Major reform needed to meet UK broadband targets

The Social Market Foundation has warned that the government’s pledge to deliver full fibre broadband to every home by 2025 is likely to be missed unless ministers make radical changes to telecoms policy.

The think-tank said that, despite a promise of an extra £5 billion to broadband roll-out, full fibre broadband coverage stands at just 14 per cent across the country as a whole, meaning that the Prime Minister has a ‘mountain to climb’ if he is to reach the target for universal coverage.

The SMF said that target will only be hit if ministers adopt a range of changes to broadband policy, including reforms to reduce the telecoms industry’s risks of investing in new networks and to make sure that customers can afford to move onto new services.

To combat the issue, new ‘demand management’ measures should be used, where central and local government should commit to purchasing full fibre broadband services for public sector buildings such as hospitals and schools, as a means of providing some “certainty of demand” and encouraging industry investment.

In a report on ‘full-fibre to the premises’ rollout, the SMF calculated that the UK is lagging far behind other economies on broadband penetration, including Spain, New Zealand and South Korea. The think-tank recommends the creation of new New Zealand-style ‘Local Fibre Companies’, jointly run by public sector bodies and private companies, to deliver the broadband in remote and costly areas.

Scott Corfe, SMF Research Director, said: “Delivering the rollout of full-fibre broadband fairly and quickly is hugely important for the UK economy, and all the more so because of pandemic restrictions that have left so many of us working and socialising online.

“The 2025 target is extremely ambitious and the UK still has a mountain to climb to reach it. Getting there will require some radical changes, especially in how the public sector uses its huge buying power to support demand for broadband and offer the industry some certainty that funding new networks will pay off.

“To keep the Prime Minister’s bold promise of connecting every household in the country by 2025, minsters should look to the example of New Zealand and ask whether Britain’s Brexit outcome could allow the creation of new local public-private companies to deliver the most expensive final miles of the new network.”

The SMF also called for a greater focus on consumers, warning that recent developments in the broadband market mean consumers risk being left with fewer choices and higher prices for a service that has become all the more important to many households because of the coronavirus pandemic.