Speech by Ed Vaizey.
Good morning everyone.
I would like to thank the organisers of the 2013 Cable Congress, and in particular the UK’s very own Virgin Media, for inviting me to speak today.
Before I begin, I must also say how pleased we all are that the 2013 Cable Congress is taking place here in London. We pride ourselves on the strength of the UK’s online economy, and it is, I think, appropriate that the Congress is taking place in one of the world’s most connected cities.
You will, I’m sure, be hearing at length about investments and new technologies from experts in the field. I would like to say a few words about this Government’s priorities in the online and telecommunications fields, what we are doing to support the tremendous investment in broadband, and where we go from here.
If I were to summarise the priorities, I would need only one word: Growth. Our number one aim is to get the British economy moving again and support the businesses, both large and small, that will drive this. And I believe that the digital, creative and communications industries have a key role in this.
We want to see continued investment in Britain’s online industries, but we also need to ensure that the whole British economy enjoys the digital services and connectivity it needs to innovate and expand into new markets. A truly connected Britain that is open for global business the cornerstone of our ambitions for growth.
The UK is already a world leader in the online economy, with the internet contributing over 8% of GDP. Our flagship businesses are tapping into global markets, and our consumers enjoy excellent choice and services when choosing their broadband and phones.
However, the pace of technological change is such that we cannot afford to stand still. We are doing well, but I want us to do even better.
Continued private investment is key to achieving this, and nowhere more so than the field of superfast broadband. If we are to build a world class connected Britain, investment in our broadband infrastructure must keep up with both technological innovations and the ever increasing requirements of business, and consumers.
While we are on the subject of investment, I should mention the planned takeover, subject to shareholder agreement, of Virgin Media by Liberty Global. First, I am of course delighted that this will bring a new major company headquarters to the UK. Second, I welcome the prospects this will bring to continue investment in Virgin Media’s cable network here in the UK. As I said earlier, this investment is what keeps the UK’s online economy moving forward. This represents a great opportunity for the broadband market in the UK and, in particular, the rest of Europe. This can only be good for creating a world-class connected Britain.
Firms like Virgin Media and BT lead the way when it comes to investing in our broadband infrastructure, and I must applaud the work they are doing and the capital they have committed. Virgin Media’s investment in doubling customers’ speeds is future proofing the network and opening up new opportunities for our online companies, and is only one part of its multi-billion pound programme.
BT is rolling out its optical fibre network deeper into the local market than ever before, and has developed new products like its fibre on demand packages. The UK market also supports many smaller firms, often investing significantly to deliver ultrafast services to local communities. The pace of change is impressive – BT is making fibre available to 100,000 new homes and businesses per week, and combined with Virgin’s upgrade figures, take-up of superfast services in the last quarter alone was well over 650,000.
In mobile broadband, we are seeing vital investment by mobile operators, first by EE with their launch of 4G last year and now by other operators in readiness for their nationwide rollout of 4G services later this year. It is this commercial investment that has driven innovation and growth within the sector, and we as Government are doing everything we can to support this work.
Our aim is to remove the barriers preventing investment and innovation, and demonstrate that Britain is one of the best places in the world to do business online. So we will remove barriers and red tape. We cannot allow rollout to be delayed by planning refusals, or confusion when carrying out street works, or by long running legal issues over access to private land.
Our goal is to provide certainty, to ensure the money invested in rollout is used to take superfast broadband further and not wasted on delays and disputes. It is important that the regulatory framework governing the telecoms sector is fit for purpose and competitive. While this of course sits with Ofcom, we are committed to ensuring the market fosters competition, supports multiple, innovative providers, and results in greater consumer choice.
We have also taken significant steps to support mobile broadband. The successful 4G spectrum auction, whose winners were announced two weeks ago, is a vital part of this. We directed Ofcom to proceed with the auction, and brokered agreement with the mobile operators to allow this not only to happen, but to happen 6 months early. Similarly, we are planning for the future by overseeing the release of significant bands of public sector spectrum to the market.
The pace of change in the world of mobile is very fast, and we are determined to ensure Britain is ready for the challenges ahead.
The Government is also intervening in areas where commercial investment is not viable, through a major investment programme of £1.2 billion of public money. Through this investment, and working in partnership with industry, we will see much faster speeds, millions more homes and businesses able to enjoy these speeds, and a market which boasts high competition and low prices, particularly compared to our European neighbours.
On this latter aspect, the UK’s broadband market is already in rude health. Ofcom’s European scorecard, which was published today shows that the UK currently benefits from low prices and a high degree of competition in the broadband market, and that the UK has the best deals available for consumers across a selection of pricing bundles in the major European economies.
It is important that rural areas are not left in the slow lane when it comes to broadband access. We are bringing superfast access to 90% of UK premises, and a minimum of 2 megabits per second to everyone else. Rapid progress is being made on the rural programme: 11 projects have now signed contracts, and are either in progress already or about to start work. The remaining projects are entering procurements at a rate of one per week, and all should have completed their procurement phase by this summer.
the Government’s investment is already delivering faster connections for consumers – I visited North Yorkshire in December to unveil their first active fibre cabinet, and last week saw the unveiling of the first Welsh cabinets in Bangor. It is worth noting that the Devolved Administrations in Scotland, Wales and Northern Ireland will all benefit from significant central government investment in their broadband infrastructure, delivering a key part of driving UK growth and investment.
Similarly, our £150m urban broadband programme – working closely with local authorities and the private sector – will ensure that our cities can compete with the best in the world. You just need to look at the success of Tech City here in London to see how establishing a digital hub with world class connectivity and expertise can spur today’s innovative idea into becoming the online business of tomorrow.
But we cannot create a world class connected Britain just by laying more fibre in the ground or building new base stations. It is also crucial that we get as many people as possible online enjoying the benefits presented by better connectivity, and also encourage British companies to expand and develop their internet-based operations. Ultimately it is users that will turn infrastructure investment into growth.
We are therefore ensuring that demand stimulation is incorporated into our Government-funded projects. The tireless work of Martha Lane Fox and Go ON UK, for example, has been vital in getting more people online and demonstrating how people’s lives can be changed for the better by embracing the digital world. We are exploring ways to encourage high speed takeup as part of our urban programme. And demand stimulation remains a key focus of all our local rural broadband projects, with a particular emphasis on SMEs.
It’s worth reflecting that, in a recent report on Britain’s broadband, the think tank Policy Exchange found that 79% of British businesses have a website, but only 36% allow online payments. So not only do we need more businesses online, but more businesses with the skills, expertise and confidence to branch into online sales and exploit the global marketplace.
But we are also well aware that doing more online presents challenges as well as opportunities. Embracing e-commerce will open up new markets, but also represents potential risks, for example around online fraud or website security. For consumers, the fear remains of personal data loss or online scams. This is why we are ensuring that the regulatory framework protects online businesses, customers and other users, while supporting a competitive and innovative market.
Then, there is content. While our brilliant, innovative creative industries are driving growth in this sector – generating over £36 billion every year – the Government is ensuring that we provide them with support by way of tax breaks for animation, video games, high end TV and the film industry.
Finally, let me repeat a point I made earlier: in building a world class connected Britain and supporting our internet economy, we are doing well, but the Government wants to ensure we are doing even better. This Government is committed to delivering the broadband infrastructure and services we need to compete with the best in the world.
Our rural projects are moving rapidly from procurement to spades in the ground, the spectrum licenses are in place to allow the rollout of 4G services this summer, and our reforms to cut the red tape facing providers are already underway. It is crucial that Government, regulators and commercial providers continue to work together to achieve our goals to increase demand and encourage innovative broadband usage. We have invested heavily in improving our infrastructure - let’s now make full use of it.
By working closely with the industry, I’m confident that we can realise our ambition of Britain as a world class connected country, a strong market for consumers, and a great place to do business.