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Written evidence submitted by London First

Response to DCMS’s Broadband and Road to 5G Consultation

19 June 2020

This submission mainly focuses on the following questions:

• How realistic is the Government’s ambition of nationwide gigabit-capable broadband by 2025, and what measures (regulatory, financial, technical, other) will be needed to achieve it?
• What are the challenges to the roll-out of 5G and gigabit-capable networks? To what extent do existing legislative, regulatory, and spending plans address them?

Overview: The importance of gigabit-capable connectivity for London

1. London First is a business campaigning group with a mission to make London the best city in the world to do business. We convene and mobilise business leaders to tackle the key challenges facing our Capital. We are made up of over 200 leading employers across a wide range of sectors, overseen by a non-executive board of influential business leaders.

2. The onset of the coronavirus pandemic and the imposed lockdown in March reiterated the importance of London having a digital network which can respond to the rising demand for home working, online lessons, and TV streaming. And while there were some initial fears that the transition to homeworking would pose a serious challenge to the UK’s digital network, which is mostly comprised of fibre to the cabinet (FTTC), analysis from Ofcom has revealed that average UK broadband speeds largely held up during the lockdown, despite some providers reporting an increase in weekday daytime traffic of between 35 and 60% after the coronavirus restrictions came in[1].

3. However, growing demands on the network mean investment in future-proofing digital infrastructure to allow for gigabit-capable connectivity is urgently needed. Replacing FTTC with fibre to the premises (FTTP) is seen as the “gold standard” for creating a more future-proof reliable and resilient digital network which can support moves towards London becoming a smart city, as indicated in the Mayor of London’s Smarter London Together initiative. An essential component of creating a smart city is Internet of Things (IoT) technology, which will put additional demands on existing digital infrastructure. According to research by management consulting firm Bain, the IoT market is set to grow to around £397bn in 2021, more than double the £179bn that was spent in 2017, with many London start-ups[2] hoping to benefit from this increased investment[3]. And a leading connectivity provider has insisted that there will be a need to transition from 4G to 5G otherwise the potential for London to become a smart city will not be fully realised[4].

4. Having appointed Theo Blackwell in September 2017 as London’s first Chief Digital Officer, the Mayor has recognised that accelerating full fibre and 5G can make London a safer, cleaner, and more liveable city by enhancing the design and performance of London’s future buildings, spaces, and streets.

5. Latest figures suggest that London’s full fibre coverage has recently grown substantially, but it still only stands at just over 16%[5]. This compares very unfavourably to coverage in international counterparts – some Asian cities, for example, have nearly 100% full fibre coverage[6]. While full fibre is not the only way of delivering gigabit-capable connectivity, this dramatic discrepancy illustrates that London – as well as the UK more broadly – needs to ensure a regulatory framework is in place to promote the rapid deployment of full fibre and 5G.

6. While the full impact of Covid-19 is unlikely to be known for some time, it will be harder for the Government to maintain its target of achieving 100% gigabit-capable connectivity across the UK when many operators have switched their focus to critical repairs and maintenance, rather than new fibre roll-out or consumer installations[7].

7. To support industry’s efforts to build a future-proofed network, central government will need to put forward a wider package of legislative and regulatory reforms to support efforts to deliver full fibre and 5G at scale across the UK. Operators have confirmed that they will only be able to meet the Government’s ambitious 2025 target if the right public policy and regulatory decisions are made quickly, which go beyond what has already been promised.

London-specific challenges to rollout of full fibre and 5G

8. London has some specific issues relating to the rollout of gigabit-capable technologies such as full fibre and 5G. These include challenges relating to London’s local governance structures. The thirty-two boroughs and the City of London grant the planning permissions and prior approvals that relate to digital roll-out, but each can take a different approach to applying rules and permits. This is also the case for street works and parking charges, and as a result the cost to operators varies considerably across London.

9. Securing wayleave agreements between a landlord and a telecommunications company is often cited by operators as a significant barrier to rolling out full fibre and 5G, and this is made especially difficult in an international city like London with many people living in high-rise tower blocks and buildings owned by people across the world. While progress has been made – for example, in July 2016 the City of London Corporation agreed a standardised ‘wayleave toolkit’ – problems still persist. Even in the City of London, Openreach are still unable to connect some freeholders because of a failure to secure a wayleave agreement[8].

Measures taken by Central Government to improve digital connectivity will be helpful, but are not sufficient

10. There have been a number of helpful measures taken by Central Government to improve the rollout of digital infrastructure across the capital. This includes the Department for Digital, Culture, Media, and Sport’s (DCMS’s) creation of the Barrier Busting Taskforce, which is working with local authorities on reducing the cost of street works, liberalising planning, simplifying wayleave agreements and tackling other barriers to rollout.

11. Other more recent measures include the introduction of the Telecommunications Infrastructure (Leasehold Property) Bill 2019-20, which is currently being debated in the House of Lords. While the introduction of this Bill is welcome, network operators stress that there are still gaps in the legislation which will hamper the roll out of full fibre and 5G, particularly for people living in apartments and flats. For example, while the Bill does address the issue of landlords not responding to a wayleave request, there are concerns that the provisions will not address problems arising from landlords that respond in writing but do not negotiate the terms of access to their property in good faith.

12. Central Government also announced in March 2020 legislation which would effectively make it mandatory for property developers to ensure that almost every new home is built with support for gigabit-speed broadband connections[9]. However, according to the Government’s own figures, 81.4% of new homes already had full fibre access built in at the design stage in 2019[10], meaning that mandating full fibre for new builds would only have delivered full fibre to just over an additional 32,000 homes in 2019[11]. This legislation will therefore only have a marginal impact in speeding up full fibre rollout. 

The Greater London Authority is helping local authorities promote digital connectivity

13. The Greater London Authority’s (GLA’s) Connected London Team is successfully engaging with local authorities to promote digital connectivity. One of the most important areas of collaboration has been the GLA’s recent promotion of a standardised wayleave for mobile[12], which has subsequently been used by many local authorities in the capital to speed up access to properties and, incidentally, in other areas of the country such as the West Midlands and Glasgow. Some of the GLA’s other measures – including the London Development Database Automation Project[13] and a connectivity mapping tool – are also critical tools in helping London’s boroughs facilitate better digital connectivity.

Best practice in promoting digital connectivity needs to be spread across London’s boroughs

14. There is already evidence that many of London’s local authorities are successfully innovating in encouraging rollout of digital connectivity. London First’s report Enhancing Digital Connectivity: The role of operators and local authorities highlighted case studies of best practice from the City of London Corporation, Southwark Council, Hackney Council and Kensington and Chelsea Council[14].

15. These London boroughs, and many others, have already shown strong leadership in improving the roll-out of digital infrastructure, adopting a joined-up approach to the digital planning process, nominating digital champions and developing local digital strategies which take into account local economic development, digital connectivity, sustainability, and social-inclusion considerations. Other examples of good practice include speeding up access through promoting standardised wayleaves and providing information on ownership, as well as utilising public assets to improve local connectivity. These kinds of best practice should, where appropriate, be spread across London’s boroughs.

16. However, there are huge discrepancies between the digital progress made by different local authorities in London, with Tech London Advocates in December 2019 highlighting through a Freedom of Information request that only three of the capital’s 33 local authorities had staff in place to enable the launch of 5G, while only two had adopted a 5G strategy[15]. Their research also found that only six boroughs had given responsibilities to councillors for overseeing 5G or broadband and only the City of London could confirm when it anticipated having full 5G coverage in place, which was unlikely to happen in the next three years.

Public sector funding for areas that are not commercially viable in London

17. It is important to make use of public assets for the deployment of digital infrastructure and to provide public funding for areas where it would not otherwise be commercially viable to provide gigabit-capable connectivity. London First welcomes initiatives such as central Government’s £8.5m investment into London’s digital infrastructure through the Local Full Fibre Networks Challenge Fund (LLFN) and City Hall’s announced £10m investment to help upgrade copper cables to full fibre optics using the Tube network and public buildings, which will make it possible for more of London to access gigabit-speed connectivity[16].

Reform of business rates regime is required

18. Private sector investment is expected to deliver full fibre to 90% of UK premises[17]. To encourage faster deployment of investment in full fibre networks, the Government could use the business rates regime to incentivise investment in new fibre, with the Confederation of British Industry (CBI) calling for a review of the business rates system[18]. Many operators believe that the current business rates system is a disincentive to investing in rolling out full fibre, and the Government should go at least as far as what has been implemented in Scotland, which has introduced non-domestic rates relief for new fibre broadband infrastructure in Scotland for 10-years from 1 April 2019[19].

London First is working with the private and public sectors to enhance digital connectivity across the capital

19. London First is working with London Councils to set up a Gigabit Connectivity Forum for London, which will be an important forum for operators and local authorities (including new personnel in the sub-regional Connected London teams) to collaborate and promote solutions to some of the remaining issues in promoting digital connectivity. The Connected London Team interacts with local authorities and operators separately, so this network would supplement the GLA’s existing work with the public and private sector. It would act as a forum in which to exchange views and promote best practice across London to spread enhanced digital connectivity. We would encourage representatives from DCMS to participate in this group.

20. Operators and the private sector more broadly have a role in conveying the benefits of enhanced digital connectivity to local authorities. These include the improvements to economic growth, direct benefits to local authorities, improvements to public services and helping to facilitate smart city innovations. London First this year will be working with our private sector partners to release a report outlining the economic and social benefits arising from the deployment of full fibre and 5G technologies across London.