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Broadband: Full-fibre Coverage

Volume 792: debated on Tuesday 24 July 2018

Private Notice Question

Asked by

To ask Her Majesty’s Government how they intend to deliver full-fibre broadband coverage, and what will be the cost to the taxpayer for these improvements.

My Lords, the Government have set out a package of measures in the future telecoms infrastructure review to meet their ambition for national full-fibre coverage by 2033. This seeks to create conditions that will support commercial investment by reducing costs through barrier busting, and create a stable regulatory environment. Additional funding will be required to make sure that all parts of the country are able to enjoy the benefits of world-class connectivity. This will be agreed as part of the forthcoming spending review.

My Lords, as the Minister knows, those of us on these Benches and the adjacent Benches who worked on the Digital Economy Act spent a lot of time putting forward amendments to bring forward a full-fibre network. We should therefore welcome the Government’s conversion to this cause and their realisation that 4% coverage is a national shame. However, to get 100% coverage in 15 years will cost many billions of pounds. Please remember that if the money is coming from commercial sources, in the end it will be the consumer who pays and reimburses those commercial concerns. Clearly the Government must have a funding plan, otherwise these promises would merely be shallow. Will the Minister tell the House what the funding plan is—how much, and who pays?

My Lords, I am glad that the noble Lord welcomes this ambitious target, because he has been one of the people who have been very critical of where we are at the moment. He is absolutely right that it will cost money. This is an ambitious target to get from where we are now, which is 4%, to nationwide coverage by 2033. We think we will get to about 50% by 2025. It is estimated that it will cost about £30 billion. We estimate that the Government will have to contribute with top-up money to the hardest-to-reach areas in the region of £3 billion to £5 billion.

Last Thursday, my noble friend Lord Stevenson of Balmacara asked the Minister’s colleague, the noble Viscount, Lord Younger of Leckie, whether he was backing the Chancellor of the Exchequer’s call to switch off every copper phone line in the UK to force telecoms firms to improve their rural broadband speeds. The noble Viscount, Lord Younger, said that he had not heard about it, but I am sure the Minister at the Dispatch Box today has had time to consider the Chancellor’s words. Does he back the Chancellor’s call to switch off every copper phone line in the UK?

I think what the Chancellor was referring to was an ambition that in due course—we are saying by 2033—there will be nationwide coverage of fibre to the premises, which I think everyone understands is superior in every way to copper wire. Therefore, if we have nationwide coverage of fibre to the premises, we will not need copper wires.

My Lords, where I live in London I have superfast broadband, something like 70 megabits a second. That is fibre to the green box in the street and old copper wire to my premises. Is that not totally adequate for nearly everybody? Would it not be a huge waste of money and very disruptive to do the last bit in fibre?

I think that it will be sensible by 2033 because there will be a long-term investment by the market in what is the technology of choice. My noble friend is fortunate to live near enough to the cabinet that he gets that sort of speed from his copper wire. Basically, the further you are from the cabinet, the worse the speed gets. I notice he did not say what speed he gets at his other home in the Isle of Wight, which I believe is slightly slower than that.

Will the Minister assure the House that rural areas will not miss out once again with regard to this development, as such a facility is so important in developing rural economies?

My Lords, the noble Lord makes a familiar and very valid point. The £3 billion to £5 billion that I mentioned to the noble Lord, Lord Fox, will be on the basis of outside in. We want to make sure that the areas that are hardest to reach will be the ones to receive the government money. It is largely a question of competition. In cities and urban areas, there is more competition and the market is better able to supply the required infrastructure, but in rural areas we understand that that is not the case and therefore we are absolutely cognisant of the point he made.

My Lords, some years ago, I bought a house in a remote rural part of the country. It had no supply of electricity, nor of water. I knew that when I bought it; that was the advantage of it, it was in a rural area. We cannot just say that wherever you live you get every one of the facilities as though you were living in an urban area.

Where I live, in a reasonably rural area, water was not laid on to houses until relatively recently. I think most people today think that running water in your home is a requirement. I take my noble friend’s point. He may not want superfast, let alone ultrafast broadband, but more and more people do, and it is important for the economy. More people need it, so, gradually—as we said, by 2033—it will be available. Of course, he does not have to use it or sign up for it and therefore will not have to pay for it.

My Lords, further to that question, what does the Minister have to say to people in my former constituency—in, for example, the Ettrick and Yarrow valleys—who, far from waiting for fibre broadband cannot even get email services at present? Surely the Government should be concentrating on that as well as the future.

Many people in the noble Lord’s party have castigated us for lack of ambition. On the one hand, we absolutely understand that they should be able to get superfast broadband, but we are also ensuring that the universal service obligation, which comes in in 2020, will give them a legal right to a minimum speed which will allow them to have email and watch TV at 10 megabits per second. Our ambition, which we are talking about today, is to go much beyond that, as it is an accepted rule that most people require more capacity as time goes on—there will be the internet of things and many other examples of why we need more capacity. I take his point and we are addressing it in the universal service obligation.

My Lords, I am grateful for the ambitious targets that Her Majesty’s Government are setting. I am concerned, however, because the commitment to get universal coverage for full fibre does not seem to fit with the statement on page 8 of the review:

“In areas where it may not be cost effective to get fibre all the way to the home, even with additional funding, other technologies … can also deliver gigabit connectivity. Bidders will be encouraged to explore innovative solutions”.

How does that fit with Her Majesty’s Government’s commitment?

I think, if the right reverend Prelate looks at Hansard, he will not find that I use the word “universal”. In terms of full fibre to the premises, we said that we would have nationwide coverage by 2033. As he suggested, the hardest to reach areas will not be able to get full fibre by 2033. When full fibre is established nationwide, other technologies, such as satellite, will have much more capability, so the hardest to reach places will be able to use alternative technologies. The universal service obligation will still apply and will be uprated in time. We did not say that every premises in the entire United Kingdom will be able to get full fibre by 2033.

My Lords, I fear that the Minister may have misunderstood what the Chancellor said in the other place last week. The Chancellor is widely reported as having been overheard by journalists as saying that he was considering fixing a switch-off date for copper wiring to incentivise broadband installation across the country, not what the Minister has reported to the House, which is that when it is all done, a switch-off date will be fixed. The Chancellor said that quite clearly, and it was supported subsequently by a spokesman from the Treasury, who confirmed that the Treasury was looking at options, including setting a switch-off date to incentivise the installation of broadband. That is what my noble friend was asking the Minister whether he agreed with, not what he understood that the Chancellor had said.

Of course I agree with everything the Chancellor says—unless he is contradictory, of course. I take the noble Lord’s point about the switchover. Ofcom will have an important oversight role in protecting consumer interests. The switchover could be under way in the majority of the country by 2030, but the timing will ultimately be dependent on the pace of fibre rollout and on the subsequent take-up of fibre products.