No New Devon and Somerset Broadband Contract Until Nov 2020 UPDATE

The trouble prone Connecting Devon and Somerset (CDS) project, which recently took the decision to end their Phase 2 contract with “full fibre” broadband ISP Gigaclear due to significant roll-out delays (here), has confirmed that they don’t expect to sign a new supplier contract until around November 2020.

At this point we’ll assume that everybody is familiar with the broad strokes history of the CDS scheme, but here’s a simplified recap. The project first hit troubled waters in 2015 after a possible Phase 2 deployment contract with Openreach (BT) was abandoned due to disagreement on the targets and funding (arguably CDS wanted more than BT seemed able to deliver within the tight time-scale).

The fallout from 2015 caused a long delay, although Gigaclear and Airband eventually scooped up a number of Phase 2 contracts between 2016 and 2017. Sadly it became clear in October 2018 that Gigaclear’s deployment had fallen significantly behind schedule (in some areas by around 2 years) and CDS ended the contract earlier this month after being unable to agree a “credible” recovery plan (i.e. a loss of faith in the ISP’s ability to deliver).

At the time CDS said they were “working closely with BDUK on a new procurement process and taking all necessary steps to secure alternative full-fibre broadband providers for our residents and businesses.” Under this plan a fresh procurement would be launched on the “open market” this autumn, commencing a tender process to identify new provider(s) of these services.

The Latest CDS Status Update

Thankfully one of our readers (Graham) spotted an update on the progress of CDS’s future contract plan(s), which stems from what CDS Director, Keri Denton, told the latest Devon County County CIRS Scrutiny Committee event last Thursday (watch the webcast). An official update document also accompanied this event but some of the key details only came about as part of questioning by local councillors.

Summary of Key Points So Far

* Some may recall that, as a consequence of the huge delay to Gigaclear’s rollout, CDS were having to work with the Government (DCMS) on a proposed plan to secure an extension for £18.7m of public funding to March 2023 (beyond the original December 2020 end date). The meeting reveals that CDS, even if they wanted to, couldn’t have signed a new contract with Gigaclear earlier this month because full approval had not yet been received (this is now expected in November 2019).

* The current intention is to complete an ongoing Open Market Review (OMR) to identify revised Phase 2 State Aid intervention areas and then go to an open market tender sometime in 2020 this autumn, with the plan being to award contracts to a new supplier in November 2020. Obviously you then have to allow a few months for engineering surveys, among other things, and as a result the deployment would not start until sometime in 2021. Before doing so CDS will require confirmation from Government that BDUK funding will be extended.

* CDS are understood to have around 16 interested suppliers, although given how risk averse they’ll now need to be (i.e. maximum caution around awarding big rural contracts to smaller players) we can’t help but wonder whether they’ll need to suffer the political embarrassment of going back to the comparably steady ship of BT.

* Speaking of Phase 2 contracts and rollout extensions. Wireless ISP Airband have continued with their LOT 4 build to connect homes across North West Devon. To date they have covered 7,369 premises and are on target to serve a further 3,500 over the next few months (overall they have more than 850 live customers on this new network, stated as approximately 11% of properties). Airband have also completed the contract to deliver 5,000 premises across the two National Parks.

* CDS is working to increase coverage within the LOT 4 contracted area with Airband, including the opportunity to introduce a fibre broadband (FTTP) solution. The company is providing a proposal which CDS and BDUK will look to agree as soon as possible.

* The CDS plan for a Community Challenge Fund is due to be fully launched later this year, following successful pilots in Devon and Somerset, enabling local communities to have a “real hands-on say in new networks for their areas“. A capital fund of £295k has been set aside to support this extension. Its anticipated 6-8 more community solutions can be supported and work has begun to identify opportunities working with a range of suppliers.

* Some may recall that Openreach (BT) was set to harness £6m of public investment, which had been returned due to gainshare (clawback) under the earlier Phase 1 contract, in order to expand their coverage to a further 2,000 rural premises. The plan, which represents a delivery of “full fibre” (FTTP), is now said to be “nearing conclusion and is going through assurance within BDUK.”

On the one hand it’s good to see some forward motion and new initiatives being proposed, although on the other hand there’s simply no escaping the fact that CDS have now suffered several years of significant delays to their deployment plans for “superfast broadband” across the two counties. It’s little wonder that opposition councillors have been calling for a change in management of the project.

Meanwhile Gigaclear are reviewing their separate commercial rollout plans for Devon and Somerset, which is necessary since some of that may well have been dependent upon their network reaching certain areas via the state-aid supported CDS contract. As we recall, the original commercial plan would have seen them invest £67.3m to cover 43,000 premises (total of nearly 90,000 when you include CDS) but this now seems likely to be scaled-back.

UPDATE 4th October 2019

We’ve amended the second and third points above. The second point incorrectly stated “sometime in 2020” and should have been “sometime this autumn” for the open market tender. The third point was more speculative comment on our part and should not have been inferred as comments made by Keri at the committee meeting, although we stand by the approximate figure of 16 suppliers.