2. How can cities speed up the roll out of infrastructure?
The main barriers that slow down installation and push up the cost of digital infrastructure investment have been studied in previous reports.19 Taking these findings into account, in addition to interviews with different cities, national government and mobile and fibre network operators, this section highlights what can be done to encourage and enable investment in digital infrastructure, organised across three themes:
- Improve market conditions – telecoms infrastructure inherently requires a large front-end investment and relatively low operating costs. There are several steps that could be taken to ease this cost or at least mitigate the risk associated with the operation
- Make access easier – the process of getting the pipes, the masts and the cells in place is time and resource intensive. This section highlights the institutional changes that could ease this relationship for both local authorities and network operators
- Take the initiative, be a testbed or innovator – for cities that are ahead of the curve in installing the networks, there is a potential opportunity to act as a testbed for upcoming applications or models of deployment or ownership of infrastructure
Create a more attractive market
The Government has expressed its enthusiasm and extended support to the rollout of fibre infrastructure across the UK through the Full Fibre Networks Fund and there is funding yet to be allocated. The private sector has clearly demonstrated an appetite for investment, as shown by the expansion plans of firms such as CityFibre and Hyperoptic. Cities are levering their assets and knowledge to support these and their own ambitions too. York aims to build on its achievements in harnessing and attracting investment to become the UK’s first gigabit city where all business and residents will have access to FTTP.20
There are a number of clear steps cities can take to reduce the associated cost and risk for investors that would hasten this process and get them ahead in the line for world-class infrastructure.
- Simple as it may seem, it is vital that cities have a clear point of contact for firms looking to invest in digital infrastructure. Interviews revealed that even local government leads working to support digital connectivity have found it difficult to find who their appropriate counterpart is in neighbouring authorities. This contact should have senior authority or support from the chief executive or chief digital officer where these are in place.
- Cities should know and lever their existing assets. If there are any existing fibre or ducting networks that could be used for fibre, then that should be made clear. Traffic light systems, CCTV networks and fibre ducting belonging to firms that are no longer in operation could all reduce the time and cost of rolling out fibre. This core network can then create a potential market for affordable extension to other premises.
Box 4: Knowing and levering existing assets
Bristol City Council has levered its ownership of an unused ducting network to underpin its wider Bristol Is Open smart city innovation platform. York has similarly leverd its traffic light network to rollout fibre (see case study 1 below).
Ordnance Survey is working with the British Geological Survey and Future Cities Catapult on Project Iceberg to help cities better understand and share knowledge of underground assets. This is intended to help speed up planning decisions and the delivery of underground assets such as fibre optic cables.
- Work at city scale to reduce the complexity of rolling out networks in cities. Common planning rules or shared digital infrastructure teams lower the costs to infrastructure providers of dealing with cities. This allows networks to expand naturally and efficiently according to proximity and return on investment rather than conform to arbitrary local authority boundaries. Pooling this task should also lower costs for individual authorities.
- Reduce risk for investment by using procurement effectively and aggregating demand. Public sector bodies have the budgets for long-term digital connectivity contracts and geographic scale across their estate to offer fibre network providers an ‘anchor network’ to invest in. Working with the private sector, cities could coordinate and support attempts to aggregate local demand. The third section of this report talks about how procurement can also be used to increase the adoption of digital technology.
- Set out city development plans, showing where new housing, commercial and transport infrastructure will go and when. This gives investors a clearer idea of the business case for investment in a city when planning where to work next.
- Take advantage of the convergence of fibre and mobile networks. Mobile network operators need fibre connections to provide the data backhaul to and from masts and cells. These will proliferate with 5G. Fibre providers such as CityFibre look at mobile operators as major customers in addition to commercial and residential premises. Support for fixed networks will make cities more attractive to investment from mobile operators and vice versa.
Case study 1: York – Innovative procurement and a culture of experimentation
York has combined innovation in procurement to deliver digital connectivity with a council-wide ambition to use digital innovations to solve problems, save money and improve services for the public. This ambition and action have led to York receiving investment from the private sector to rollout FTTP, making it the number one city in the UK for average internet speeds. York aims to become the first ‘Gigabit city’ and is on course for 70 per cent full fibre coverage by 2019.
In 2009, York tendered for a new consolidated connectivity platform and service. Rather than simply provide internet for council buildings and key infrastructure platforms such as traffic lights, the city saw the potential in a bid that proposed levering this consolidated demand and large contract to install a fibre optic ring. As well as fulfilling the original specification, it allowed more of the public sector estate – council buildings, libraries, schools, community hubs, traffic management and strategic transport hubs – to connect affordably and easily to a high-speed network to the benefit of workers and consumers. The network has also underpinned a free, high-speed wifi network in the city centre.
In order to offer greater scale in procurement and a more attractive tender for bidders, York has a joint Head of ICT, Super Connected Cities & Digital Innovation with Harrogate.
To improve city management, York has installed LoRaWan sensors on its roads which record transit data and monitor road temperature. This information will allow the council to only grit the roads that need it in cold weather conditions, saving time and money and improving the service. The city is also in the process of installing moisture and temperature sensors in social housing. The aim is to save money and improve housing quality for residents. Damp or cold readings are flagged for investigation, and maintenance can be carried out before problems become harmful, unpleasant or expensive to rectify.
This will be more time and cost efficient than an officer carrying out inspections in person.
While 5G will transform the potential for the ‘Internet of Things’ to help improve public services, York has shown that applications do not need to be expensive or complicated and can be introduced today if they are the right solution to a problem.
This infrastructure investment has been accompanied by simple but effective improvements to digital interactions, such as redesigning the council website to suit handheld devices and the introduction of online applications and payments for council-run services. It is estimated that around 5,000 transactions are carried out online every month, saving the council around £210k in running costs.
Making access to sites easier
Gaining access to sites within a reasonable time and at a reasonable cost is cited in interviews – by mobile operators, fibre companies and even councils supporting them in their work – as one of the biggest stumbling blocks for rolling out infrastructure.
Better existing arrangements
One of these elements is the variety of wayleaves – a right of way from a landowner – that require individual consideration and negotiation before work can begin. Business and network operator frustration in the City of London led to the creation of a simplified wayleave worked on by all stakeholders, with the support of DCMS (see case study 2 below).
- Promote awareness of the simplified wayleave among landowners, businesses and any network operators in their city. Organisations such as housing associations and other social housing providers should adopt simplified wayleaves.
- Ensure simplified wayleaves are uniform across the public realm and public estate within cities to reduce unnecessary complication, cost and delay. Cities could also work with other cities to standardise these arrangements at a larger scale.
- Ensure fixed and mobile digital connectivity including ducting is planned into all new developments. The proposed London Plan requires this. Plans should provide adequate cells around tall glass and steel buildings.
- Integrate readiness for 5G and full fibre when carrying out street works such as renewing street lamps, traffic lights and resurfacing roads or pavements. Over the coming years a ‘dig once’ mindset could avoid disruption and reduce costs to businesses and the public, as cities make supporting digital connectivity another aspect of improving the public realm.
Innovative forms of access
Dense fibre and mobile networks connecting every building and potentially lamppost require new ways of working, commercial models and capacity in local authorities to enable or deliver. The costs and novelty of 5G rollout, as well as the urban and city centre focus, means that cities are well placed to trial new and different models of deployment and ownership, as has been seen with fibre networks. Cities have access to a unique range of sites, including public buildings, land and assets such as bus stops and traffic lights. Local authorities have already developed new methods of deployment to take advantage of this.
As part of bidding for the £100 million 5G Urban Connected Communities Fund,21 some cities have considered how they might lever their particular assets, future public procurement and the potential demand for fibre and 5G. This can speed up investment in better digital connectivity for residents and public sector users, while at the same time create a revenue stream through a publicly owned local fixed and mobile digital infrastructure.
Another deployment method already in use is the private concession model to deploy small cells on street furniture. Concessions have been agreed in 14 London boroughs, Aberdeen and in the City of London, as discussed in case study 2. Cities lever the value of their assets in return for free public wifi and create a revenue stream. This model means that cities deal with one organisation rather than many, which could reduce the burden on resources and speed up the rollout of better connectivity.
Figure 2: City of London – keeping up with the global standards in connectivity
The City of London is a key part of London’s standing as a global financial centre. As such, the City of London Corporation views it as imperative for the Square Mile to maintain its edge across various domains – skills, regulation, and infrastructure, including digital connectivity.
The City of London Corporation has placed an emphasis on staying up to date on the connectivity technology available right now and preparing for the advances yet to come. To this end, the infrastructure and the legal framework are being upgraded and adapted to improve not just the provision of a network but also access to it.
On the fixed network side, the City of London’s key achievement has been the creation of a standardised wayleaves document.22 Acquiring a wayleave from a building owner is consistently cited as a significant stumbling block for telecoms operators across the country. The corporation partnered with a range of stakeholders to publish the standardised wayleave and an accompanying toolkit. The document has been downloaded around 2,000 times so far, is championed by the Greater London Authority (GLA) for use by other London boroughs and Greater Manchester is also introducing a standardised wayleave.23
For mobile connectivity, the City of London adopted a concessions model to enable investment in the network. In 2017 it created a 15-year contract giving access rights to install and operate small cells on street furniture and macro cells on roof spaces of corporate assets under open access obligation for other providers. In return, the concessionaire will invest to upgrade 4G and WiFi and start delivering the 5G network in the Square Mile. The free WiFi network has been accessed by 100,000 registered users so far, and the intensification of the 4G network has started with the installation of 400 new microcells, which will help prepare the City for 5G.
CTIL, which is Telefónica and Vodafone’s infrastructure joint venture, is the City of London’s partner on the project. It has funded someone to sit within the Corporation for two years to coordinate the increased work with the highways division that this programme will create. The Corporation expects this concession to be revenue-positive.
Act as a testbed
The Government recognises that there will be no single answer to the effective rollout of better mobile and 5G digital connectivity in cities and that partnership between operators, cities and business will be important. The £200 million 5G Testbeds and Trials Programme, one element of the National Productivity Infrastructure Fund, has so far seen six areas trial a variety of new use cases of 5G. Around £100 million of this fund will soon go to one large city in the 5G Urban Connected Communities24 project to test new use cases and infrastructure deployment models. The Government is set to announce the winning bid Summer 2018 and to have work underway by early 2019.
Some cities see a clear economic opportunity in getting digital infrastructure in place now when clear commercial uses are still years away. 5G products will need to be developed and tested somewhere with this infrastructure in place, and many applications – connected autonomous vehicles and a far more advanced Internet of Things – are likely to be targeted towards making cities work better. Acting as a testbed is viewed as a way to attract investment and put the cities involved at the front of the line when the applications do come.
This has been the case for Milton Keynes (see case study 3) which is trialling autonomous vehicles on its streets today. Helped by funding from the 5G Testbeds and Trials Programme, Bristol and Bath are looking at how 5G could impact on tourism, creating more immersive experiences for visitors, while in Tyne and Wear applications are looking at energy, transport and health.
Only one city will win the 5G Urban Connected Communities competition, but all bidding cities should look to pursue any viable business models for use cases and deployment.
Case study 3: Milton Keynes – using digital connectivity to enable new transport solutions
Milton Keynes has made the decision that it wants to be at the forefront of technology, to advance its image as a modern city. Leading in 5G is part of this ambition.
The New Town has grown rapidly into a city since its creation. Its heritage has endowed the city with a car-based transport system. But as the population grows and the number of jobs in the city centre expands, the city’s excellent road network and parking facilities cannot expand. This has created pockets of congestion and delay.
The city cannot quickly or easily change its layout and dispersed housing pattern, and this makes conventional public transport solutions to congestion such as buses or rail unsustainable in some areas, with too few potential riders to fund these services.
This seemingly intractable problem of supporting economic and population growth while also addressing congestion in a city where conventional public transport is unsuited has opened up an opportunity for trialling innovative solutions. The city hopes that autonomous buses or pods would eliminate the cost of drivers (although create other costs) and this, combined with demand-led services ordered from a smartphone, could make services to collect people from less densely populated areas viable.
The city has attracted in firms that are trialling autonomous vehicles today. This fits into a broader range of actions through which the city hopes to demonstrate this ambition, such as a city-wide electric car charging network. The city has plans for a new university to work with businesses to develop technology, levering its existing economic strength in this area.
What is the Government doing?
The Government is working to create a ‘world class’ physical digital network in a number of ways, set out in its 5G Strategy for the UK. A number of these policies seem to be, or are likely to be, working on their own terms:
The Government’s Housing White Paper25 sets out a requirement for local authorities to include the provision of digital infrastructure in planning policy, as does the proposed National Planning Policy Framework (MPPF).26 This will be a positive step to support local plans if it makes it into legislation.
Broadband Delivery UK’s (BDUK) £1.6 billion superfast broadband investment programme is being followed up by a £200 million Full Fibre Local Networks challenge fund for cities to bid for. Thirteen areas won £95 million in the first round in March.27 The winning schemes offer a variety of different models for how to support the rollout of fibre across different cities. For example, laying fibre along the Blackpool Tramway, connecting to a transatlantic cable underwater off the coast of Cardiff, or creating long-term contracts for fibre in public buildings in Wolverhampton.28
The Telecommunications Infrastructure Act 2018 was passed to support the rollout of full fibre and 5G. It sees communications providers exempted from business rates for five years on new fibre installation.
Others have been less successful so far on their own terms. The Digital Economy Act 2017 introduced reforms to the Electronic Communications Code (ECC), previously updated in 1984. On the announcement, DCMS declared the aims of the new Code as to:
- Bring down the rents telecoms operators pay to landowners to install equipment to be more in line with utilities providers, such as gas and water
- Make it easier for operators to upgrade and share their equipment with other operators to help increase coverage
- Make it easier for telecoms operators and landowners to resolve legal disputes.29
The then DCMS Secretary of State, Matt Hancock MP, had stated that the code will ‘ help promote investment in new technologies such as 5G, and give mobile operators more freedom to improve their networks in hard-to-reach places.’21
The new code replaces freely contracted market rents for mast and cell sites based on the value to network operators with a much lower compensation level based on the value to the landowner. The Government’s impact assessment of the ECC had expected it to reduce rents to landowners by around 40 per cent, or £709 million over 20 years, and lower business rates by up to £307 million over the same period.31 The greatest absolute cuts will be in cities where the rent values for mobile mast sites are highest as they can serve the largest number of customers. The British Property Federation highlights the case of a site in the City of London with a current rent of £32,000 per annum that was quoted compensation of £80 per annum for renewal.32
Landowners also have less flexibility under the new code, required to give operators 18 months’ notice to remove network infrastructure, a significant limitation that can delay new commercial or residential developments that could have wider economic or social benefits. It is unsurprising that among British Property Federation recommendations to the Government to improve the code and support the improvement of digital infrastructure, one is that private landlords should only be approached ‘as a last resort’ if no alternative sites under public ownership can be found.24 At present, many property owners, rural and urban, are choosing not to engage with operators to develop new infrastructure until legally compelled to do so.
The code’s full implementation will await the first legal cases between operators and property owners to be decided. This may not be until 2020 when full commercial 5G networks are expected to be up and running in cities around the world, and mobile data usage in UK cities will have doubled. In the short term, it seems that the provisions of the code have unintentionally led to a temporary pause in much new development and a permanent reluctance to host new mobile infrastructure among landowners.
The Government has launched the Future Telecoms Infrastructure Review to look into these and other issues affecting rollout, while a Barrier Busting Task Force is working with stakeholders to overcome any areas of conflict that might slow down rollout, including problems of co-ordination or implementation of other government policy.
The High Court in February ruled that the installation of mobile antennae on poles on top of buildings could not be carried out under permitted development.34 New, altered or replacement masts allowed under that order, such as wall mounted antennae, will also now need planning permission. This is likely to limit the rollout of improved 4G in cities, and the Government should make it easier for landowners and networks to improve digital infrastructure where there is agreement.
The Government will need to continue to work with cities to achieve its aims. But there is more it could do to support investment in digital infrastructure in cities:
- Require provision for high quality fixed and mobile digital connectivity in the final NPPF to give greater clarity and certainty to local plans as they are brought forward
- Review the Electronic Communication Code in December if it remains a barrier to improved digital connectivity in the short term in cities.
Major housing developers and network operators are working together to deliver fibre and superfast internet into new developments.35 But this is optional and, in developments of 30 or more homes, requires nine months’ notice before its first use36 for free installation of full fibre. On smaller sites developers may only get FTTC and have to pay for the installation. In London over 50 per cent of homes in new postcodes had access to full fibre, but nationally up to 25 per cent of new builds are not even connected to FTTC.
Full fibre and provision for high-quality mobile connectivity should be required by the Government in the NPPF and local plans in cities. This will ensure that the Government’s investment through BDUK to connect existing properties to fibre will not be required for new developments.