Background brief to backbench business debate on broadband

COUNTRYSIDE ALLIANCE BACKGROUND NOTE

BROADBAND CONNECTIVITY IN THE COUNTRYSIDE

Backbench Business Debate, House of Commons, Monday 12 October 2015

Superfast broadband roll-out: "That this House notes variations in the effectiveness of roll-out of fixed and mobile superfast broadband in different parts of the UK; and calls on the Government to host a not-spot summit to consider ways to tackle this issue."

Matt Warman MP, Conservative, Boston and Skegness

Ian Liddell-Grainger, Conservative, Bridgwater and West Somerset

The Countryside Alliance welcomes this important debate by MPs Matt Warman and Ian Liddell-Grainger and supports the call for the Government to host a not-spot summit to consider ways to tackle the variations in broadband roll-out.

In the countryside broadband access is just as essential, but nowhere near as available, as it is in urban areas. Both broadband and mobile coverage are patchy and can be unreliable, making life for families and businesses very difficult. Continued poor connectivity in rural areas represents a huge missed opportunity for economic growth and these gaps and weaknesses need to be addressed as a matter of priority with the minimum of 10 Mbps to all business premises by 2018/19

We are all ambitious for a digital Britain and all the benefits it brings, but it feels to rural Britain that it is being left further behind. It is time this stopped. This is why the proposal for a not-spot summit is fully supported by the Countryside Alliance. We must all work together to ensure that everyone has superfast broadband delivered by whichever technology is most appropriate. We need a market which is fair, drives innovation and is transparent to ensure we are all able to be part of the digital revolution.

BROADBAND

• The importance of broadband to rural households and businesses cannot be overestimated, with many deeming it an essential service alongside water, electricity and gas.

• The Countryside Alliance is concerned that the lack of broadband provision in rural areas is holding back the countryside economically and socially, and limiting the growth of start-up and small and medium sized businesses. Reliable broadband is essential for competitive and successful enterprises in a growing digital economy. It is vital that rural communities and businesses have access to effective and affordable broadband if the digital divide between rural and urban areas in the UK is not to grow even wider.

• Countryside Alliance research shows that 82% of rural people believe superfast broadband is essential to 21st century life and that everyone should have access. 56% feel the Government is not doing enough to ensure it happens. Yet rolling out high-speed broadband across the whole of the UK is the technological improvement that the British public most widely believe will impact positively on the UK economy. 80% of all adults agree that the provision of high speed broadband would have a positive impact, rising to 85% amongst rural communities. This measure outscores greater investment in renewable energies, major transport projects such as HS2, Crossrail and a third runway at Heathrow.

• Limited access to broadband services also affects education in rural areas and access to online services, especially the new offering of government online services. The key Government policy to increase the use of online resources for public services, which could save at least £1billion a year, will only work if these services are accessible to all and do not exclude those in remoter areas, who already struggle to access many public services.

• For example, HMRC expect tax returns and PAYE to be completed online, so rural and farm businesses are often excluded from this service as they are unable to access and return data online due to the lack of a suitable broadband connection. The new Basic Payment Scheme, which was intended to be fully digitally administered and processed online, caused great frustration and expense to farmers without broadband provision.

• If you do not have broadband then you, as a rural business, are expected to use an agent, which is a significant additional cost. The latter point is particularly troublesome for farmers in more remote areas, who need access to the internet. A survey by the National Farmers Union on broadband access in rural areas showed that around 40% of respondents could not get broadband at all, while 90% who could access broadband did not get a reliable connection.

• The Government has promised that 95% of UK premises will have superfast broadband - more than 24Mbps - by 2017 and a roll out of 4G services to 98% of the population. This still leaves over 1.3 million homes without superfast broadband or a mobile phone signal. This is why innovative schemes, such as those outlined in the Budget (March, 2015), to provide better services to the hardest to reach areas must be delivered.

• The Countryside Alliance has frequently praised this Government's commitment to improving rural broadband coverage and the funds they have allocated for councils are very welcome. However, it is widely acknowledged that local authorities have struggled to turn Whitehall's promises into reality.

• The National Audit Office reported in January 2015 that Phase 1 of the Programme is progressing well after a slow start and this is good news for rural communities: The availability and quality of roll-out plans has improved, with 42 out of 44 local bodies published maps and postcode checkers; take-up of superfast broadband has been significantly faster than anticipated; costs for rolling-out superfast broadband to 90% of UK premises by 2016 (Phase 1) were lower than anticipated; and the delivery of Phase 2 (coverage of 95% of UK premises by December 2017) is likely to require less public funding.

• However, connectivity is also key for the final 5% who will not be connected by fixed line broadband and fall outside of the BDUK project. For this 5% the use of alternative technologies will be particularly important.

• The Countryside Alliance believes to ensure connectivity in rural areas we should not be relying on fixed line broadband, but embracing all technologies including mobile and satellite.

• The Countryside Alliance welcomed the announcement by the Government last year of eight innovative pilot projects, designed to test alternative ways of boosting superfast broadband coverage in rural areas. The £10m fund from the Department of Culture Media and Sport is a great stride forward in the drive to improve rural connectivity. The Countryside Alliance has always said that a combination of technologies, rather than fixed line broadband, would answer the question of how to provide superfast broadband to the final 5% of homes and businesses in hard to reach areas. By using a variety of means - including wireless and satellite provision - and investigating different ways to fund these projects, we hope the Government will find the key to improving broadband coverage in hard to reach areas.

• The Countryside Alliance also welcomed the publication in November 2014 of Ofcom research into 4G and 3G mobile broadband speeds. However these figures only measure the speed of smartphone broadband in five big cities across the UK. This information is vital so that consumers can make informed choices as to which operator will provide them with the best service. A transparent market will not only ensure operators are more competitive, but will hopefully ensure better coverage across the UK.The Alliance has called for Ofcom to conduct similar research in rural areas so that those who live and work in the countryside can also have access to information as to which operator will best meet their needs.

• The proposals contained in the Budget in March 2015, including boosting broadband coverage with support for satellite, ultra-fast broadband (100mbps) being accessible from nearly all homes and extension of the super connected cities voucher scheme, will provide connectivity for some households outside of the BDUK project.

• However, we are disappointed that rural enterprises are excluded from the super connected cities vouchers, in which 22 cities across the UK to apply for grants of up to £3,000 to upgrade their broadband connection. It is regrettable that this initiative does extend to rural businesses and communities, and it should also enable connectivity through alternative technology such as satellite and mobile broadband.

• Broadband connectivity must be able to meet our current demands and have the capacity to grow as we become ever more reliant on digital connectivity.

• The UK Government's current broadband policy, which aims to deliver superfast broadband (24Mbps) to 95% of premises by 2017 and 2 Mbps to the remaining 5%, is not ambitious enough to meet the demand of consumers and businesses.

• Current policy also lacks the vision to deliver 'fit-for-purpose' universal broadband services that are responsive to user needs and future-proofed in line with the best available technology.

• There needs to be a comprehensive review of broadband policy, including measures to encourage more competition for better packages in the domestic and business broadband market, a minimum of 10Mbps to all premises in the UK by 2018/19 and prioritisation of fibre-optic roll-out to business parks and enterprise zones.

• The broadband voucher scheme should be extended to include rural businesses and communities and alternative technologies.

• 12% of our GDP is generated through the Internet, which puts the UK significantly ahead of other countries.^[1]


• SMEs utilising the internet have reported more than double the total export revenue as compared to other SMEs.^[2]


• The internet is responsible for creating 2.6 jobs for every one made obsolete.^[3]


• Businesses with a strong online presence are growing more than twice as fast as those with no, or minimal, presence.^[4]


• Businesses with a high online profile had sales 6 times higher than those with little or no web presence.^[5]


• Half of rural small businesses are dissatisfied with the quality of their broadband provision (49%). The data showed nearly double the level of dissatisfaction compared to urban small businesses (28%).[6]


• This issue will become even more significant as small firms become more reliant on a high quality broadband connection to do business. More than three quarters (77%) said that email will be critical to their business in the next two years, while more than half (57%) said broadband will be critical to engaging with their customers.[7]


• The current lack of broadband infrastructure serving small firms threatens the expansion of the rural economy currently worth £400bn annually. The business opportunity includes 28% of all UK firms and over one million small businesses.[8]


• The FSB research uncovered rural businesses' dissatisfaction across a number of areas, including reliability (47% dissatisfied), upload speed (61% dissatisfied) and download speed (61% dissatisfied). This represents nearly a 50% gap in reported satisfaction levels with comparable urban businesses.[9]


• As many as 14% of UK small firms still view the lack of a reliable broadband connection as being the primary barrier to their growth.[10]


• A reliable Internet connection is viewed as a key business requirement by 94% of small UK businesses.[11]