For years, the previous government had stuck rigidly to the view that they would not advocate a technical solution to improving the UK's digital infrastructure.
But for many, including manufacturers, the market was not providing what was needed. As the importance of digital infrastructure ramped up their list of needs, with 91% saying it is as important as electricity or water, calls for a mandated solution grew.
This importance is being driven by a shift towards SaaS and the 4th industrial revolution. Manufacturers have been investing in digital infrastructure to match the requirements for reliable, resilient and symmetric connections that both SaaS and 4IR require.
Reliability is core with 75% of manufacturers agreeing that ‘when it comes to internet connections, better reliability is more important than faster speed’.
EEF made the case that a mandated fibre to the premises (FTTP) rollout was needed - even going so far as suggesting that if the market didn’t provide, we may need to consider a public solution to deliver a backbone in the guise of National Grid, Network Rail, Highways England etc.
And then the new government proclaimed – fibre is the future!
So it is written, so it shall be done
And with that we had a consultation, which concluded today, on how best it should be done with a way forward expected at Budget 2017, less than a year after the policy shift. If this is a sign of the government's new ambition on this topic, then manufacturers will be cheering them on.
The consultation set out a range of different options to deliver this.
The outcome that should be set as the main ambition is the creation of a robust, geographically extensive fibre spine which can be used for backhaul purposes by a variety of providers.
While a commercial approach has delivered extensive coverage, with 91% of properties now having access to superfast broadband coverage, this new requirement of full fibre may not be delivered quite as extensively or as quickly.
EEF's view is that a two stage process is needed
The first step is a short duration public sector demand aggregation approach. Over 12 months the government should work with public sector bodies to identify public sector buildings to be potential anchor customers for full fibre connections.
This work would add the most value if the focus is put primarily on non-urban locations to help ensure backhaul connectivity is spread across a large geographic area.
Following the completion of this process and subsequent plans put in place for implementation, the government should follow up with a voucher scheme for private sector demand aggregation.
Using information on existing locations of fibre backhaul and the list of public sector anchor customers, the government would be in a good position to target the private sector voucher scheme based on the following requirements:
- Increasing the maximum grant from £3,000 to a figure developed with infrastructure providers to take into consideration the increased cost of laying a network over longer geographic distances. The ambition should not be ‘to get as many connections as possible’, but to find strategic connections to rural businesses that genuinely build out the network.
- Limiting the grant to businesses currently the furthest distance away, by using location data to pinpoint fibre blackspots. This will ensure the wider UK network of digital infrastructure is genuinely built up in areas that will lack full fibre provision based on public sector demand aggregation and commercial rollout.
Avoiding a blind target
Delivering this would be a game changer for Britain, supporting rural and small firms to boost their levels of productivity now, while maximising their long-term productive potential.
But blind ambition should be avoided, in making a decision at Budget 2017, the government should be clear on its target. Just as we had with the superfast broadband rollout, the government should set out a percentage target for household and business access to FTTP. Currently just 2% of properties in the UK have FTTP access.