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Government’s Digital Infrastructure Fund for broadband up and running

Government officially launches £400m Digital Infrastructure Investment Fund to encourage more construction of FTTP networks

The government has formally launched its £400m Digital Infrastructure Investment Fund (DIIF) with the hope of unlocking private sector investment of more than £1bn to kickstart the deployment of ultrafast full-fibre, or fibre-to-the-premises (FTTP), broadband networks across the UK.

First announced by chancellor Philip Hammond during the 2016 Autumn Statement, the fund reflects the government’s U-turn on FTTP broadband, driven at least in part by growing constituency-level anger over the need to support the UK economy better after Brexit.

Launching the fund on a junket to Peterborough – which already benefits from FTTP services delivered over a newly built CityFibre network – exchequer secretary to the treasury Andrew Jones said the fund would help make sure the UK’s digital infrastructure was “match-fit for the future”.

“As technologies change and people’s habits move with them, it is crucial we play our part to ensure Britain stays at the front of the pack,” said Jones.

“Gone will be the days where parents working from home see their emails grind to a halt while a family member is gaming or streaming Game of Thrones in the next room. Full fibre will provide us with the better broadband we need to ensure we can work flexibly and productively, without connections failing.”

The DIIF complements the government’s £23bn National Productivity Investment Fund (NPIF) and is supposed to help encourage more construction of FTTP networks, which remain relatively scarce because of the dominance of Openreach-run legacy fibre-to-the-cabinet (FTTC) products, which still rely on copper phone lines to bridge the gap to homes and businesses, and are therefore much slower.

The fund will be managed and invested on a commercial basis by private sector partners Amber Fund Management – part of the Amber Infrastructure Group – and M&G Investments, which is part of Prudential, to generate a commercial return for the government and, hopefully, ignite interest from other private investors in funding FTTP.

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“We see full fibre to the home broadband connectivity as becoming part of the core infrastructure of the future – just as gas and electricity distribution are today,” said Amber CEO Giles Frost.

“Our strong record of establishing and delivering success through innovative partnerships between the public and private sectors will help accelerate the roll-out of ultrafast connectivity.  We look forward to helping the government and the other investors in the DIIF to meet the twin objectives of increased ultrafast broadband access and attractive investment returns.”

CityFibre director of policy and strategy Mark Collins added: “Addressing the yawning fibre gap which sees the UK at just 2% full-fibre penetration versus countries like Spain on 80% is essential. This fund will help to underpin investor confidence and catalyse competitive full fibre roll-out. As the UK’s leading builder of full fibre infrastructure, we look forward to engaging with government to explore how the DIIF could accelerate our future plans.”

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