Britain's post-Brexit Industrial Strategy needs a fiber diet as Corbyn gets 'cyber-physical'

Profile picture for user slauchlan By Stuart Lauchlan November 21, 2016
Summary:
The UK government is announcing a hefty broadband investment three times this week, but is it money well spent to create a post-Brexit digital age Industrial Strategy for Britain?
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Jeremy Corbyn at the CBI

British politicians are falling all over themselves this week to get on top of the post-Brexit so-called Fourth Industrial Revolution and the digital economy ahead of the Chancellor’s Autumn Statement on Wednesday.

Yesterday Prime Minister Theresa May pitched the need for a digital age Industrial Strategy to the CBI (Confederation of British Industry) Annual Conference. She was followed later in the day by the Leader of the Opposition Jeremy Corbyn, who used his speech to tackle some tech matters as well. He told delegates:

The challenge of Brexit and cutting edge technology, especially from the Gig Economy, throws up both problems and opportunities. Which is why I invite all of you here, along with businesses across the UK, to get involved and engaged in helping us shape Britain’s future.

Corbyn cited one of his predecessors as Labour Party leader, Harold Wilson, who said that if the UK was to prosper a ‘New Britain’ would need to be forged in the white heat of a scientific revolution.

Over fifty years on it’s debatable whether that white heat ever came to anything more than a rolling boil, but Corbyn said it’s time to get it right this time around:

We now face the task of creating a New Britain, not just out of Brexit and a new relationship with Europe, but from the challenge of the fourth industrial revolution.

We know the first industrial revolution saw mechanized production powered by steam. The second was powered by electricity. While the third was driven by the internet and digital communication. The Fourth Industrial Revolution is being powered by the Internet of Things and Big Data to develop cyber-physical systems and smart factories.

Labour Party commentators, including Shadow Minister for Industrial Strategy Chi Onwurah, had been critical of the Prime Minister’s Industrial Strategy pitch:

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This was a theme continued by Corbyn who picked up on the Prime Minister’s pledge to back innovators and long-term investors to find winners. The Labour Party leader said: 

That isn’t about the old straw man of 'picking winners' or pouring good money after bad into white-elephants. Instead we will set the missions, put in place the right institutional framework and support, and provide businesses with the opportunities to develop our economy.

He added:

How we best respond to Brexit and the Fourth Industrial Revolution will require radical thinking. It will challenge yesterday’s received wisdom of private good, public bad. It will need common-good intervention.

Fiber diet

Meanwhile, back on the government side of things, Chancellor of the Exchequer Philip Hammond is making the most of a planned £400 million investment in “gold standard full-fiber” broadband as part of a new Digital Infrastructure Investment Fund to boost commercial finance for emerging fibre broadband providers looking to scale up.

Only around two percent of UK homes and businesses currently have access to full-fiber broadband connections. That’s about 500,000 addresses.

These developments were pre-announced yesterday by Prime Minister May, ‘leaked’ today to the media and will then be formally announced tomorrow as part of the Autumn Statement - so that's three bites at the cherry there.

There’s a catch in all this. The new funding will have to be matched by the private sector, as was the case with the Broadband Delivery UK (BDUK) super-fast broadband program.

Nearly all the contracts there were won by BT’s OpenReach arm. Today, BT Chairman Sir Mike Rake offered his firm’s view on the commitment to get more households on fiber when he described it as:

the long-term game.

Enough said. Leopards don't change their spots.  

This time around though the government says it wants the extra cash to go to small operators, not to BT, which is a start. That leads Greg Mesch, CEO of CityFibre, to say:

Britain’s industrial strategy needs a digital backbone, and it is essential that we move quickly to plug the UK’s ‘fiber gap’ and empower our service-based economy. This new funding, stimulating competitive fiber rollout at scale by new communications infrastructure builders, is a catalyst for the delivery of the UK’s fiber future.

The Minister of State for Digital and Culture Matt Hancock took to Twitter to act as government cheerleader-in-chief for this latest move, parroting the usual party-line about the UK’s supposed digital leadership:

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It’s unclear what metrics are being used to back up this leadership claim. The  2016 Digital Economy and Society Index (DESI) from the European Commission earlier this year, saw the UK ranking for mobile and fixed line broadband connectivity fall from 4th to 6th place in the European Union.

Meanwhile a report by broadband comparison site cable.co.uk found that there are areas of the UK where the broadband speeds are slower than could be found at a base camp up Mount Everest! Today the firm’s director of communications Dan Howdle states:  

There still remains millions of households in the UK for whom adequate broadband is a daily struggle…While it is commendable that the Treasury considers broadband provision in the UK worthy of additional government funding, it is utterly absurd that this funding should provide to a minority speeds for which there is no known or useful purpose while so many others struggle for anything approaching basic adequacy. The government should be spending this money where it matters most, along with putting in place firm restrictions as to exactly where this new network provision can be applied – prioritising those who need it most.

My take

I’m completely with Howdle on this one - this additional funding is welcome, but could be better directed.

As I’ve documented repeatedly, the city center of Brighton, a so-called digital hub in the South East of England, can’t get broadband speeds of more than 4mbps. I know of people whose broadband speeds have dropped below 1mbps.

BT won’t help them - not in its financial interest. Ofcom won’t help them - no spine.  And the government won’t help them - Digital Minister Hancock’s BT-appeasing tweets suggest he's content with how we're progressing.

As for Jeremy Corbyn’s speech, it was well-intentioned no doubt, although the cynic in me wonders if he had ever heard of “cyber-physical” systems before he read the words off his speech yesterday.

Still, it is encouraging at least that both the main political parties in the UK are focusing in varying degrees on the challenges of building a digital age Industrial Strategy for the uncertain post-Brexit times ahead.