Author - Matthew Evans

BSG Report: Local Benefits for Full Fibre and 5G

The Broadband Stakeholder Group publishes research by Oxera to help local authorities understand the localised economic benefits of full-fibre and 5G

Key localised economic benefits of full-fibre and 5G include:

  • Local authorities can see up to 3.2 per cent increase in new businesses operating in the area. If reflected in business rates, a local authority could see an increase in gross revenue of over £10,000[1]
  • Existing businesses will see an increase in productivity which should result in an expected increase in turnover of up to 3.8 per cent per worker per annum
  • Local authorities can realise direct benefits by being able to implement more innovative public service delivery whilst driving down costs, such as through increased cloud adoption.

 The Broadband Stakeholder Group (BSG) has published new research to help local authorities understand the economic benefits that are available to them through the deployment of very high capacity networks such as full-fibre and 5G.

Local government is pivotal to the ability of telecoms operators to deploy the networks and infrastructure essential to the UK for both current and future connectivity needs. The telecoms sector is used to engaging with local authorities countrywide and as such understand their competing pressures and obligations. Local authorities’ cooperation in deploying our future communications networks is critical. This report seeks to complement the BSG’s previous research[2] into how to best engage with operators by setting out the positive benefits that the next generation of communication technologies will deliver.

Using the ONS categorisation of geographical areas across the UK,[3] local authorities can use this framework to understand the practical benefits that full-fibre and 5G can deliver in their specific area depending on their locality. The report, which draws on a comprehensive review of existing empirical studies and reports on the impact of full-fibre and 5G connectivity, examines the positive benefits that these very high capacity networks will deliver in the form of;

  • Benefits to existing businesses; the evidence shows that they could see a productivity increase of up to 3.8 per cent in turnover per worker per annum in some cases
  • New businesses; an estimated 3.2 per cent increase in the number of businesses operating in areas which have poor levels of coverage today
  • Increases in employment; a mix of safeguarded jobs or new employment of up to 1.7 per cent in some areas.
  • Private benefit to consumers; expected increase in consumer surplus for digital communications as they benefit from new services.
  • Benefits to local authorities; increased economic activity as well as direct benefits in improved public service delivery.
  • Wider society impact; harder to quantify but important improvements in areas such as inclusion.

These improvements will change depending on the make-up of the local area, driven by factors such as population density, sectoral composition, population density, baseline telecoms coverage, and take-up rates.

Matthew Evans, CEO of the BSG, said Industry is committed to delivering the Government’s aims of nationwide full-fibre by 2033 and 5G to the majority of the population by 2027.[4] These are ambitious timescales under the current policy and regulatory landscape and are intended to be delivered with minimal public funds. It is a strategic civil and digital infrastructure deployment. This upgrade of our national digital infrastructure will not happen without close engagement between Government and the private sector. We need sufficient capital, sufficient skills and the cooperation with every local authority in the country.

“Many reports already estimate the benefits that full-fibre and 5G can bring to the UK economy making the overall business case while ensuring that central government plays its role in facilitating this investment. But what does it mean for Manchester, Merthyr Tydfil or the Midlothian hills? Without knowing the answer to this question, it is understandable that there is a disparity amongst authorities in how they engage with and approach builders of digital infrastructure. This report seeks to address that gap.”  

Felipe Florez Duncan, Partner and Head of TMT, and Matt Shepherd, Principal and Infrastructure Planning lead at Oxera, said: “The roll-out of very high capacity networks such as 5G and full fibre broadband networks will have important impacts on consumers, businesses and local authorities.

However, the deployment of these networks will require discussions and action at local levels. This study sets out how those local impacts can be thought about and assessed. This will enable those interested in this subject to think about what these impacts will be in their local area and, importantly, to develop strategies to realise those benefits.”

This report establishes the framework against which we can measure the success of full-fibre and 5G deployments. Naturally, we will look to revisit the evidence base which fits into this framework as the roll-out continues. Whilst we have used international literature in the case of full-fibre, as a new technology, the evidence base for 5G is loosely based on the capacity and speed elements of the technology. As the evidence base for the applications of 5G involving low latency or as a driver of internet- of-things-based solutions expand, we would expect to see a further increase in benefits that it can bring to local areas.

You can find a copy of the summary report here. 

You can find a copy of the main report here. 

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[1] The Prime Minister’s constituency falls within the Borough of Hillingdon. Its business rate revenue is forecast to be £387,894 in 2018/19.

[2] http://www.broadbanduk.org/publications/publications/

[3] These areas are based on ONS statistics ranging from mainly rural to urban with major conurbation.

[4] https://www.gov.uk/government/publications/future-telecoms-infrastructure-review

 

New BSG Report: Preparing for the UK’s all-IP future

  • The UK is moving to an all-IP (internet based) network for voice services
  • The current analogue system, the Public Switched Telephone Network (PSTN), will come to the end of its life in the mid-2020s with transition also needed to prepare for our full-fibre future
  • As well as providing voice services, many other applications, such as social care and security alarms, use the PSTN
  • The report provides lessons from four international case studies which are further along their migration path, giving evidence on how the UK can prepare for a successful and seamless migration from the PSTN to all-IP networks.

The Broadband Stakeholder Group (BSG) has published a report on “Preparing the UK for an All-IP future: experiences from other countries”. It outlines the lessons the UK can learn from four international case studies as we migrate from the Public Switched Telephone Network (PSTN) to all-IP voice services and networks.

The PSTN provides voice and some data services within the UK. It is nearing the end of its life and is increasingly expensive to maintain. A move to all-IP networks lowers costs, brings additional benefits to voice services and helps prepare for the eventual retirement of copper networks – a necessary move as we forge our full-fibre future.

The migration is necessary but raises two particular challenges. The first is the continued provision of voice services, in particular, resilient access to emergency services in the event of a mains power failure which is especially important for the vulnerable and those who are landline-only users. The second is around the data services that use the PSTN. Some of these will not be compatible with an all-IP system as they rely on the analogue capabilities of the old network.

In order to ensure that the UK’s migration is as seamless as possible, the BSG commissioned Plum Consulting to analyse four international case studies. Germany, France, Switzerland and New Zealand were chosen due to the different stages of their migration and their differing regulatory structures.

Guidance on how to communicate and protect vulnerable consumers who may be particularly dependent on voice services is a key feature of the report. As the migration will be led by individual communication providers, it is essential that the industry effectively coordinates its messages to both consumers and providers of services that are dependent or reliant on the PSTN. Other insights focused on the benefits of minimising the forced migration of users away from the PSTN as well as the potential technical challenge posed by the UK’s approach to number portability.

Richard Hooper, chair of the BSG, said: The UK is well placed to manage a successful migration from the PSTN to all-IP networks. Industry is already taking measures such as providing test facilities to companies that provide data services. However, this report makes clear that we need to continue to strengthen this work to avoid the pitfalls other countries have made and protect vulnerable consumers. It is particularly urgent that industry works together with Ofcom and ensures that the messaging to consumers from communication providers is consistent.”

Read the full report here.

Government publish no-deal legislation for telecoms

The Government last week published the Statutory Instrument (SI) covering the telecoms regulatory framework under the EU Withdrawal Act.

The affirmative SI will need to be actively approved by both Houses of Parliament and is largely technical in nature – correcting references or processes in legislation (eg Communications Act 2003) that were established to ensure a harmonized application of regulation across the EU. Naturally, as the UK will no longer be in the EU these are being removed.

However, there are some amendments which are more significant. In particular Government has decided that it does not need to replicate the EU Commission’s oversight role of Ofcom with a new third-party body. In the explanatory notes the Government explains that they understand the Commission’s role to be one of ensuring a standardized application of regulatory approaches across member states. Although most in industry would suggest that such an oversight body (rather than the Commission per se) provides a useful and cost-effective route to providing a challenge to regulatory decisions.

This goes against the recommendations in the BSG’s Brexit paper in which we argued that such a review process allowed for proper scrutinisation of decisions and helped maintain quality decision-making by Ofcom. It was assumed that the Competition and Markets Authority would be a suitable body, but Government has felt that this was unnecessary. Given that industry’s preference is to prevent a cliff-edge exit of the EU it is unlikely that these concerns will turn into full-blown objections but depending on the nature of the UK’s future relationship with the EU it will be interesting to see how thinking on the regulatory framework develops.

In terms of Ofcom’s interaction with BEREC, full membership is restricted to the regulatory authorities of EU member states. Whilst Ofcom would be allowed to be an observer, Government has also made clear that it would be open to Ofcom participating further should this be made possible under the new BEREC Regulation.

Government outlines telecoms investment pipeline

The week the Government set out their analysis of the National Infrastructure and Construction Pipeline, including investment in digital infrastructure out to 2020/21 financial year (h/t ISPreview).

The report illustrates the level of public and private sector investment into the UK’s key infrastructure sectors, extending out 30 years in some sectors. For Digital Communications it sets out investment for the next three years which aligns with current Government funding programmes and given that most companies have not made public commitments beyond then.

An appendix to the report contains further details of individual company’s commitments – such as Virgin Media’s Project Lightning – through to Government projects for clearing the 700MHz spectrum band.

It will be interesting to keep an eye on these funding commitments next year as the need for Government investment increases in order to deliver the outside in approach for full fibre investment outlined in the Future Telecoms Infrastructure Review. 

A long read – Forging our Full-Fibre and 5G Future

The Government has announced the conclusion of its Future Telecoms Infrastructure Review. The Review which was announced in the Industrial Strategy sets out the targets and overall policy framework for the sector for the next 15 years.

The headlines are a confirmation of the Government’s targets for full fibre coverage to reach 15 million premises by 2025 and full coverage by 2033, with 5G coverage by 2027. The targets and accompanying policy shifts – in particular the change in competition models – mark a significant evolution in the Government’s approach.

Commenting on the publication of the report the BSG’s Chair, Richard Hooper CBE, commented The BSG welcomes the Government’s publication of its Future Telecoms Infrastructure Review and is pleased to be playing a useful role in barrier-busting in implementing fixed and mobile networks, and in PSTN switch-off which is the important precursor to fibre switchover.”

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Forging our 5G Future: Barriers and Solutions to network deployment

The Broadband Stakeholder Group has published a report on ‘Lowering barriers to 5G deployment‘. It outlines the challenges and solutions to deploying new mobile infrastructure necessary to meet the UK Government’s ambition to be a 5G leader.

The report – ‘Lowering barriers to 5G deployment’ – is the outcome of a study by Analysys Mason researching barriers to 5G deployment from both industry and local authority perspectives in the UK, identifying key challenges faced during the deployment process. The report aims to assist the UK Government in delivering its ambition to be a 5G leader by identifying and proposing solutions to current and potential barriers to network deployment.

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What would a National Broadband Plan look like?

The UK telecoms industry is awaiting Government’s Future Telecoms Infrastructure Review which we expect to see over the next few weeks. Whilst it is still unclear what the precise measures will contain the recently published National Needs Assessment from the National Infrastructure Commission offer a few clues.

Their headline recommendation was to call for a National Broadband Plan. So what might such a plan look like and what would it mean for Government policy in telecoms?

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Government launches review into incentives for network investment

The Government has published the Terms of Reference for a review into future investment into the UK telecoms sector, led by DCMS. The cross-government Future Telecoms Infrastructure Review will explore what makes investment in full fibre and 5G networks attractive, and what actions Government may need to take in order to deliver on its vision.

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Silver linings in failure: Benefits of the MIP

I’ve written before about why the Mobile Infrastructure Project (MIP) failed to live up to its expectations. In summary, building infrastructure is hard in any case and it’s even harder when neither the problem you want to solve nor solution are agreed upon by the parties involved. Last week though the Government published the Mobile Infrastructure Project: Impact and Benefits Report so it’s only fair to pay attention to the benefits that it delivered too.

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