Laura Wilkinson, Plum Consulting

1. Unlocking value with rural broadband: a policy rethink
plumconsulting.co.uk
INCA Conference 2019
16 October 2019
Laura Wilkinson

2. 10/07/2019 Plum Consulting
Digital infrastructure and digital services are essential
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• Digital sector is an essential and growing part of
modern service-based economies
• Adoption of digital services enhances productivity in
other sectors (unobserved)
• Requires access to digital infrastructure
Source: DCMS, 2018. (Current price data).
Gross Value Added by sector, UK

3. 10/07/2019 Plum Consulting
Digital access will be key for growth of UK rural economy
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• Economic contribution of UK’s rural areas is around
£300bn, or 16% of national economy.
• Rural areas account for 17% UK population and 90% UK
land mass
• Economic activities differ across rural and urban areas
• Access to digital services in rural areas can bring
significant economic and social benefits
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0 20 40 60 80 100 120 140
Agriculture, forestry and fishing
Financial and insurance activities
Mining, electricity, gas, water and waste
Recreation, other services, household activities
Information and communications
Construction
Professional and administrative services
Manufacturing
Real estate activities
Distribution, transport, accomodation and food
Public administration, education, health
GVA (£ bn)
London
Predominantly urban (excl. London)
Urban with significant rural
Predominantly rural
Rural ‘top 5 sectors’
Mix of economic activities
Data shown for England only.
Source: Statistical Digest of Rural England, Plum analysis, 2019.
See also: House of Lords, Select Committee on the Rural Economy
Report of Session 2017–19.
https://publications.parliament.uk/pa/ld201719/ldselect/ldrurecon/330/330.pdf

4. 10/07/2019 Plum Consulting
Rural areas tend to be underserved
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• Economics and investment case for digital infrastructure
and services is typically challenging in rural areas
• Often results in market failure, which then requires
regulatory intervention or public funding that aim to
provide affordable and adequate broadband services
• However, conflict in between policies and initiatives: full
fibre, high capacity, and gigabit-capable solutions
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UK rural premises’ broadband access

5. 10/07/2019 Plum Consulting
Examples of selected initiatives in UK
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Attributes and
comments
BDUK Gigabit vouchers LFFN USO Scottish R100 RGC Ofcom RAB fibre
model
Ofcom shared
spectrum
Funding Government Government Government Industry Government Government Industry Industry
Business model ISP bids User vouchers ISP bids User requests / cost
subsidies
ISP bids / cost
subsidies (TBC)
User vouchers RAB model on
Openreach
investment
ISP bids
Coverage / eligibility Sub- 24Mbps
postcodes
National National / public
sector bodies
Sub- 10Mbps
premises
Sub- 30Mbps areas in
Scotland
Sub- 30Mbps public
sector hubs
Ofcom defined areas Subject to Ofcom
approvals
End-user service Superfast / 24Mbps Ultrafast / 100Mbps Ultrafast / 1Gbps 10Mbps down /
1Mbps up
Superfast / 30Mbps Superfast / 30MBps Ultrafast / 100Mbps Technology
dependent
Technology focus FTTC, now FTTP ‘Gigabit capable’ ‘Gigabit capable’ /
FTTP
£3400 cost per line /
£45 pcm threshold
Proportion of
premises ‘gigabit
capable’
‘Gigabit capable’ FTTP Neutral
Comments Closure expected in
2022
Limited take-up in
rural areas, due cost
Public sector focus;
limited take-up in
rural areas due cost
Service level below
market needs. Many
premises over cost
threshold
Targets missed; likely
to require additional
funding
Public sector focus;
limited budget of
£200m
Contentious, under
development
Case by case.
Potential for higher
power licences
Source: Ofcom Connected Nations, FTIR.

6. 10/07/2019 Plum Consulting
Complexity drives inefficiency and confusion
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• Market gap: Expectations of an adequate and affordable service have evolved beyond USO.
• Timing gap: comprehensive rollout of 5G and fibre networks will take several years, end-users need adequate
broadband solutions in the interim
• Cost gap: fibre and 5G solutions may not be most cost efficient solutions for rural areas
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7. 10/07/2019 Plum Consulting
Starting point for shaping future policy
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• Less fragmented approach to support rollout of broadband infrastructure
• A flexible and holistic framework needs to:
• Set clear objectives
• Recognise different regional and market requirements
• Demand driven
• Consider range of technologies
• Remove uncertainty
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8. 10/07/2019 Plum Consulting
Download our Insight to find out more
8
Unlocking value with rural broadband: a policy rethink. Plum
Insight, September 2019
https://plumconsulting.co.uk/unlocking-value-with-rural-
broadband/
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