Comparing UK and US Broadband Incentives —
Bottom line, we need better broadband. The world increasingly depends on connectivity in daily life, in emergency response, access to education, agriculture and communication, to name a few. We choose where we live and work based on connectivity, so why is it so hard to get everyone on the broadband grid?
The simplest answer is that better infrastructure is necessary to provide ubiquitous access, and infrastructure costs a lot to build, especially if we want to reach the most rural parts of each state. Luckily, politicians are progressively advocating for more broadband expansion programs at the state and federal level.
On a recent trip to London, we took stock of the differences between how the United Kingdom and the United States each approach improving connectivity. We noted what funding is available, how providers qualify, what policy goals are in place, and any plans to future-proof new infrastructure.
While both the US and UK governments are supporting fiber build-outs with broadband incentives, the 2 are going about it very differently. The UK recently launched a nationwide Gigabit Broadband Voucher Scheme (GBVS), which is funded by a pot of £67m. The program is managed by Broadband Delivery UK (BDUK) and will provide vouchers worth up to £3,000 to SME businesses or £500 to residents to help with the costs of connecting to “full fiber” (FTTX) broadband. The funds flow directly to the consumer, who then uses the money (vouchers) to get connected. This puts the path to build into the hands of the consumer, and effectively “pulling” network build-out rather than “pushing” it.
The UK’s approach is far different than that of the Connect America Fund (CAF) in the US. First introduced in 2014, the CAF set aside billions of dollars to subsidize the expansion of broadband, primarily in rural and underserved areas. In the first round, the bulk of the funding went to large incumbent providers with a long-term window to deliver just 10/1 speeds. Some argue this approach has led to only incremental improvements, with little benefit to those in rural areas with the greatest need. In fact, the FCC estimates that, as of early 2018, nearly 31% of the 43.6 million Americans in rural areas still do not have access to home Internet service with speeds of at least 25Mbps down and 3Mbps up. New incentive programs are rolling in to close this coverage “gap,” including CAF2, ACAM, ReConnect, and many state level broadband funds.
Bandwidth and Broadband Incentives: How Fast Is “High Speed”?
The goal of broadband incentives in the UK and the US is to target areas unserved by broadband or underserved by existing networks. Broadband providers must meet minimum speed thresholds in order to receive grant funding, but not everyone has the same definition of high-speed Internet access. The UK government defines super-fast broadband as download speeds of 24Mbps. The US’ FCC programs require a minimum of 25Mbps. However, historical US programs required download speeds of only 10Mbps as recently as 2015, and upload minimums remain as low as 3Mbps for a 25/3 broadband definition.
In 2018, M-Lab released a report ranking 200 countries for their average nationwide broadband speed. On this list, the UK ranked 25th and the US ranked 20th. Romania has approximately the same land area as the UK and managed to rank 5th with an average download speed of 38.6Mbps, more than double the UK’s download average of 18.6Mbps. Despite the considerable funding efforts on the part of both governments, the UK and the US’ rankings seem to be holding steady.
It’s worth noting that the fiber network providers we work with are typically delivering speed options of 100/100 or higher, which is decidedly more in line with the currently skyrocketing need for bandwidth. Some markets are even beginning to adopt symmetrical gigabit (1,000/1,000) as the norm.
Progress Toward Policy Goals
As the demand for high speed broadband increases, so does the political value. There’s deep support for broadband investment across the political spectrum in the United States. In early 2019, the Trump Administration released the American Broadband Initiative (ABI) Milestones Report, an interagency strategy earmarking $600 million in loans and grants to stimulate increased private investment in broadband infrastructure and services to fill connectivity gaps. The ABI report outlines a 3-pronged plan of attack:
1. Streamline Federal permitting processes to make it easier for network builders and service providers to access Federal assets and rights-of-way, reducing the regulatory burden, and expediting the deployment of broadband networks.
2. Leverage Federal assets such as towers, buildings, and land, to lower the cost of broadband buildouts and encourage private entities to expand telecommunications infrastructure, especially in rural America.
3. Maximize the impact of Federal funding to better target areas of need, improve consistency, and provide incentives for State/local policies that efficiently and effectively leverage Federal dollars.
Last year, the UK announced a goal to put all households in reach of fiber to the premises (FTTP) by 2033. In response, the Future Telecoms Infrastructure Review indicated that an additional £3BN to £5BN would be required to reach the approximate 10% of rural areas that would otherwise be overlooked within that timeline.
However, during his Conservative leadership acceptance speech, Boris Johnson, the UK’s new Prime Minister, announced that “fantastic full fiber broadband” would be “sprouting from every household” by 2025, much earlier than the existing 2033 timeline. Accomplishing this goal would cost an estimated £30BN, which the UK government has not yet committed to funding.
How do these 2 countries plan to conquer the digital divide and mend the connectivity gap? The good news is that fiber is a flexible technology that can withstand continual upgrades to electronics and increases in speed requirements. A well-designed FTTP deployment does essentially future-proof baseline network investments for decades to come.
Some broadband advocates suggest adopting a higher (and symmetrical) speed threshold for funding availability, raising the definition standards for high-speed Internet. Others believe infrastructure (ducts and poles) should be shared and openly accessible to network builders. The UK has been experimenting with this strategy under Ofcom rules since late last year. Openreach, which maintains the UK’s main broadband network, is required to let competing providers use its telegraph poles and underground ducts to lay their own fiber cables.
While a perfect solution has yet to be discovered, it’s incredibly encouraging to see growing buy-in across the board. The next few years promise exponential infrastructure growth; unlikely partnership models between providers, operators and network owners; and a shrinking divide as we “mind the gap” in connectivity.