Establishing world-class connectivity throughout the UK
Report published July 19, 2016
A key function of the Department for Culture, Media and Sport is to manage the delivery of the superfast broadband programme and improve digital connectivity. In March 2015, the Coalition Government published a Digital Communications Infrastructure Strategy setting out the infrastructure they believed the United Kingdom needed to support a world-leading digital economy over the next 10 to 15 years. The challenge now is extending broadband coverage to all.
Some summary points include:
- ...there is a serious public concern that the UK is not adequately investing in critical telecoms infrastructure. The UK is a laggard by international standards in providing fibre connectivity. This could result in a widening, not a narrowing, of the digital divide; especially as demand for faster services escalates after 2020.
- The Government has determined that probably the most effective way of providing access to broadband for those in the “final five percent”, whether in rural, urban or suburban not-spots, is through the introduction of a Universal Service Obligation (USO) whereby a householder or a small business would have the legally enforceable right to an affordable and reliable internet connection.
- We believe that the Government is right to follow Ofcom’s advice to set the USO initially at a minimum of 10Mbps. However, the need for an increase in the USO minimum download speed to 30Mbps by 2022 is entirely foreseeable, and the Government will need to make active plans for this eventuality.
- We now believe there is a pressing need to liberate more of BT’s financing for investment in broadband and the evolution of its telecoms infrastructure.
- Should Openreach remain part of the BT Group under a strengthened model of functional separation, BT should be obliged to allow Openreach to raise finance independently in the capital markets in its own right, and to make investments that meet the business’s own cost of capital.