Gov Helps Put 2 Million Extra UK Premises in Reach of Superfast Broadband

The Government’s £1.7bn state aid fuelled Broadband Delivery UK (BDUK) project, which is predominantly working with BT in order to make fixed line superfast broadband (24Mbps+) connections available to 95% of people in the United Kingdom by 2017, has announced that its efforts have helped to put the service within reach of 2 million premises (total UK coverage of approximately 80%).

The programme was first established during 2010 in order to help upgrade areas that might otherwise have been left either completely excluded from the deployment or forced to wait significantly longer to receive a superfast connection, often due to being considered not commercially viable for an upgrade (i.e. too expensive).

So far most of the related work has been conducted by the national UK telecoms giant, BT (Openreach), which dominates practically all of the primary Local Authority contracts. Admittedly there are a few small exceptions in parts of certain counties, such as the Cotswolds Broadband scheme in West Oxfordshire and several Gigaclear deployments, but BT still remains the dominant force.

As a result most of the additional coverage announced today has been achieved by using the operators ‘up to’ 80Mbps capable Fibre-to-the-Cabinet (FTTC) service, with a little 330Mbps Fibre-to-the-Premises (FTTP).

BT are also busy trialling a number of other technologies that may play a future role, such as the VDSL based Fibre-to-the-Basement (FTTB), Fibre-to-the-Remote-Node (FTTrN), Wireless-to-the-Cabinet (this is already being used on some islands in Scotland), Fibre-to-the-Distribution-Point (FTTdp) and of course G.fast (Click here for more details).

However it must also be remembered that the vast majority of the total coverage for superfast connectivity has so far been achieved through commercial investment from operators like BT and Virgin Media, with some alternative network (altnet) providers like Hyperoptic, Gigaclear and Cityfibre etc. also playing a smaller but still very important role. The work they’ve done is not reflected here because BDUK focuses on the non-commercial areas they don’t reach.

Sajid Javid, Culture Secretary, said:

“Today there are two million more UK homes and businesses with access to superfast broadband than there were two years ago as a result of this ambitious project. This is a tremendous result that is already making a huge difference to millions of people. We want everyone in the UK to be able to enjoy the benefits of superfast broadband, that’s why we’ve begun work on reaching the last five per cent of communities not covered by existing plans.”

Joe Garner, CEO of Openreach, said:

“We’re proud to be delivering this great British success story in partnership with the Government, and have committed up to £1billion of our shareholders’ money to the projects. The programme is on schedule overall and our people continue to work flat-out on connecting homes and business in the UK’s hard-to-reach areas. If we come in under budget, savings can be reinvested to take coverage even further. Funds will also be released if take-up exceeds expectations, all of which is further great value for the taxpayer.”

BDUK Figures – Premises Passed by Region

North East England – 85,048
DURHAM 42,792*
NORTHUMBERLAND 36,713*
NEWCASTLE 5,543*

Yorkshire and the Humber – 232,536
NYNET 142,751
EAST RIDING OF YORKS 23,234*
WEST YORKSHIRE 40,231*
NORTH LINCS 26,320*

North West England – 272,894
CUMBRIA 66,685*
CHESHIRE 54,831*
MANCHESTER 15,586*
LIVERPOOL MERSEYSIDE 27,901*
LANCS 107,891*

Midlands – 291,985
LINCOLNSHIRE 68,747
DERBYSHIRE 24,876*
LEICESTER 22,188*
RUTLAND 9,416
NOTTINGHAMSHIRE 27,439*
NORTHANTS 36,289
STAFFORDSHIRE AND STOKE 30,137*
SHROPSHIRE 31,808
WORCESTERSHIRE 13,976
CSW 27,109*

South East England – 265,935
KENT 69,105
SURREY 77,456
BERKSHIRE 8687*
EAST SUSSEX 27,661
WEST SUSSEX 26,252
OXFORDSHIRE 26,810
ISLE OF WIGHT 1,655
HAMPSHIRE 28,309

South West England – 200,272
GWB SOUTH GLOUCESTERSHIRE 13,632
GWB WILTSHIRE 25,455
DORSET 22,854
CDS 100,083*
H&G 38,248

East of England – 288,729
SUFFOLK 65,915
NORFOLK 115,764
BEDFORDSHIRE 7,737
CAMBRIDGESHIRE 55,373
ESSEX 20,000*
BUCKS&HERTS 23,940

Scotland – 220,000*

Wales – 299,876

Northern Ireland – 17,500*

The Government has also confirmed that seven pilot schemes (out of the original eight) under their £10m Innovation Fund, which was setup last year to “test innovative solutions” for delivering superfast broadband services to the final 5% of the United Kingdom (i.e. the most difficult to reach rural areas), have now moved into deployment. You can now also find a state aid consultation for the Cybermoor scheme (here) and the Quickline project (here) posted online.

A Quick Note About the Size of the Final 5% (BDUK Data)

The unserved areas vary significantly in terms of the density of premises:

* Approximately 20% of the unserved areas are likely to be in areas with greater than 2,000 premises per km2, however the majority of these are in cities where BDUK’s current approach is to stimulate the market through demand-side measures.

* Approximately 20% of the unserved areas are likely to be in areas with population density between 500 and 2,000 premises per km2; and

* Approximately 60% of the unserved areas are likely to be in areas with population density below 500 premises per km2.

The dropped pilot was MLL’s project to create a common wholesale OSS/BSS platform for integrating / aggregating via a rural fixed wireless network. Apparently MLL found “unforeseen implementation complexity and commercial risks which challenge the pilot’s feasibility within its original cost estimates and budget“. The MLL pilot was thus stopped and the other seven remaining MTP projects are proceeding into deployment; feasibility reports will be updated during the deployment phase which runs until the end of March 2016 (details here). The first customers will be connected by the end of February 2015.

According to today’s update, one of the trials in Exmoor will very shortly be delivering superfast broadband to homes via satellite. “This is the first time that satellite will be used to deliver superfast speeds to residential customers in the UK at affordable prices,” said the PR. Most consumer satellite packages currently top out at speeds of just below 24Mbps (the Exmoor trial is aiming for 30Mbps), although crucially a decent usage allowance via Satellite is normally still very expensive.

Another big question going forwards is what kind of impact “claw-back” (i.e. this could return some public investment for helping future upgrades once take-up in BDUK areas reaches 20%+) and other savings will have on future coverage.

Data published by ISPreview.co.uk last year shows that most areas are still some way off the 20% tape-up goal (here), which is perhaps understandable given the early stages of deployment and complications with service awareness, existing contract lock-in and price premiums etc.

In response to a question posed about this matter last year the CEO of BDUK, Chris Townsend, said, “As we are drawing to the end of phase 1, we are already reviewing the success that we have achieved to date. We are looking at the additional savings that we are making, because as we are working with BT – I mentioned earlier that we have the smart contract management process in place – we are monitoring all BT’s expenditure and we are already receiving significant savings from the first deployment of phase 1, through the smart contract management. We are already deploying those additional funds to extend phase 1 further into deeper rural areas. That is going on with each of the local bodies — we are planning that. Once we finish that further deployment, we are hoping to go seamlessly into phase 2 so that there is not a break between them.”

ISPreview.co.uk recently requested further details on what the “significant savings” are and we were told that it is not possible to provide any figures at this point in time, although some Local Authorities that have already technically completed the Phase 1 contract (e.g. Rutland) will apparently soon be able to help give a practical demonstration of the savings and how they can be reinvested to improve coverage. The National Audit Office recently offered some additional insight for all this (here).

NOTE: For some odd reason this announcement comes only a few days after DCMS published their related Quarterly Broadband Performance Indicator update, which creates a bit of repetition but also adds some context to the above. Personally we wish the Government would publish these announcements together so as to avoid repetition and confusion.