'Innovative financial and commercial models' could be used to deliver ultrafast broadband, says UK government

Out-Law News | 24 Mar 2015 | 4:27 pm | 2 min. read

"Innovative financial and commercial models" could be used to encourage investment in telecoms infrastructure and help deliver 'ultrafast' broadband services to businesses and communities in the UK, the government has said.

In his Budget announcement last week chancellor George Osborne outlined "a new national ambition to bring ultrafast broadband of at least 100 megabits per second to nearly all homes in the country".

In a new digital communications infrastructure strategy published alongside the Budget papers, the government said that as part of its ultrafast broadband ambitions it expects to see "higher capacity gigabit services being made available on demand to businesses on standardised terms".

The government has still to elaborate on what it means by its 'nearly all' target for ultrafast broadband, but it said in its report that "an essential element" of its ambitions is to ensure rural communities can "enjoy the benefits of faster broadband in the same way as their urban counterparts".

The government has also still to provide details about the timescale for its ultrafast broadband ambitions and how the initiative will be funded. However, it said it could turn to new funding models to encourage industry investment.

"We are taking action in a number of areas which will support the rollout of better broadband, including inviting industry to highlight particular barriers to private investment in new ultrafast infrastructure," the government said. "The government will explore with providers of both the networks and the finance how these might be overcome, perhaps through innovative financial and commercial models."

The government has not specified what technologies should be used to deliver ultrafast broadband in pursuit of its target. In its report it acknowledged that "the technology to deliver ultrafast is still evolving", and highlighted developments with regards to both fixed and mobile broadband services.

It said it wanted to learn from recent field testing undertaken by some internet service providers (ISPs) about the performance of the "new technologies" being trialed. The testing has included "using fibre, copper and wireless infrastructure to deliver ultrafast performance to consumers and standardised gigabit services to small businesses", according to the report.

BT and Virgin have been trialing the use of separate new technologies which could deliver broadband speeds up to five and 10 times faster than the government's 100 megabits per second target respectively, according to the report. A number of smaller providers are also growing into the ultrafast market, and have been helped to do so by agreeing partnership deals with larger providers, such as Sky and TalkTalk, the report said.  KCOM is also "rolling out ultrafast services".

IT and telecoms contract expert Simon Colvin of Pinsent Masons, the law firm behind Out-Law.com, said that it is positive that the government is embracing "an innovative approach" to delivering widespread accessibility to ultrafast broadband.

"The government is open to the idea that the deployment of a range of different technologies will be necessary to support is aims for ultrafast broadband coverage," Colvin said. "This flexible approach is to be welcomed as it recognises for example that advanced '4G+' mobile broadband services are on the horizon and will be capable of delivering ultrafast broadband to consumer and business users in addition, or as an alternative, to ever-improving fixed line broadband services."

"The government will need to work closely with Ofcom as it will be the regulator that auctions off spectrum to mobile broadband providers for use in delivering new 4G+ services when the technology arrives," Colvin said. "Ultrafast broadband via mobile and satellite might be a more realistic prospect for some areas of the country where the business case for deploying new fixed line infrastructure is harder to make."

In its report, the government also said that it would "raise the Universal Service Obligation (USO)" to ensure that all UK consumers have a legal entitlement to access at least a 5 Mbps broadband service at "an affordable price". It said the commitment "goes further than any other country in Europe".

Ofcom announced earlier this month that it has launched an "overarching review of the UK’s digital communications" in a move aimed at future-proofing investment and competition in the market.