Part Three – The Digital Revolution (Part Five)

Economic Unit

These measures are not sufficient.
We recommend creating a full digital twin for underground assets.

This action creates a complete digital representation of underground structures and also includes information about the type and ownership of these assets.
Digital twins are used in various sectors, including ports and other infrastructure systems, manufacturing, healthcare, automotive, and urban planning.
These systems are able to display 3D and 4D spatial data in real time and integrate augmented reality systems into built environments.
When this digital twin becomes fully operational, it will automatically update with every change to underground assets, including:

• Notifying asset managers about network access

• Identifying which owners and managers are carrying out work

• Detecting unauthorized access

Although this approach may seem like science fiction, it is already in use in some areas:

The city of Incheon in South Korea has a digital twin that will soon be used to manage underground assets such as the sewage system, electricity networks, telecommunications, the metro, and even natural gas pipelines.

Ensuring fair competition in the broadband sector

The Government’s view is that creating competition is the most appropriate method for developing gigabit broadband infrastructure.

Ministers and Ofcom have worked to reduce barriers to entry for alternative network operators so that they can build full-fibre networks competing with Openreach.

The result of these actions:

Alongside Openreach’s plans to upgrade the copper network to full fibre, there are now many AltNets building competing full-fibre networks.
Major operators include CityFibre and Hyperoptic, while others operate regionally or locally, including:

• Wildanet (South West England)

• WightFibre (Isle of Wight)

• Ogi (South Wales)

FTTP networks reached 10.3 million premises by March 2023, while AltNets covered more than 8 million premises.

Competition in the broadband sector

Competition is regulated by Ofcom; this is important because BT and Openreach were fully vertically integrated until 2017.

In 2017, under a voluntary agreement, BT and Openreach committed to preserving competition, including creating a degree of functional separation.

A full review of the commitments and overall competitive performance is outside the scope of this report, but Ofcom’s view in summary is:

• The commitments are working well

• Despite concerns raised by competing networks, no substantial reasons were found to investigate complaints

This contrasts with the view of the independent association representing AltNets, which has highlighted issues such as:

• Low willingness of customers to switch

• The risk of inefficient over-building by Openreach in areas where AltNets operate

While all sides agree that consumers have benefited from increased competition, the debate over broadband competition continues.

Business rates relief for new fibre infrastructure

In 2017, the Government introduced a 100% business rates relief for new fibre infrastructure built in England for five years from April 2017 to March 2022.
This relief was not extended.

In contrast, the Scottish Government applied non-domestic rates relief for new fibre infrastructure in Scotland for 10 years from 1 April 2019.

Given that broadband expansion requires long-term investment horizons, long-term tax relief is essential.

Openreach has argued that returns on digital infrastructure investment “take decades,” and investors require a clearer and longer-term commitment from the Government.