Hammond to Pledge Broadband Cash in U.K. Productivity Boost

Hammond to Pledge Broadband Cash in U.K. Productivity Boost

Chancellor of the Exchequer Philip Hammond will announce a plan to invest 1 billion pounds to improve Britain’s broadband infrastructure, part of a program aimed at boosting productivity as the U.K. leaves the European Union, according to Bloomberg. The plan, under which 2 million more households could get access to full-fiber broadband, will be confirmed in Autumn Statement, the Treasury said in an e-mailed statement. The government will contribute 400 million pounds to a new Digital Infrastructure Investment Fund, to be matched by emerging fiber-broadband providers wanting to scale up.

Hammond’s first fiscal event since his appointment in July will set out a new framework after he abandoned his predecessor George Osborne’s plan to balance the books by 2020, as well as targeted investment projects as he seeks to ready the economy for the fallout from Brexit negotiations. He has already warned the economy may face "sharp challenges" ahead.

Britain’s communications network is the subject of fierce debate, given its importance to the digital economy post-Brexit and the ongoing review of Openreach, the national fiber-optic network operated by former telecom monopoly BT. Because of the expense of installing full fiber connections, BT runs mostly copper wires into homes, and is trying to squeeze more speed out of the existing copper.

Currently, only 2 percent of the U.K.’s homes and businesses have access to the full-fiber broadband, much lower than the EU average of about 20 percent. The matching funds will help companies like Sky and TalkTalk Telecom that compete with BT but rely on Openreach to offer broadband service to their customers. Sky and TalkTalk said in separate statements that they welcome the initiative, though Sky added that it didn’t go far enough.

In addition to the matching fund for emerging broadband providers, Hammond will announce a plan to extend fiber networks, in partnership with localities to help businesses across the U.K. The government also plans to support fiber-optic and 5G trials. The Treasury already announced other infrastructure projects will include 1.3 billion pounds to improve Britain’s roads.