Labour Party Pledge to Protect £5bn UK Gigabit Broadband Project

Chris Bryant, the UK Labour Party’s Shadow Minister for the Creative Industries & Digital, has perhaps unsurprisingly indicated that – should the party be elected at the next General Election – they would honour the Government’s existing £5bn Project Gigabit broadband roll-out programme. But some market intervention may occur.

The project aims to extend networks capable of delivering download speeds of at least 1000Mbps (1Gbps) and uploads of at least 200Mbps to 85% or more of UK premises by the end of 2025, before rising to “nationwide” coverage (c.99%) by around 2030 (here). Most of this network coverage is actually coming from competitive commercial builds, while Project Gigabit is more focused on the final 15-20% of commercially unviable premises.

However, Project Gigabit is now a couple of years into its programme and has so far only awarded subsidy contracts for some of its major procurements, with many more expected to follow in 2024. At this rate it might take until 2025 before we even reach this stage in Wales, Scotland and Northern Ireland. Suffice to say, it could be moving a bit faster.

One other potential risk for the project has been the looming General Election, since any changing of the guard has a tendency to result in delays as existing programmes may face review. In that respect the opposition Labour Party are currently still polling well ahead of the Government, thus their perspective and approach to this area of policy is particularly relevant.

The latest news is that Labour’s Chris Bryant, while being admittedly sceptical of Project Gigabit’s performance (i.e. slowness in awarding contracts and delays in the voucher scheme), has indicated via Telco Titans that he would seek to honour Project Gigabit’s plans and existing budget – “We’re conscious that £5bn was set aside for it, and that policy hasn’t changed,” said the MP.

The Minister also said he “100%” supports competition in the field of fibre infrastructure, which confirms a move away from the somewhat divisive and nationalisation focused “free full-fibre broadband to all by 2030” pledge of 2019 (here). But there was also some talk about working with Ofcom to impose a degree of standardisation and order in the market, particularly around the issue of whether or not overbuild between networks is the only way to ensure good competition (Bryant thinks Ofcom “could do a bit more in this space around cooperation”).

Chris Bryant said:

“You don’t want government interfering too much. On the whole, competition is good for growing and enabling innovation and development, but just sometimes you do have to step into the market and say ‘actually, this could help everybody’.”

Naturally it can be difficult to read between the lines of what politicians mean, particularly while Labour admits that its own broadband policy for the next general election is still somewhat of a “work in progress“. But we suspect that what Bryant may be talking about is encouraging more infrastructure sharing and / or co-operative build, which is an area that would have to be worded very carefully to avoid causing unintended damage to competition.

A word on infrastructure sharing

A fair bit of infrastructure sharing does already take place today, most notably via Openreach’s existing cable ducts and poles (regulated), as well as through some separate commercial agreements between operators and utility firms (fibre via the sewers and electricity poles etc.). But this isn’t viable in every location and there are a lot of sensitives and safety considerations involved, depending upon precisely what you’re looking at doing and where.

Ofcom has previously investigated the possibility of deploying full fibre networks across combinations of different non-telecoms infrastructure, but the regulator found that the duplication of engineering efforts and maintenance costs could be unattractive.

As for the idea of getting network operators to work together co-operatively on builds, it’s sometimes akin to herding cats – due to the difficulty of balancing competitive interests between so many rivals in the same space (doesn’t work well without regulation, but making the regulation fair is tricky). On top of that, there can be technical differences between networks and operators tend to consider detailed knowledge of their existing or future infrastructure to be commercially sensitive (confidential).

Not to mention the issue of whether such sharing would actually produce the sort of national benefits desired, particularly since it could take a few years to realise (in terms of legislation/regulation changes) and by then much of the roll-out will have already been completed. Despite all of this, the potential advantages, such as from reducing street works, build costs and improving coverage at a more rapid pace, cannot be ignored.

On the other hand, much of this has been explored before (here), albeit without much change (here). The last consultation on updating the Access to Infrastructure (ATI) Regulations 2016 to support more infrastructure sharing saw some broadband operators raising concerns about the risk of “unintended consequences”, such as if changes to the ATI ended up undermining the investment cases in new networks.

Likewise, some alternative networks expressed “limited interest in using non-Openreach or non-telecoms infrastructure,” due to a general preference for telecoms infrastructure, as well as the “availability of a more stringent regulated product on a near ubiquitous nationwide network.” Suffice to say, Labour may find this one to be as difficult to navigate as the Government has already experienced.

Further thoughts

One other question that arises is whether or not Labour will take any action with respect to telecoms poles. Some of the party’s MPs have been strong supporters of those who would rather see new cables being put underground than overhead via poles, despite the negative impact that could have on network coverage and build costs. But once again, this could be why Bryant is hinting at a more co-operative approach to build.

At present the only broadband related policy that the current Labour Party has actually set out in any detail relates to social tariffs and mid-contract price rises, which is something they unveiled last year. The original press release seems to have vanished from their website (it used to be here), but this is what they promised in October 2022.

Labour is calling for:

1) A reversal of changes the government made in 2019 which allowed regulated wholesale prices to rise with CPI rather than costs, so that telecoms wholesalers and internet service providers don’t get a windfall from sky high inflation whilst families and firms struggle to pay their bills.

2) Ofcom to investigate and take action to strengthen consumer protections including taking action on mid contract price rises, early termination costs for social tariff customers, and loyalty penalties where long term customers pay more than new customers.

3) An industry wide social tariff for low-income families. Industry including wholesalers like Openreach, must work with Ofcom and consumer groups to develop a mandatory well-advertised broadband social tariff for low-income families, or the Party will set and legislate for one in government.

We’ve already covered those proposals before in more detail (here), although it’s worth noting that there are now a lot of cheap social broadband tariffs available (here) and Ofcom are about to conclude a key review into the issue of mid-c0ntract price hikes (here) – hopefully the latter will deliver some serious change.

At the end of the day we’ll have to wait for the Manifestos at the next General Election before being able to see what Labour, as well as the other parties, may be planning to offer. We’d only ask any readers who may choose to comment below to kindly avoid the usual level of toxic and abusive political commentary that sadly sometimes flows from such debates.