There has been a round of announcements on digital infrastructure this week, some new, some updating previous policy – much like the Spring Statement (see our roundup on that from EEF’s Chief Economist here.)
The key one for manufacturers is the announcement of a national rollout of the Gigabit Broadband Voucher Scheme, £3000 to cover the capital costs of getting new gigabit-capable connections to businesses and households. Essentially a scheme to expand or ‘build out’ the geographic reach of the UK’s budding full-fibre digital infrastructure (just 3% of premises in the UK have access to full-fibre according to Ofcom).
For manufacturers a reliable internet connection is paramount
Digital infrastructure is a key part of the modern business environment for manufacturers with 91% saying that an internet connection is as essential to business as electricity or water. This importance is being driven by a shift towards Software as a Service 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. Over a third of EEF members have invested in a dedicated leased line driven by the need for reliability with 75% agreeing with the statement ‘‘when it comes to internet connections, better reliability is more important than faster speed’.
"We have to have a very expensive leased line because broadband is so poor and unreliable in both the areas where we have factories (The Black Country). I believe there is a calculated policy by BT Openreach to retard rollout of fast broadband to industrial areas in order to maximise their income. If I had fast reliable broadband I would need less BT lines." – EEF survey respondent
But not all manufacturers can afford to pay for a dedicated line or are too far away from fibre nodes to make these commercially viable. These companies are being left in the dark and have to rely on unreliable copper connections.
We need an innovative approach to fixing the problem
The central challenge is how can we deliver the fibre connectivity businesses need nationwide through a commercial market. The recreation of a voucher scheme is a part of the solution and we’ve been engaging with officials to make the case for this to form part of a two stage approach.
The first stage should focus on using public sector assets to build out the network, the second, a strategic voucher scheme to expand the network to areas not reached in the first phase – achieved through limiting voucher access to businesses the furthest away from nodes and raising the value of the voucher (from £3000) to cover building over longer distances.
Read next: How to make full fibre digital infrastructure a reality.
From Government - a phased-ish approach
As part of Wave 1 of the Local Full Fibre Network Programme, the government has been testing the market on the use of public sector anchor customers (e.g. schools) and the reuse of public sector assets such as ducts already used for things like CCTV systems.
At the Spring Statement the Chancellor announced further funding for a second wave (with a third wave coming in summer 2018) to build on this public sector approach. This sits alongside the voucher scheme announcement – however the value of the voucher has not been increased.
Will it work?
The success of these schemes are as yet unclear but the Government (and officials) should be commended for a taking a phased approach to testing what works given that in the UK digital infrastructure investment is driven by the private sector.
At a recent meeting of the Business Connectivity Forum, EEF quizzed officials on the metrics that will be used to test the success of the Local Full Fibre Network Programme and they are focussed in the right place:
- The number of direct Gigabit capable fibre connections, the number of properties now within 50 and 200 metres of fibre nodes and the wider economic benefits unlocked as a result of a business taking up a fibre connection.
We’ll be keeping a close eye on these metrics to ensure the geographic coverage of the UK’s full-fibre network is built out giving manufacturers access to the reliable digital connections they need to take advantage of the 4th industrial revolution.
Read our fact card: What is the 4th industrial revolution?