Fibre Broadband and the Utility Question, by FullFibre CSO James Warner

Thu, 15/12/2022 - 09:22
James Warner

As 2023 rapidly approaches, it’s fair to say that the internet is no longer something people can live without, broadband has become a necessity. The fibre industry has intrinsic long-term value, so why doesn’t broadband have utility status?

What is a utility?

A utility is defined as a service that demands a physical network and provides a fundamental addition to both domestic and economic life. Both of these tenets are defining features of fibre broadband. Furthermore, as a utility service it would be supplied by private or public bodies, with an obligation to reach everyone at a fair price and meet public quality standards. Now, with a recession lingering, quality internet is needed more than ever to enable better and fairer access to continued education and remote working, as well as to help cut the time and cost of commuting.

No longer a luxury

FullFibre is part of an industry that has an intrinsic long-term value which, in my opinion, rather enhances its current categorisation from a luxury item to more of a necessity. Modern society increasingly relies on access to the internet, and we are starting to see impacts on social mobility and quality of life. There is a widening gap between those areas with better broadband and those being left behind.

If broadband becomes a utility service, the focus would shift even further towards reaching as many areas as possible as quickly as possible, which is extremely beneficial to areas of the UK previously overlooked due to quicker returns being achieved in more dense urban settings. These less dense semi-rural areas are where we are targeting our builds – the overlooked towns and hard-to-reach rural villages identified as low priority by the bigger providers.

However, there is concern that utility status would hinder investment without some sort of regulation. In turn this lack of investment risks parts of the UK being left behind without a FTTP upgrade, and subsequently separated from the world’s modern economy.

But should fibre broadband receive similar regulations as, say, electricity? Both have important implications across the economy, and both started off as a luxury.

To regulate or not to regulate?

For broadband to reach everyone, the infrastructure needs to reach higher levels of productivity with continued innovation, rather than succumbing to cost increases, slow improvements and poor efficiency.

Regulation of the sector could be very beneficial if done well, but there is also concern that it could impact the market negatively by creating unnecessary bureaucracy and limiting competition.  Limited competition will mean the replacement of alternative networks with large monopolies, as we have seen within the electricity industry. With so many altnets now, this would be a real shame: healthy competition between larger networks and alternative networks is helping to keep the industry moving forward - expanding, innovating and building at pace.

In contrast, there are examples of irrational decision-making, with new entrants making investment decisions into locations as the fourth, or event fifth, provider to build services. Even the most adventurous investors and management teams would concede this is not a sustainable path.

Do we have the answers?

To summarise, it isn’t a clear cut answer and there are both opportunities and risk to being classed as a utility. However, one thing is for sure, as the digital world flourishes, the UK’s broadband industry must focus on infrastructure that enacts the right digital environment to remain influential.

In this way, perhaps fibre broadband should have its own lane, or what could be a hybrid approach: a regulated service that meets the demand of the changing digital economy. Looking forward, there is clearly work to be done within the broadband industry with or without utility status.

As an alternative network provider, we recognise the challenges that lay ahead, but navigating them in order to maintain build momentum and connect users in these underserved areas in the UK, remains our top priority.