Digital Britain final report; 2Mbps universal broadband by 2012, fixed line ‘tax’ to fund rural next-gen broadband

17 Jun 2009

Lord Stephen Carter, the UK’s communication minister, has released the final version of his Digital Britain report, which details proposals for improving and expanding the nation’s digital infrastructure. Echoing the previous indications in the interim report, which was published in January 2009, one of the main proposals is for the universal provision of broadband services at speeds of 2Mbps, which is expected to be delivered through a combination of fixed and mobile technologies. Approximately 15% of British homes are not currently able to receive 2Mbps services, and the government will release approximately GBP200 million (USD328 million) from unused funds previously set aside to assist elderly people with the switch from analogue to digital TV. To manage the process a Network Design and Procurement Group will be created, and will be responsible for structuring and running the procurement process, overseeing delivery, ensuring active stakeholder engagement, and accountability for the value for money use of the direct public contribution to the Universal Service Commitment.

In addition to this, the report has also considered the introduction of superfast broadband services, and to that end a GBP0.50 (USD0.82) per month levy will be made on every fixed line voice and/or broadband connection to help fund the rollout of fibre-based services in rural regions. This extra charge will be paid in to a Next Generation Fund (NGF), which will be managed by regulator Ofcom, and it is estimated that the ‘tax’ will raise between GBP150 million and GBP175 million per year. The report estimates that while approximately 60%-70% of the country will gain access to superfast services under plans by BT and Virgin Media to build nationwide fibre networks, the NGF will help fund rollouts in areas not seen as commercially viable by the operators. The Final Third Project expects to deliver at least 90% population coverage of next generation broadband services by 2017.

One area that remains unresolved however relates to the dispute relating to proposals that could see mobile operators Vodafone and O2 give up approximately 15% of their respective 2G spectrum allocations. No decision has been made on how spectrum is to be shared among the cellcos, although it was noted that Ofcom may be directed to impose a solution in September this year, if the operators are unable to reach an agreement themselves.

In relation to other mobile sector issues, the report called for the immediate release of spectrum in the 2.6GHz band for auction, as well as the alignment of the 2.6GHz and 800MHz auctions at the earliest date, expected to be mid-2010. Additionally, existing mobile operator’s 3G licences are to be made indefinite, rather than expire in 2021 as currently expected, although this will be in return for proper administered incentive pricing (AIP) from the end of the original licensing period. The review expects this to encourage significant investment in the UK’s 3G networks.

United Kingdom, Ofcom