Superfast Fibre Broadband

Lord Ashton of Hyde Excerpts

Thursday 27th October 2016 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord Ashton of Hyde) (Con)]

My Lords, I will speak as quickly as I can because there is a lot of ground to cover. I am most grateful to the noble Lord, Lord Foster, for securing this debate and for all the contributions to it. Like the noble Lord, I live in an area with slow broadband and I share the experience of the noble Lord, Lord Aberdare, of using a good local supplier—Wurzel in my case rather than ResQ—which produces 50 to 70 megabits per second, but that is not available to everyone. The other thing I should say is that I am looking forward very much to being invited to a party in Suffolk where the main topic of conversation seems to be broadband. There is rightly a lot of interest in the superfast broadband programme and we agree that fast broadband is increasingly regarded as a necessity of modern life. I agree with virtually all the points made by noble Lords that the question is how we will get there. So I am delighted to have the opportunity not only to celebrate what we have done to date—and that is a lot—but also to reassure noble Lords that we are doing even more to ensure the delivery of the sort of broadband service that is required for the UK not just for today but for tomorrow, which all noble Lords have spoken about.

I know that some noble Lords are worried that we are in the slow lane, so to speak, in terms of broadband speed. I cannot quibble with the statistics cited by the noble Lord, Lord Aberdare. I do not know how long it took him to find those rather depressing numbers because in part through the work done by Broadband Delivery UK, mentioned by the noble Lord, Lord Foster, we are sitting at the top of the EU five; Germany, Spain, Italy and France, and indeed we are 8% higher than Germany, our nearest rival. But I agree that within those statistics there are quibbles about upload and download speeds, average speeds and latency. However, that is not really the point and we want to make it better. When it comes to digital infrastructure connectivity, we want the UK to be not only the lead in Europe, we want to be a world leader.

Perhaps I may remind your Lordships at this point of the scale of the superfast broadband programme which in addition to the already extensive commercial rollout shows how much has already been achieved. We are investing £790 million to reach areas untouched by the commercial sector while local and European funding has increased that public investment to a total of £1.7 billion. In view of the concerns surrounding Brexit, it is also worth noting that all EU funding of broadband contracts is guaranteed for at least the next two years until the UK is officially no longer a part of the European Union. Along with the noble Baroness, Lady Scott, and the noble Lord, Lord Fox, I pay tribute to the support of local authorities and the devolved Administrations for their tremendous support and investment in the Government’s superfast programme. That reflects their recognition of the local benefits that superfast broadband can bring.

My right honourable friend Matt Hancock, the Digital Minister—I should say the Minister for Digital; he is a real Minister, body and soul—explained recently that our path to a more digitally connected UK can be envisaged as a three-part journey. First, we must complete the rollout of universal 4G and superfast broadband between now and 2020. Secondly, we must continue to drive connectivity in the areas of need, both rural and urban, and support a competitive market for delivery. Speaking of competition, in answer to the noble Lord, Lord Aberdare, on Openreach, we support Ofcom’s position on the need to improve digital connectivity, including looking into the position of Openreach. It is already subject to wholesale access regulation that allows other suppliers to access its networks. Third in our trio of priorities, we must start work now on ubiquitous 5G and fibre over the decade ahead—by that, I mean fibre to the premises, and I will come to that later if I have time. That is, of course, the future for broadband, as the noble Lord, Lord Foster, said.

In answer to the question from the noble Lord, Lord Fox, the reason we talk about fibre to the premises is in part a recognition of the need to improve upload speeds. I understand quite well the issue about BT’s investment in its copper, but that will have to be dealt with in due course.

The first step of our journey is progressing well. Indeed, the figures coming out of the BDUK programme to date are encouraging. More than 90% of homes and businesses now have access to superfast broadband, up from only 45% in 2010. In fact, 88% has reached Ofcom’s higher measure of 30 megabits per second, which the noble Lord, Lord Stevenson, mentioned. This will increase and be updated in December 2016. More than 4 million additional homes and businesses have access due to the Government’s programme. This will rise to more than 5 million additional homes and businesses by the end of the programme. We remain on track to get to 95% superfast coverage by the end of 2017.

In addition, more than 42,000 SMEs across 52 cities have benefited from superfast and ultrafast broadband connections because of the Government’s broadband voucher scheme. To choose a random example, coverage in Bath, the former constituency of the noble Lord, Lord Foster, is expected to reach 98% by December this year, well above the national average. At the moment, any home or business with speeds below 2 megabits per second can access a grant for better broadband through alternative technologies, such as satellite or wireless, through the Better Broadband Subsidy Scheme. In fact, 99% of UK premises have access to basic broadband, which is the best in the G8.

Furthermore, because of provisions in the BDUK contracts, funding is being returned by suppliers as a result of higher than expected take-up, so £129 million has already been made available, with at least as much to come again. Together with the project savings, local authorities and the devolved Administrations should have more than £400 million available to reinvest in superfast broadband coverage over the next three years. As a result of the superfast broadband programme, coverage should increase to around 97% by 2020. Indeed, 20 new broadband procurements are already being taken forward by local authorities and devolved Administrations using this funding and other local and European sources of funding that they have been able to access. This includes £14.5 million that the Government have allocated to support ultrafast broadband in south-west England. Each of these procurements is open to all suppliers, both large and small, to bid for.

As mentioned previously, we understand that fast broadband is very much a fourth utility in modern life and that the future most definitely lies with fibre and 5G. The challenge that we are now addressing is how to get there. It is important to have market innovation in this area, with the Government setting the framework and supporting competition at all stages to ensure the best outcome. The industrial strategy needs to recognise digital skills, infrastructure and the power of digital in the economy. I am sure that more details will be available in due course.

The importance of broadband to rural communities is well understood and unprecedented, and I speak from personal experience. As more and more government services move online, rural businesses and households need to be able to rely on a good broadband connection so that they can continue to operate effectively. That is why the Government announced plans last year to introduce the new broadband universal service obligation, of which many noble Lords spoke. This will ensure that anyone who does not benefit from the existing commercial or publicly funded programmes is not left behind. It will give all homes and businesses the legal right to a connection of at least 10 megabits per second on demand. The Digital Economy Bill will be coming before this House either at the end of this year or at the beginning of next year and we will talk about that then. Although it will be set at 10 megabits per second initially, the Bill includes a power to review the USO over time to make sure it continues to meet people’s needs, which the right reverend Prelate mentioned, but we realise that there are many details to be worked out, some of which were outlined by the noble Baroness, Lady Scott, and others. We will take all these difficulties on board and look at the detail behind the USO and we will be making crucial decisions in due course. In the meantime the USO needs to be passed in the Bill in this House.

To conclude I want to mention some points that noble Lords raised. The noble Baroness, Lady Pidding, asked how we identify not-spots. Ofcom undertakes mapping to do that. The noble Lord, Lord Foster, mentioned digital skills and we certainly want digital skills to be embedded in education. We are actively looking at what more is needed to increase digital skills. The right reverend Prelate asked about the final report on market pilots which tested new ways of delivering superfast broadband in hard-to-reach areas. That is due to be published by the end of 2016. That is about all I have time for. The noble Lord, Lord Foster, made a number of other points. We understand the problem of not doing enough to get fibre to the premises and we will be addressing that. We agree with driving take-up and I will write to him on that.

We are working hard and we are making progress. I think we all agree with the ultimate objective, which is to not be satisfied with just superfast broadband; we want fibre to the premises for everyone and we want increasingly high speeds because that is what the future will require.