Rural broadband and digital-only services - Environment, Food and Rural Affairs Contents


Appendix: Government response


The Government welcomes the Environment Food and Rural Affairs Committee's report on 'Rural broadband and digital-only services'. We recognise that fast, reliable broadband internet access is essential for all rural homes and communities throughout the country to benefit from online services, to help rural businesses to grow and compete globally, and that it is important in creating a fairer society. More than 80% of the UK is already able to access superfast services of at least 24Mbps, with services being made available to 40,000 extra premises every week.

The Committee expresses concern that rural areas are being left behind and that delivery timescales have slipped. We would like to reassure the Committee that the timetable is on track. We are on course to achieve 90% UK coverage of superfast broadband by early 2016 and 95% UK coverage by the end of 2017. At the same time we are exploring a range of technologies capable of delivering superfast speeds in the final 5% hardest to reach areas through our market test pilot programme and we will review the evidence from those pilots later this year.

The Digital Communications Infrastructure Strategy[1] published alongside the Budget announced a package of measures to support the UK's digital communications infrastructure. This included further support for broadband delivery in rural areas, including looking to raise the Universal Service Obligation to 5Mbps and subsidising the costs of installing superfast capable satellite services in some of the most hard to reach areas.

The EFRA report considered the move to an online only Common Agricultural Policy (CAP) system for rural payments. The report notes the Rural Payments Agency has taken a number of important steps to ensure that those with poor broadband speeds or those that lack the necessary IT skills can access the new service through a range of support opportunities.

Introduction

1. We have been keen throughout this inquiry to make sure that enough focus is placed on those who have no access to superfast broadband. There is a risk in the current approach that improving service for those who already have it will leave even further behind the 5% of premises who have none. There is a risk of poor rural broadband availability causing harm to farm businesses and the rural economy. It is essential that those who are 'hardest-to-reach' are given priority. (Paragraph 7)

The Government fully recognises the vital importance of fast and reliable broadband to all businesses and communities and to a growing economy.

The Government is committed to providing 95% coverage of superfast broadband by December 2017 and to ensuring that all remaining premises have access to speeds of at least 2Mbps by the end of 2015.

We are working to ensure the most hard to reach premises are not left behind. Our seven pilot projects are trialling solutions for rolling out in the hardest to reach areas. These pilots take account of the conclusions from BDUK's market engagement in 2013 which found that such areas may need solutions with different technology and operating models than those used to roll-out to the rest of the UK.

In addition, as announced in the Budget, we will launch a scheme with local bodies across the UK later this year to subsidise the costs of installing superfast capable satellite services for those currently on the lowest speeds in the hardest to reach areas. This will build on the Government's commitment that there will be at least 95% superfast broadband coverage by 2017 by offering a superfast capable solution to up to a further 1% of premises.

Alongside this, the mobile industry will make 4G available to 98% of the population over the next couple of years, which will revolutionise mobile broadband in rural areas.

Broadband availability

2. Repeated changes in target dates for rollout of superfast broadband inevitably reduce confidence that coverage will be achieved on time. They also leave those in the hardest-to-reach areas uncertain as to when their businesses will be able fully to engage with digital practices. Beyond business purposes, householders, particularly in rural communities, are being left behind in accessing online services that most of the country can take for granted. Activities as diverse as children's homework, online tax returns, and simply watching television now depend significantly on good online access. (Paragraph 13)

The Government is committed to ensuring 90% coverage of superfast broadband by early 2016 and 95% coverage by December 2017. The National Audit Office memorandum of 28 January 2015 confirmed we are on track to achieve these targets. In addition we will deliver a universal service commitment to give all remaining premises access to speeds of at least 2Mbps by the end of 2015.

The Budget commitment to look at raising the Universal Service Obligation—the legal entitlement to a basic service—from dial up speeds of 28.8kbps to 5Mbps would mean that consumers gain a legal right to request installation of 5Mbps capable services at an affordable price.

3. We were concerned to hear BT tell us that the present target of 95% of premises receiving superfast broadband by 2017 may slip. Broadband Delivery UK (BDUK) must make it clear that the target date must be met. A target date for when the last 5% of premises will obtain access to superfast broadband coverage must be published. (Paragraph 14)

The Government is committed to ensuring 95% superfast broadband coverage by December 2017. The seven market test pilots are exploring a range of technologies capable of delivering superfast speeds in the hardest to reach areas and we will review the evidence from those pilots later this year to inform future options.

Alongside this, the scheme to subsidise the costs of installing superfast capable satellite services for those currently on the lowest speeds in the hardest to reach areas will be launched later this year. This is to be funded jointly by central and local government using funding already in place to deliver the Government's Universal Service Commitment. The scheme will provide subsidised installation and equipment costs with customers paying the market rate for monthly subscription. Costs of satellite services will be dependent upon data usage.

4. For many services, 2 Megabits per second (Mbps) is already an outdated figure, and 10 Mbps is increasingly recommended as a suitable USC for standard provision. The Government must reassess whether the 2 Mbps Universal Service Commitment remains a valid one. (Paragraph 20)

The Government has no plans to change the 2Mbps universal service commitment for delivery by the end of 2015. However, many of the premises which are not yet scheduled to gain access to superfast broadband will have speeds higher than 2Mbps.

The Government is looking to raise the Universal Service Obligation from dial-up speeds to 5 Mbps to ensure that no one is left behind as faster speeds become available and are more widely used. The Government will consult on this change early in the next Parliament.

5. Millions of pounds are being invested in the rollout of superfast broadband at 24 Megabits per second. Within three years of the expected delivery date, however, that speed will no longer be considered 'superfast' by European standards. (Paragraph 22)

The Government's definition of 24Mbps for superfast broadband is based on the fact that speeds above this level can only be delivered using Next Generation Access technology. The European definition of 30Mbps has no specific technical or user basis for it. Most premises which can receive speeds over 24Mbps will also be able to receive speeds above the level of the European definition. The Government's rollout is future proofed. It is a requirement of the broadband framework contract that solutions have an upgrade path; for example, fibre to the cabinet could be upgraded to fibre to the premises if needed.

In addition, the Digital Communications Infrastructure Strategy sets out the long term vision for the UK and announced a new ambition that ultrafast broadband of at least 100 Megabits per second should become available to nearly all UK premises. This will be supported by market delivery and government action to remove barriers to investment and reduce red tape. This will ensure that the UK remains among the best connected nations in the world.

6. Councils need access to timely data from BT that allows them accurately to monitor take-up of broadband. Equally, they need access to timely data from BT about planned broadband coverage and speed. It has been argued that distributing information about broadband coverage on a postcode by postcode basis can be misleading. An 'enabled' postcode does not necessarily mean that each premise within the postcode is enabled. (Paragraph 25)

Councils are provided with quarterly data from BT on take-up both across the local authority area as a whole and at ward level. In relation to planned broadband coverage, the Government has encouraged all local authorities to publish roll-out plans and postcode checkers to at least 7 digit postcode level, and latest information is available on local authority websites. Publishing information to address level runs the risk of being misleading as the precise coverage of planned deployments will not be firm until implementation takes place.

7. We are surprised that no assessment of the first phase of contracts with BT has been published before the phase two and three contracts are signed. Phase two contracts being signed must include provisions to ensure that local councils and BT keep local communities up-to-date with planned broadband coverage and speed. Information about rollout should be delivered on a premise-by-premise basis as opposed to by postcode. (Paragraph 26)

The Government undertook extensive market engagement before commencing the phase two procurement process. No other supplier was identified which had the capacity, capability and commitment to deliver at national level. The Government therefore continued with the delivery model from the phase one programme, which allows Local Bodies to lead on procurements and to test the local market if they believe other suppliers are able to deliver at that level.

As a condition of their funding for the phase two projects, local authorities will be required to provide public information on roll-out plans to 7 digit postcode level. Publishing information to address level runs the risk of being misleading given the uncertainties involved before deployment takes place.

Broadband delivery

8. Fibre to the Cabinet (FTTC) is an efficient, cost-effective method of improving broadband in areas where premises are located close to their local street cabinet. However, this 'one-size-fits-all' approach to broadband delivery does not take into account the varied topography across the 44 local areas receiving broadband upgrade. FTTC allows those within a short distance of a local cabinet to experience the benefit of an upgrade to superfast broadband but can leave those already a long distance from the cabinet, and therefore experiencing slower broadband, with limited or no material change in service. (Paragraph 31)

We recognise that a mix of technologies will be needed to deliver superfast broadband throughout the UK. A wide range of technology solutions are possible to achieve the Government's objective, including fixed, fixed-wireless, mobile and satellite, as well as Fibre to the Cabinet. As one technology choice will not be suitable for all circumstances, the Government's approach to delivery remains technology neutral.

We are testing alternative technologies and operating models through our market test pilot programme. Projects are testing superfast satellite, fixed wireless and hybrid schemes to test their suitability for roll-out.

9. Satellite technology provides a potential alternative to those in remote areas where fixed-line delivery of broadband is impracticable or can achieve only very low speeds. However, it will not fill all the gaps. Satellite technology is not widely developed on a commercial scale in the UK and the technology itself can suffer from delay and reliability issues. (Paragraph 35)

Satellite could potentially have an important part to play in the mix of solutions available particularly in reaching the most remote rural communities. The Government is funding two superfast satellite projects as part of its market test pilots. The pilots will provide evidence of the reliability of the technology and customer experience, including issues around contention and latency.

10. The fact that Fibre to the Cabinet is not a suitable solution in every circumstance or every community means that alternative solutions, such as wider satellite coverage or Fibre to the Remote Node, are necessary. Alternative solutions are required not only to ensure that the current commitments of basic and superfast broadband are met but also to ensure that the infrastructure being deployed is future proof and able to meet demands for increasing broadband speeds. (Paragraph 38)

The Government agrees with the Committee that technologies other than Fibre to the Cabinet will be required in some locations. The seven market test pilots are testing solutions capable of delivering superfast broadband, including satellite solutions, in areas not covered by current programmes. The superfast capable satellite scheme in the hardest to reach areas will help people currently on the lowest speeds. We also continue to monitor other technological advances by industry. For example, fibre to the remote node is currently being tested by BT and this and other technologies can help fill gaps in coverage.

Digital-only services

11. The Rural Payments Agency have taken a number of important steps to ensure that those with poor broadband speeds can access its new Common Agricultural Policy (CAP) application software. It deserves credit for seeking to ensure a 'soft landing' for the new system, but, given the difficulties experience last time round, and in particular given the variable state of broadband access in rural areas, judgment must be reserved on the effectiveness of its preparations until they have been tested in action. (Paragraph 44)

12. The RPA must have a contingency plan in case the new online-only CAP application system proves difficult to use for farmers with limited broadband capability. The new software has not yet been tested by the number of users who will access the site in May, and some of those doing so will be using online services for the first time. The contingency plan should be able to respond to the software not functioning at the level required or with users not being able effectively to access the software. (Paragraph 45)

On 19 March, the RPA announced steps to ensure that farmers and their agents can complete their Basic Payment Scheme (BPS) claims on time. The core system for online applications and the registration portal continues to function effectively and we will be asking the remaining 15% of farmers who haven't registered, to do so online. However, the interface that farmers use to access the core system has not performed reliably, so for this claim year, the RPA will be offering farmers and their agents the use of established forms and processed to complete their applications. The RPA will then input this data on to the system. Apart from registering, farmers will not be asked to enter any further data online now. Data that has already been entered onto the system has been saved and will be used. Farmers still need to register using the online Rural Payments service to begin the process of making their claim. So far 86% of farm businesses have successfully done this. It remains the only way that farmers and their agents can register to make a claim so the remaining 14% are urged to do so.

13. We recommend that the level of privacy in Digital Support Centres for those making CAP applications should be comparable to that in a bank. (Paragraph 49)

Visits to the RPA support centres are by appointment only. This is to ensure that we can fully support our customers and to provide high standards of privacy.

14. Support to access online-only systems must be available not only in the first few months of the CAP application, but also in subsequent months and years, allowing sufficient time for planning training needs and bearing in mind the farming calendar. (Paragraph 52)

The Government, in particular Defra and the RPA, has committed to providing ongoing support where required. The Rural Payments service will capture additional information in the first year of the Basic Payment Scheme which will make future claims simpler.

The RPA already has in place a helpline with trained RPA officials. The Government is also already working with a range of trusted third parties to provide support; increase IT skills and capabilities; and provide access to higher speed broadband.

Rural broadband policy

15. The allocation of funding between urban and rural areas is greatly unbalanced. Those who live in urban areas have on average higher percentage coverage of superfast broadband, coupled with access to voucher schemes which can subsidise access. Rural areas are lagging behind. Those in poorly connected areas are sometimes asked to pay twice: once through their taxes for the Government-funded Broadband Delivery UK (BDUK) programme and potentially again from their own pockets if the BDUK programme does not reach them. (Paragraph 58)

The Government is providing funding of £780 million to support superfast broadband delivery in areas that will not otherwise gain coverage through commercial rollout. This funding is being provided by people in all parts of the UK including those who live in urban areas and who will not gain any benefit from the additional coverage. Together with local match funding, this will ensure availability of superfast broadband to 95% of UK premises, with the remainder having access to standard broadband with speeds of at least 2Mbps. For the final 5% of the UK which will not be reached under the current programme, we are exploring the costs and challenges associated with roll-out in these areas to inform future decisions.

Up to £150 million has been committed to the Super-Connected Cities Programme to support enhanced connectivity for SMEs. Under this programme, a voucher scheme is available towards the costs of connections for businesses. The purpose of this scheme is to stimulate business demand for superfast broadband take-up in those areas where the market is currently providing infrastructure capacity. Funding for rural areas therefore vastly outweighs the funding provided for the cities programme.

16. We recommend the introduction of a voucher scheme, similar to that available in cities, for those who live in areas with no access to fixed-line broadband or where they are unable to access a minimum of 2 Mbps broadband. The vouchers should subsidise the cost of satellite broadband access for those eligible. (Paragraph 59)

The Government is currently developing its plans for delivery of its commitment that all premises will have access to standard broadband with speeds of at least 2Mbps by the end of 2015. Within this, eligible premises will have access to satellite services which can provide superfast broadband speeds.

17. Fibre to the Cabinet does not offer a solution to all premises. Alternative technologies must be investigated and it is encouraging that the Government is now investing in this research. It is disappointing that research into solutions for hardest-to-reach areas has taken so long. (Paragraph 63)

The Government notes the Committee's disappointment that it has taken so long for solutions to become available for the hardest to reach areas. In June last year, following extensive market consultation and a procurement process, the eight market test pilots were announced to explore delivery solutions which could be used in these areas. The results of the feasibility reports were published on 9 February and seven of the pilot projects are now proceeding into the deployment phase.

18. The Innovation Fund is the first step to providing superfast coverage to the last 5%. The results of the pilot test must be published and the most suitable schemes rolled out nationally. (Paragraph 64)

Pilot feasibility reports and a summary document have been published and are available on GOV.UK at https://www.gov.uk/government/publications/superfast-broadband-programme-phase-3. Each of the seven schemes now moving into the deployment phase will:

·  Generate evidence about the cost and challenges of delivering superfast speeds in these hardest to reach areas.

·  Build capacity and capability in the market, and increase the market's knowledge of State aid requirements, by sharing the pilot findings as widely as possible.

·  Generate evidence about expected levels of take-up in hardest to reach areas, and how it can be incentivised.

·  Test how different technologies perform in the field, and collect feedback on customer experience of those technologies.

The Government will review and publish further evidence gathered from the pilots later this year, and will consider the economic and social case for further government action in this area.



1   https://www.gov.uk/government/publications/the-digital-communications-infrastructure-strategy Back


 
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Prepared 26 March 2015