The shift to full fiber has been taking place on a global scale for over a decade. On a weekly basis ‘build and connect’ announcements are being made from all players in the market, it would seem that the UK is on the ball and powering ahead with its full fiber revolution.
The UK in general has improved its full fiber coverage up from 1 percent back in 2012, but it still playing a long game of catchup with the rest of the world. As of December 2020, the number of UK properties with access to full fiber to the premises (FTTP) connectivity sits at 5.1 million (18 percent of all premises). And according to research from Cable.co.uk, the UK sits at the unenviable position of 81st in Europe for FTTP connectivity and 47th in the World for broadband speed.
The UK government is also being more cautious on its pledges. In November 2020 it announced that it had rolled back its plans for ubiquitous ‘gigabit-speed’ broadband by 2025 - amending the figure to ‘a minimum of 85 percent’. It came as no great surprise to the digital infrastructure industry, the target to connect 100 percent of UK homes and businesses has always been seen as a pipe dream.
The ‘superfast broadband’ currently accessed by over 95 percent of UK premises, is delivered by Fiber-to-the-Cabinet (FTTC) technology - a blend of copper and fiber optic cables. The fiber only goes as far as the street cabinet and it’s the copper line that connects the cabinet to the premises. It’s a technology that was once world-leading but is no longer fit for purpose and may once have been enough to deliver the connectivity needs of a nation pre-pandemic. The lockdown struggles of home working, online education and healthcare, as well as virtual family connections, have been compounded by often patchy broadband - and the nation is demanding more.
What the UK needs a ubiquitous true full fiber to the premises (FTTP) network - a dedicated future-proof connection where the fiber optic cables are laid all the way into residential and commercial properties. One of the main barriers to the deployment of a UK-wide FTTP network is funding.
The cost of full fiber
With an estimated price tag of around £30billion building, and rolling out, a nationwide full fiber broadband network is no mean feat. It’s a major national infrastructure project. Primary responsibility for broadband policy and coverage targets sits with the government - telecommunications is a reserved power. And the full fiber infrastructure is an intrinsic part of the government’s investment in projects to improve the UK’s long-term competitiveness and help to kick-start the economy post-Covid-19.
With this in mind, the government made a series of budget announcements and pledges in 2020 to revitalize Britain’s broadband. All communicated as part of the nation’s levelling-up agenda. The Spending Review 2020 included £100bn of capital spending in 2021-22. Over £260 million is being earmarked for transformative digital infrastructure programs, including the Shared Rural Network for 4G coverage, Local Full Fiber Networks, and 5G. A £5 billion commitment to support, and subsidize, the rollout of gigabit-capable broadband to the hardest to reach areas of the UK (but only £1.2bn being made available up until 2024) was also made.
Then just before Christmas, Scotland’s Full Fiber Charter – a series of pledges by the Scottish government to help extend full fiber broadband across Scotland – was announced. Followed by the DCMS’ announcement in January of a consultation on the changes to the Electronic Communications Code. This is the regulation that governs the rights of telecommunications operators to install and maintain their apparatus on public and private land.
Added to this is a whole raft of government funding options, from Broadband voucher schemes for small businesses and rural residents, and the Local Full Fiber Network (LFFN) Programme. But this may not be enough funding to achieve the levels of connectivity the UK expects and deserves - and potentially the new ‘minimum of 85 percent’ target.
Fiber deployment during Covid-19
The Covid-19 pandemic is not entirely to blame for the slow fiber rollout. During the first lockdown in 2020, the telecoms industry was added to the list of the critical sectors vital to the government’s response to the pandemic. It also made the decision to actively encourage local authorities not to introduce blanket refusals of permits or notices for street works. In pre-Covid times, the process to get the greenlight to undertake street works to install fiber could take up to 3 months.
The pandemic is continuing to hamper some parts of the full fiber connectivity supply chain, but the government’s response enabled network construction to accelerate. Those involved in the rollout of full fiber adapted to the working environment to ensure there was no significant delay to gigabit speed rollout across the UK.
However, while the government’s commitment to delivering infrastructure remains undeterred, the country’s fiscal position has substantially worsened. The pandemic has placed an enormous and unexpected burden on the UK economy. The resulting financial strain must not be allowed to derail the UK’s infrastructure spending ambitions.
Access to gigabit connectivity is an integral part of 21st century living and vital for economic and socio-economic growth, transforming communities with ‘smart’ initiatives and improvements such as better access to employment, education and healthcare. As FTTP infrastructure is future-proof there will be no restrictions on the introduction of new applications and services.
So, is private funding or investment the answer?
The government’s policy for ‘gigabit-broadband infrastructure’ has always been that it will be mostly built by private investment. At a time when public purses have been stretched by unprecedented Covid-19 support measures, the industry cannot, and should not, rely solely on public funding. The private sector now has an even more important role to play in helping to bridge the gap needed to deliver the government’s vision for future internet connectivity. And to ensure the UK is not being left behind in a global digital transformation shift. In this context, private funding and/or investment is one of the solutions available to fibering up, faster. In fact, private sector investment should be a major driver of the UK’s ‘infrastructure revolution’.
But it’s not always that easy for private investors to play their part. To support its ambitious infrastructure agenda and provide better connectivity, at good value for taxpayers, the government must reinvigorate the UK infrastructure market. The government, together with OFCOM, made a commitment to make policy reforms to promote a competitive market for the roll-out of gigabit- capable infrastructure.
A lack of clarity surrounding the availability of private investment opportunities within infrastructure projects still remains. It needs to be addressed and the government must commit to an approach that gives confidence to investors and capitalizes on the attributes of businesses and the public sector. This will help the UK to establish itself once again as a world class destination for investment.
One way of doing this to open-up - and communicate the availability of - individual regional or local digital infrastructure projects to multiple external investors. Not only does this present a huge and scalable opportunity it could open-up a more sustainable territory for private investors.
The importance of allowing the UK digital infrastructure and telecoms sector to fiber-up faster has never been more pertinent. But in order to do this, the UK government needs to work with the industry to remove the private investment constraints. Then the telecoms industry can take control of the UK’s digital future, giving it the true FTTP network it deserves.
Mikael Sandberg, chairman, VX Fiber