£190m of money for Gigabit broadband fund
More money for broadband roll-outs will of course be welcomed by the broadband industry and after years of what many see as favouritism towards BT, funding that can be used by other operators is going to be very popular. DCMS has announced some GBP190m of funding for a Local Full Fibre Network Challenge Fund, where the challenge is for the money to be used to stimulate much larger commercial investment i.e. this money seems to be intended to seed projects that will firms to explore much more grandiose plans than upgrading connectivity for a councils CCTV network.
World class connectivity is increasingly essential to people at work and at home. It’s vital to ensure the UK’s future competitiveness in the global market and our ability to attract investment.
Full fibre is fundamental for fashioning a Britain fit for the future. Minister for Digital, Matt Hancock
Our understanding is that the money is part of a larger GBP1 billion figure mentioned a year ago and that rather than being a vague arm waving sum, by declaring this new fund it is now clear what the intention for the money will be. The funding will be available to local authorities, combined authorities, local enterprise partnerships and other bodies such as NHS Clinical Commissioning Trusts so that they can do things like improve their own connectivity but also use this to stimulate wider investment e.g. by funding work to deliver full fibre connectivity between council buildings the hope is that the commercial operators will also other full fibre services to business parks and ultimately residential premises.
Importantly this money is not available to national authorities such as the Welsh Assembly and Scottish Government, but local authorities and other bodies in those countries will be able to access the funding. Full fibre as in business grade broadband is not new, the technology is well understood and widely available so long as your wallet was deep enough, but by encouraging much more activity in this area the hope is that the costs will drop from eye watering levels to much more reasonable installation costs and then once pricing drops into the consumer arena we can start to challenge other European countries on full fibre coverage levels. Mentioning Europe brings us onto an important point, with Brexit on its way funding for broadband via the ERDF is going to stop and while it is can be easily missed the existing local authority superfast broadband projects often involve some money from Europe.
So it is reasonable to suggest that all the new investment we are seeing is not strictly new, but a replacement for what we might have expected to be able to get by continued applications for EU funding for many areas. At its worst level this money will get spent on a many case studies and be used for upgrading local authority connectivity and then nothing else result beyond a much faster and hopefully more productive digital infrastructure at the local authority. The best outcome would be encouraging a full fibre operator to an area, where the local authority becomes an anchor tennant, followed by business parks gaining much better connectivity at pricing not much more than the superfast options available now (and those with just pure copper options getting decent options for the first time) and subsequent to this residential roll-outs.
Looking at the GBP190m in a blunt manner, divided between an average cost of GBP800 per premise for full fibre you are looking at this fund delivering 237,500 extra full fibre premises, hence for the fund to be seen as a success the need for it to stimulate additional commercial investment and deliver connectivity that meets internationally accepted standards for counting premises as passed by fibre is pretty clear.