver faster speeds – indeed other aspects of the consumer experience may be more important. Full fibre should ensure that the headline speeds used to market broadband services are delivered in practice, and will greatly improve service reliability.7,8
The steps which have already been taken to achieve this include the following:
– Openreach has become a separate legal entity from the rest of BT, governed by its own Board, and directly employing its own staff. The Board has an independent Chair and a majority of independent directors. The aim is to make Openreach more responsive to all of its customers.
– Ofcom has promoted competition between different networks in order to drive investment in full fibre. Openreach must let other companies access its ducts and poles. If Openreach does not use them to lay fibre, others can.
– The market will not deliver for everyone. So Ofcom and Government have committed to making ‘decent, affordable broadband a universal right for every home and small business in the UK.’ From 2020 a broadband universal service scheme will give everyone the right to request a decent broadband connection.
It is too early to judge the effectiveness of these measures, but early indications are promising. Several competing providers have raised capital to invest in full fibre.9 Openreach has responded with a ‘Fibre First’ strategy, is currently covering 1.2 million new homes and businesses per year, and expects to scale up to at least 3 million.10
This should make it possible to hit Jeremy Corbyn’s target for full-fibre deployment (10 years), though the last 10-12% of UK premises will be challenging. Current plans will not be sufficient to hit Boris Johnson’s target (5 years), but most commentators are sceptical that this is achievable in any case.11
Is there a case for radical change?
There are now two radical options on the table thanks to Mr Corbyn’s election pledge: nationalisation, and free broadband for all.
It’s important to consider the case for nationalisation in pragmatic terms. There are examples of private monopolies where regulation has been insufficient to deliver good outcomes, and a form of nationalisation is a credible alternative.
However, I do not believe that nationalisation is a sensible way forward for telecoms, where competition is currently driving high levels of investment and innovation.
Before 1981 telecoms was the responsibility of the state-owned Post Office, and the last major review of its performance before privatisation was in 1977.12 The major investment programme of the day was a plan to digitise the UK telephone network, described then as a ‘make or break’ project for the country. The review was highly critical, noting for example that that ‘decision making is a slow process and specifications have a tendency to become rigid and over-elaborate.’ Let’s not go back to those days.
As for making broadband free, this would destroy private sector investment and set an odd precedent for other essential goods and services.
I am, though, sympathetic to the underlying ambition; to make fit-for-purpose broadband affordable for everyone. The current broadband universal service scheme sets out to achieve this, but its specification (a download speed of 10Mb/s) will be inadequate once much of the country starts to benefit from gigabit broadband.
The Scottish Government is already committed to superfast broadband for everyone in Scotland. If additional public funding is available, then a practical next step would be to extend this commitment to the whole of the UK – something surely any party could sign up to during the campaign.
Footnotes
[1] Column in Daily Telegraph dated 16th June 2019
[2] Speech dated 15th November 2019
[3] See https://www.ofcom.org.uk/phones-telecoms-and-internet/information-for-industry/policy/digital-comms-review/conclusions-strategic-review-digital-Communications
[4] Connected Nations, Summer 2019 update, Ofcom
[5] Plans for a British trial of Fibre to the Home, T R Rowbotham, Second IEE Conference on Telecommunications, 1989
[6] Broadband Coverage in Europe 2017, Report prepared for the European Commission by IHS Markit and Point Topic
[7] The performance of all broadband services is somewhat unpredictable due the fact that different users share the same network. However, the performance of copper-based broadband is particularly difficult to predict since it depends on the length and quality of the copper wire used to provide service. Broadband speeds below those which are advertised by providers has been a major source of dissatisfaction amongst consumers.
[8] Fault rates on the Openreach fibre network are half those on its copper network, and should decline further as the technology matures
[9] See https://www.ofcom.org.uk/about-ofcom/latest/media/media-releases/2019/further-ofcom-rules-to-support-fibre-investment
[10] See https://www.openreach.com/fibre-broadband/fibre-first/
[11] See https://www.ispreview.co.uk/index.php/2019/08/the-challenge-of-boris-johnsons-2025-full-fibre-for-all-uk-pledge.html
[12] Report of the Post Office Review Committee, chaired by C F Carter, published July 1977
The views and opinions expressed in this post are those of the author(s) and not necessarily those of the Bennett Institute for Public Policy.
