1Introduction
1.Aiming for ‘world-class connectivity throughout the UK’ could lead in two different directions. One would be towards very fast downloads and uploads of data for the average household. The other would be towards a society where all have a relatively high and cost-effective capacity to participate digitally. The first might include very high bandwidth applications accessed simultaneously by all family members in favoured areas, but not in urban and rural “not-spots”; the second might allow everyone or almost everyone to stay in touch with friends and family via email or video, use online shopping and banking services, do flexible remote working, contact their GP surgery, and have continuous access to news, culture and learning.
2.We favour the second option. At present, a sizeable number of people and businesses lack access to good, reliable and affordable broadband communications; and without that they are at risk of being digitally excluded and left behind. The provision of reliable, sufficiently-fast and accessible broadband and mobile services is fast becoming a necessity. Broadband is increasingly seen as an essential public utility; indeed, as the former Prime Minister suggested last Autumn, a basic right.
3.Compared to other countries the UK’s digital economy has been extremely successful; the sector now contributes about 10% to GDP, almost double that of the USA.1 Yet over the last few years a key concern has been a growing digital divide between those who have good access to communication services and those who do not. The effect on those in rural areas has been much discussed, but it is startling that access to decent broadband remains a major problem for many small businesses especially in business parks, for homes on new estates across the country and also in city centres, including the heart of London. Affordability and accessibility particularly affect low-income households and those living in areas of relative deprivation; over time these sections of society may be further marginalised.
4.At the start of this Parliament, the Government’s superfast broadband programme—after a stuttering start—got on track to extend superfast coverage, with the goal of giving people and businesses access to speeds in excess of 24 Mbps, to 90% of premises in the country by May 2016. The Government was also working to ensure that superfast broadband would be available to 95% of UK premises by the end of 2017. There remains, however, the difficult question of what will happen to those premises in the “final 5%”, located in the harder-to-reach rural areas and parts of towns and cities with poor connectivity.2 Problems of access to adequate broadband are frequently made worse by poor mobile availability and lack of services for those travelling by road and rail.
5.With increasing awareness of the importance of broadband, public anger has escalated at the lack of access and poor quality of service. Over the last few years there have been many debates on these issues in the House of Commons, and Members have expressed marked concern that many individuals, households and businesses may never have acceptable access to broadband and mobile services, to the great detriment of themselves, their businesses and their local communities.
6.A key function of the Department for Culture, Media and Sport is to manage the delivery of the superfast broadband programme and improve digital connectivity. In March 2015, the Coalition Government published a Digital Communications Infrastructure Strategy setting out the infrastructure they believed the United Kingdom needed to support a world-leading digital economy over the next 10 to 15 years.3 The challenge now is extending broadband coverage to all. In that context, this Committee launched an inquiry into the coverage, delivery and performance of superfast broadband in the UK, and into progress being made in extending and improving mobile coverage and services. Clearly BT is a significant player in UK communications, as the custodian of the national infrastructure since its privatisation over 30 years ago, but it is by no means the only significant player in these markets. A key question is how to stimulate increased investment from BT and others into the UK’s communications infrastructure.
7.This inquiry is running alongside Ofcom’s strategic review of digital communications, which is a comprehensive investigation into the communication markets which takes place every 10 years. The last review recommended the functional separation of BT’s access network within BT Group and saw the creation of Openreach in 2005. Openreach oversees the “last mile” of the UK telecoms access network—the copper wires and the fibre that connect homes and businesses to local telephone exchanges. There is now a live debate as to whether and how far this model of access-based competition based on functional separation of Openreach has been successful.
8.We decided to focus on six inter-linked issues: the position of Openreach, given its critical importance to UK communications; the work taking place to increase superfast broadband and mobile availability; the position of the remaining homes and businesses with poor or no connectivity; the Government’s proposal for a new Universal Service Obligation for broadband; future-proofing broadband infrastructure through investment in fibre; and concern over quality of service. This report is designed to contribute to the debate around Ofcom’s final deliberations in its review.
9.We are grateful to have received views from a wide range of people and organisations which have greatly assisted our inquiry. There were over 100 written submissions from telecoms organisations and industry groups, local councils, consumer bodies, and individuals. We held 11 evidence sessions, one of which took place in the Chilterns. We spent the morning there visiting businesses and other locals which helped us appreciate first-hand how poor connectivity can unfairly affect rural communities. In the afternoon we took formal evidence in Russell’s Water, South Oxfordshire. We are very grateful to all the witnesses who gave evidence for their time and advice. In order to bring real technical and financial expertise to bear on these issues, the Committee brought in Professor Jim Norton, Tony Lavender, Professor Tim Jenkinson, and Dr Helen Weeds.4 Their guidance and advice has been invaluable, and we include their paper as an annex to our report.5 We give them particular thanks.
1 The Business, Innovation and Skills Committee has been conducting an inquiry alongside ours into the Digital Economy, specifically focusing on Government actions affecting businesses in the digital sector.
2 The remaining 5% (approximately 1.5 million of premises) is dispersed across 70% of the UK’s landmass with approximately 1% being in urban areas.
3 https://www.gov.uk/government/publications/the-digital-communications-infrastructure-strategy/the-digital-communications-infrastructure-strategy
4 The Committee appointed Professor Jim Norton, Visiting Professor, University of Sheffield, as a specialist adviser at its meeting on 14 October 2015; and also Tony Lavender, Professor Tim Jenkinson, Saïd Business School, University of Oxford, and Dr Helen Weeds, University of Essex and Multimedia Economics Ltd on 22 March 2016. The advisers’ relevant interests that were declared at these meetings appear in Annex B of the Committee’s Formal Minutes for Session 2015–16, which are available on the Committee’s website.
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© Parliamentary copyright 2015
18 July 2016