Following on from Chris’s blog yesterday, today’s blog focuses on one pillar of a supportive industrial strategy – more reliable and resilient infrastructure.
Manufacturers rely on modern physical infrastructure for the transportation of goods around and in and out of the country. But it is not just roads, rail, airports and ports that manufacturers need.
Digital infrastructure is fundamental to UK manufacturing, but the cost, reliability and access is a challenge.
Manufacturers understandably attach a high degree of importance to their internet connectivity with 91% agreeing with the statement ‘a high-speed internet connection is as important to business as electricity or water’.
Looking to the future, there are worries from the sector that the UK will not have the right infrastructure in place to support future needs
– more than 50% of manufacturers say their current internet connection is not adequate for their expected needs over the next five years (only 35% said it was).
In rural areas, and business parks particularly, businesses feel they are being left out in the cold as residential access is prioritised.
To address this the Government should adopt a two pronged approach at the Autumn Statement, firstly a focus on getting the foundations in place for a future digitally enabled Britain and secondly on addressing shortcomings with current provision.
Establishing a comprehensive ‘fibre to the premise’ strategy
Industry requires reliable and resilient broadband – of which speed is just one aspect. Other issues include a delay in receiving information (latency) and poor reliability. Businesses also increasingly need a balanced upload and download speed (symmetrical connections) which existing infrastructure was not built to accommodate. Additionally, as the same infrastructure is used, the issues businesses may have with reliability and resilience will remain the same regardless of which broadband provider they take.
All of these issues are tied up in the copper network that underpins the BT Openreach network. While Fibre to the Cabinet may improve speeds, reliability will still remain an issue from the cabinet to the premise, as copper will still be used.
A full Fibre to the Premise rollout will not only deliver on speeds but also resolve the issue of reliability, latency and resilience, while also future proofing the networking in a way that no current technology solution can.
Recently announced Ofcom remedies may address these challenges and boost fibre take up – but this will not be enough to boost fibre rollout from its current low of just 2% of premises. A clear framework from government – providing objectives behind broadband policy, the stages at which it will intervene and why – should be set out.
Ofcom’s remedies need a much clearer framework from government on objectives and milestones and just as they have done with setting out a new Universal Service Obligation, government must be prepared to take leadership in mandating a full Fibre to the Premise rollout before it’s too late. This strategy should outline a full open access fibre to the premise rollout by 2025 and a clear plan on how we will get there including the regulatory approach from Ofcom, Government interventions and investment, and infrastructure provider investment. This should include clear milestones that will show us we are on the right path and the remedies that will be taken to deliver the ambition.
The Government should also learn lessons from the rollout of superfast broadband and ensure this new Fibre to the Premise strategy has a separate target for rollout to business premises.
Establishing a rural focussed Connection Vouchers Scheme
The Government’s previous Connection Vouchers Scheme proved successful in boosting the take up of business grade connectivity in cities amongst SMEs, with the fund running out before the closing date of the scheme.
While the scheme boosted take up in cities, rural businesses – most of whom are being bypassed by the superfast broadband scheme in favour of property dense residential areas - have been left behind.
Businesses have legitimate reasons for being based in rural areas, from access to specialist local talent, local resources and supply chain expertise – many of these will have been built up and entrenched over time. Despite this, commercial rollout of digital infrastructure continues to fail rural businesses.
As Ofcom noted in its Connected Nations 2015 report:
- Coverage of superfast broadband in rural areas was just 37% in 2014 vs. a UK average of 83%
- 48% of premises in rural areas can’t receive a speed greater than 10Mbps
- 18% of SMEs are still unlikely to have access to superfast broadband beyond 2017, the date set by government for 95% of superfast broadband coverage across the UK
The Government should announce a new round of the Connection Vouchers Scheme with additional eligibility criteria to focus the scheme on rural SMEs. These include:
- Increasing the maximum grant from £3,000 to £15,000 to take into consideration the increased cost of laying a network over longer geographic distance
- Limiting the grant to businesses currently the furthest distance away, by setting a minimum ‘distance from exchange’ geographic limit around a business premises to ensure the wider UK network of digital infrastructure is genuinely built up in areas without existing business grade provision.
- Maintaining existing policy from the Connection Vouchers Scheme, in particular the ability to pool with other businesses and allowing all infrastructure providers who sign up to the scheme to bid for delivery.
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