Labour Party Pledges £1.6bn to Deliver 30Mbps UK Broadband for All

Reports claim that the UK Labour Party has committed to invest £1.6bn in order to ensure that 100% of premises can access a minimum broadband speed of 30Mbps from supporting ISPs within 4 years, which is a step up from the current plan for a 10Mbps Universal Service Obligation (USO).

The idea of a 30Mbps USO (usually accompanied by a minimum upload of 6Mbps), which Ofcom and the Broadband Stakeholders Group have previously estimated could cost up to a max of £2bn, is nothing new and indeed Labour first pledged it as part of last year’s 2017 General Election Manifesto; the House of Lords has also touted it a few times. But thanks to the FT (paywall) we now know how much funding Labour would commit.

By comparison the current Conservative Government is in the final stages of implementing a new legally binding 10Mbps download speed USO (1Mbps upload), which will be introduced from 2020. Many have criticised the decision to set the USO speed so low but it’s worth considering the coverage plan for existing “superfast broadband” networks and the potential complications of adopting a faster minimum.

At present the national £1.7bn Broadband Delivery UK programme already anticipates that 30Mbps+ capable fixed line broadband should cover around 97-98% of premises by 2020, which means that the primary focus of any USO will be on that final c.2%. USOs are usually only intended to cater for an absolute minimum starting level of service performance (legal backstop), which must be available upon request from a supporting ISP (i.e. not an automatic upgrade).

One other concern with a 30Mbps USO, other than cost, is that it might damage the growth of alternative network ISPs, particularly if BT (Openreach) were chosen as the primary supplier (i.e. risk of rebuilding a monopoly position). Distorting the competitive market would not be desirable at a time when the Government and Ofcom are also trying to foster competition for Openreach (mind you they don’t always get this balance right).

Admittedly Labour hasn’t yet fleshed out whether their ’30Mbps for all’ style proposal would reflect a true legally binding USO or merely a soft service commitment, with the latter perhaps requiring some form of competitive tender process, like the BDUK scheme (this might mitigate some concerns about market distortion – depending upon the detail).

The current Government would no doubt counter by saying that they’ve recently pledged to support a huge national roll-out of 1000Mbps capable “full fibre”.

However, the longer-term 2033 goal is obviously many years away and it’s been suggested that around £3bn – £5bn of public funding would be needed to help deliver this to the final 10% of premises, which we assume would be matched by private investment. Even then we strongly suspect that more money may still be required to deliver universal FTTP.

The problem is that so far the Government has only said roughly how much the full fibre roll-out would cost and they haven’t actually committed the funding or said where it might come from. As we’ve said before such a long-term deployment strategy would also require strong cross-party support, which is necessary to avoid the usual problem of policy changes during elections. Not so easy with the current level of deep ideological divisions between parties.

Meanwhile some telecoms operators appear to be informing the FT that Labour hasn’t yet engaged with the industry over their 30Mbps proposal. Mind you that’s fairly normal and we tend to only get the detail on such policy ideas once a party enters government, assuming that ever happens. It’s worth noting that the Liberal Democrats also support a 30Mbps policy and they proposed a cost of £2bn.

Source: ispreview