Policy paper

1. Connectivity - building world-class digital infrastructure for the UK

Published 1 March 2017

By 2020, the volume of global internet traffic is expected to be 95 times that of 2005, and connected devices will outnumber the global population by nearly seven to one.1 In the UK, fixed internet traffic is set to double every two years,2 while mobile data traffic is set to increase further at a rate of 25% to 42% per year.3

Total mobile data traffic 2011-2016
Source: Ofcom Connected Nations 2016

The UK’s digital infrastructure must be able to support this rapid increase in traffic, providing coverage with sufficient capacity to ensure data can flow at the volume, speed and reliability required to meet the demands of modern life. Broadband and mobile must be treated as the fourth utility, with everyone benefiting from improved connectivity. This will play a crucial role in ensuring that everyone, wherever they live and however they connect, can make full use of digital services and benefit from participation in the digital economy. Improved connectivity also increases innovation and productivity across the economy, bringing significant economic rewards. Independent research suggests increased broadband speeds alone could add £17 billion to UK output by 2024.4

We will also look at connectivity in a more holistic way. There are a range of technologies that can provide next generation connectivity, from fixed line broadband, to mobile, wireless, and satellite connections. But for most people, it is the quality of connection that matters, not the means of delivery. Instead of focusing on the type of technology, we will focus on what consumers - households and businesses - need and want as they go about their lives where they live, work and travel in this digital age.


Business connectivity

World-class digital connectivity is increasingly vital for businesses in the UK. For example, in a CBI survey, 81% of firms said that they see more reliable mobile connectivity as essential.5 Now more than ever, we need to support them to grow and compete in a global environment, and to reach new customers and markets online.

We have already helped connect over 42,000 businesses through the Connection Voucher scheme. Over 80% of SMEs now have access to superfast broadband (based on Ofcom’s higher measure of download speeds of at least 30 megabits per second (Mbps)) up from 68% coverage a year ago. But it is clear that more needs to be done. Business connectivity continues to lag residential connectivity, whilst 8% of small businesses, mainly in rural locations, do not have access to broadband speeds of 10Mbps or above.

We are determined to close the gap with residential properties and drive up the quality and reliability of coverage for businesses. This means ensuring that businesses are at the forefront of future broadband roll-out, including full fibre. In December 2016, we published a Call for Evidence on full fibre roll out and will publish its findings, and next steps, alongside the summary of the findings of the Business Broadband Review, in spring of this year.

We are also working with Ofcom to ensure the market structure for broadband delivery is right. This includes increasing transparency on the location of digital infrastructure, so that local businesses can work with the communications industry to ensure that they get the connectivity they need to thrive.

To ensure this work is fully co-ordinated, we will establish a new Business Connectivity Forum, chaired by the Department for Culture, Media and Sport, that will bring together business organisations, local authorities and communications providers to develop specific solutions to the issues faced by businesses in accessing fast, affordable, reliable broadband. The Forum is a recommendation of the Business Broadband Review, and further detail on its remit and membership will be set out in the Review’s Summary of Findings.


Effective regulation

It is essential that we continue to create conditions that encourage investment in the UK’s digital infrastructure. A strong, stable regulatory regime is at the heart of this, with Ofcom - the UK’s independent communications regulator - protecting the interests of consumers, by promoting competition. Strong competition will help ensure the private sector meets consumers’ needs and demands, keeps pace with technological change, and provides commercial investment in digital infrastructure.

We are also using regulation to make it faster and cheaper for operators to build and develop digital infrastructure:

  • the Access to Infrastructure Regulations ensure digital communications providers can access other providers’ physical infrastructure, across a range of sectors, on fair and reasonable terms
  • reforms to mobile planning laws in England have reduced planning requirements, allowing new sites to be developed quicker and a greater number of small cells to be deployed
  • reforms to the Electronic Communications Code, made through the Digital Economy Bill, will further encourage an efficient use of infrastructure by promoting site sharing

We will continue to make it easier to build digital infrastructure, for example through exploring options around planning and wayleave agreements. And we will ensure that our regulatory framework recognises and supports the fact that the infrastructure required to deliver connectivity is converging - particularly as we prepare for the roll out of 5G.

Improved regulation of the consumer market will also play an important role in improving connectivity. We are working with regulators and industry to ensure that advertising for broadband more accurately reflects the actual speeds consumers can expect to receive, rather than a headline ‘up to’ speed available only to a few, and accurately describes the technology used, using terms like ‘fibre’ only when full fibre solutions are used. There should not be a gap between what is promised by providers and what is experienced by the consumer. The non-statutory Advertising Standards Authority has already made some progress in ensuring that broadband prices are made clearer and costs to consumers are not hidden, and we will continue to work with them to ensure that the advertising of communications is accurate and fair.


Working with local communities

Local communities are best placed to identify the connectivity needs of their local area. It is therefore important that they are able to work with communications providers to shape the roll-out of digital infrastructure.

We will encourage a locally-led approach by supporting partnerships between residents and local community bodies, including schools and public libraries. A range of tools and advice - including on government’s Go Superfast Checker website - are now available to make it easier for communities to identify their connectivity challenges and to establish community broadband solutions. This support includes examples of delivery models, technologies, financing options and case studies from similar communities in the UK.

Broadband Delivery UK (BDUK) also supports local authorities who want to jointly fund investment with communities to enable new infrastructure projects to go ahead. This is done in a number of different ways, for example by extending the scope of existing contracted plans by sharing the full cost of going further into high-cost areas.


Better connectivity for all

Broadband

£1.7 billion of public funding is already being invested in delivering broadband across the country. Over 90% of UK premises can now access superfast broadband, and we are on track to reach 95% of UK premises by December 2017. Through strong contractual value for money requirements, we have released additional funds to extend delivery, with 600,000 more premises expected to benefit by 2020.

We recognise that there will always be some premises that cannot be connected on a commercial basis. For families, public services and businesses in these hardest to reach areas, we want to ensure that everyone can access fast, reliable broadband. This is why we have committed to introducing a new broadband Universal Service Obligation (USO) by 2020. The USO will give every individual, business and public premise across the country the right to request an affordable high speed broadband connection, at a sufficient speed for an average family to make full use of the internet, up to a reasonable cost threshold. The legislation to enable us to do this - the Digital Economy Bill - is currently before Parliament. In December Ofcom published technical advice to government on the factors that will help inform the design of the broadband USO. We will carefully consider Ofcom’s findings before consulting on secondary legislation in early 2017. The terms of the USO will be regularly reviewed to ensure it keeps pace with consumers’ changing needs.

Mobile

The licence obligations arising from the December 2014 agreement between the government and industry have already locked in investment of over £5 billion to improve mobile coverage. Ofcom’s 2016 Connected Nations Report shows that 99% of UK premises now have indoor voice coverage and 96% have indoor 4G data coverage. And the report notes that 4G geographic coverage has increased substantially over the past year from 48% to 72% and this is set to increase yet further.

Progress towards near-ubiquitous 4G coverage
Source: Government estimates

As the recent National Infrastructure Commission report on the future of mobile connectivity set out, it is essential that outdoor mobile services - such as basic talk, text and data - are available wherever we live, work and travel. All four Mobile Network Operators each now have a legally binding obligation to reach at least 90% landmass coverage by the end of this year. Ofcom is responsible for enforcing these obligations and, through the Digital Economy Bill, will have the power to fine companies that do not meet them. By the end of 2017 we therefore expect 98% of the UK’s landmass to have 4G data coverage and at least 98% of UK premises to have indoor 4G coverage from at least one operator.

But we also recognise that we must go further to make better coverage and quality a reality for everyone across the UK. Government understands that the everyday experience of connectivity is important, not just the statistics. Where necessary to meet our ambitions, we will consider whether future auctions of radio spectrum should include commitments to increase coverage and reliability. Through the Digital Economy Bill we are also giving consumers greater clarity on services in their area by giving Ofcom powers to share data on coverage and network performance. Empowering consumers with better information will help them make informed choices on the best network for them and will promote competition to deliver improved connectivity for consumers.

Transport

Commuters on the UK’s train networks expect good connectivity on the move. Wi-Fi is being rolled out on trains across the UK, and we forecast that 90% of passenger journeys on Department for Transport-franchised lines will benefit by the end of 2018. We are taking steps to drive progress towards faster and more reliable free Wi-Fi across the train network. In new rail franchises, train operators will be required to tackle ‘not-spots’ on their routes and deliver high-speed connectivity to ensure Wi-Fi is fast and reliable across routes serving the majority of their passengers, so they can send emails, browse the web and social media, and make calls using Wi-Fi calling.

Coverage on UK motorways is high, with 97% receiving voice coverage from all operators.6 But significant improvements are needed to ensure there is a reliable connection across other major roads, not only so that consumers can make a call while on the move or in an emergency, but also as a means of enabling applications from real-time traffic alerts to emerging technologies such as connected and autonomous vehicles and smart motorways.

The Emergency Services Mobile Communication Programme is an important step in this process. By opening up this infrastructure for commercial use as far as possible we will extend coverage across the UK, including improving commercial coverage on roads.

Networks of the future: full fibre and 5G

We have to encourage the market towards ubiquitous ultrafast services but balance the additional benefits of increasing speed against the costs today of providing the infrastructure. Government has an important role to play to accelerate and de-risk the deployment of the next generation of digital infrastructure - setting the structures; supporting experimentation and testing; helping to reduce the costs; and above all for leadership and setting ambition. At Autumn Statement 2016 we made a clear commitment to digital connectivity, including the allocation of £740 million from the National Productivity Investment Fund to support the market to roll out of next generation digital infrastructures.

Delivering ultrafast speeds

There are existing networks that are capable of delivering ultrafast speeds (at least 100Mbps). Trials have demonstrated that G.Fast can provide ultrafast connections to premises up to around 300 metres from the cabinet - around 70% of premises. Cable (primarily provided by Virgin Media) is capable of delivering at least 200Mbps now, and there are plans to increase that speed. And the next iterations of each - XG.Fast and DOCSIS 3.1 - will give consumers even faster speeds.

Full fibre

Whilst there are a number of interim technologies giving connectivity at ever faster speeds, we believe that the future of high-speed and high-quality connectivity lies in deeper, more extensive fibre networks. To promote this, we will invest £400 million in a new Digital Infrastructure Investment Fund, which we anticipate will be more than matched by private sector investors. This new fund will catalyse the market for alternative full fibre providers by ensuring that they can access the finance they need to help scale the UK market for full fibre broadband.

We are also making further public funding available for the roll-out of full fibre broadband networks in partnership with local authorities across the UK. In December we published a Call for Evidence to ask stakeholders to consider and provide information on a series of options to support this deployment. The Call for Evidence has now closed, and further detail on next steps will be published at the Spring Budget 2017.

Public owned or funded networks, such as the Janet academic and research network, and Network Rail, offer another potential route to increase fibre connectivity. We will look at how these can be opened up to provide vital ‘backhaul’ infrastructure. This could help reduce the cost of fibre roll-out and consequently increase business and residential connectivity in hard to reach areas.

Our 5G Strategy

5G is the next generation of mobile connectivity, and is currently in development. It is expected to represent a significant upgrade: providing ultrafast, low latency, and more reliable mobile connectivity, able to handle our ever-increasing data requirements. This should present huge opportunities to boost productivity and grow the economy. In addition to giving consumers and business users high quality connectivity, it will also support the development of the Internet of Things: the rapidly-increasing number of connected devices, from connected cars to digital health applications. New fibre infrastructure will play a crucial role in the future deployment of 5G, which is likely to require extensive use of small cells (essentially mini base stations), connected to the core network by backhaul (usually a fibre connection).

We want the UK to take a leading role in the development and roll-out of 5G. If the UK is going to be at the forefront of the 5G revolution it will require concerted action from government, industry, academia and local areas both to develop the technology and deploy the networks to support it. We are developing a 5G Strategy, to be published at Spring Budget 2017, which will set out our vision for the next generation of mobile connectivity, and the steps we will take to realise that vision.


5G and fibre testbeds

As part of the £740 million of investment in digital infrastructure announced at Autumn Statement 2016, we will fund a coordinated programme of integrated fibre and 5G trials to help make sure that we are in the best possible position to exploit the considerable potential of 5G and future digital services for UK consumers and businesses.


Spectrum for connectivity

Better use of radio spectrum will also facilitate further investment and innovation in 5G technologies. We will deliver on our commitment to free up 750 MHz of public sector spectrum in bands below 10 GHz by 2022, having already made over half (384 MHz) available to use since 2010.

This includes continuing the approach set out in the 2014 Spectrum Strategy of charging government departments a market-based fee for their spectrum use, encouraging spectrum sharing and wherever possible making suitable spectrum available for advanced communications technologies such as 5G.