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Devon and Somerset Restart £39.5m Hunt for ISP to Upgrade Broadband

Tuesday, July 12th, 2016 (12:01 am) - Score 750

After a long wait the much delayed second phase of the Connecting Devon and Somerset project, which suffered a setback in June 2015 after failing to reach a deal to extend “superfast broadband” (24Mbps+) coverage with BT, has finally begun a new £39.5m procurement.

Currently the existing project is already working with BTOpenreach (Phase One Broadband Delivery UK contract) to make “superfast” connectivity available to over 90% of local homes and businesses by the end of 2016. On top of that they’ve also signed a separate £4.6m contract with fixed wireless ISP Airband to cover 5,800 premises across the Dartmoor and Exmoor National Parks (here).

A Brief History Lesson

However the original £35m plan to extend their Phase One BDUK contract with BT (aka – Phase Two, Superfast Extension Programme), which would have aimed to achieve 95% coverage by 2017/18, collapsed after CDS claimed that the telecoms giant had been unable to commit what was needed or offer “any reassurances that the 95% target could be reached” (here).

At the time BT countered that their offer would have pushed superfast capable FTTC/P “fibre broadband” services out to another 34,400 premises (around 95% coverage) on top of the current contract, but it might have taken until the middle of 2020 to complete and BT said they wouldn’t have seen a return on their investment for 15 years.

The timing couldn’t have been worse because the deal collapsed just as the EU’s original umbrella broadband state aid agreement came to an end, which limited CDS’s options and meant they had to wait until the new agreement was signed in May 2016 (here) before conducting the new open market tender exercise.

Today’s Announcement

Under the new plan CDS has committed a larger public investment of £39.5 million towards the procurement of a new network supplier / ISP, which has been boosted by an additional £4m investment from the Government’s South West Ultrafast Fund (i.e. the £4m should help to upgrade 4,000+ premises in contract two). The funding is also expected to be further boosted by commercial investment from the winning supplier(s).

Apparently this investment will be enough to roll-out Next Generation Access (NGA) broadband services (30Mbps+) and ultrafast broadband (100Mbps+) to “tens of thousands of homes and businesses” across Devon and Somerset in “predominantly rural areas“.

However it’s noted that CDS hasn’t yet set a firm target and instead merely states that “potential suppliers will set out their plan to connect as many people as possible” by the end of 2017, which could also leave the door open for another bid from BT (if they won that might be considered a touch embarrassing for CDS, politically speaking). We have asked BT if they intend to bid and are waiting to hear back.

David Hall, Somerset County Council’s Deputy Leader, said:

“The broadband market is a lot stronger and diverse than when we signed the contract for phase 1. Supplier events held in the past year were well attended with over 30 different suppliers showing interest. We hope to build on the success of the open procurement model for the National Parks ensuring we come up with the best possible solutions for our phase two funding.”

Andrew Leadbetter, Devon County Council, said:

“This launch builds on the success of the first phase of the publically funded CDS programme and comes one week after our milestone announcement connecting a quarter of a million premises to superfast broadband.

Also, in our most difficult to reach areas such as Dartmoor and Exmoor CDS will have by the end of 2016 delivered superfast speeds to around 5,800 premises – a real boost to our rural economy. We look forward to receiving innovative tender bids to build on this momentum as we move into the second phase for the rest of the CDS area. Overall, CDS is doing well, but we want to do even better for residents and businesses still waiting for broadband.”

The phase two procurement itself has been divided into six lots to encourage greater competition from a broader range of providers and technologies. The programme will accept submissions from providers for one or more lots, all of which will be evaluated individually.

In other words there’s a strong prospect of several providers winning different aspects of the contract or perhaps bidding as a consortium. This is what we have been expecting to happen since last year and indeed CDS has recently held a number of meetings and discussions with alternative network providers.

Whatever the outcome, CDS hope to announce a winner or winners by the end of 2016 and at that rate they’ll be lucky to even get the roll-out itself started by the end of next year (depending upon the proposed ISP, technology and approach).

Separately the CDS programme has announced that their Broadband Voucher Scheme, which offers up to £500 to help upgrade premises that can’t even get a basic 2Mbps broadband service (this should cover the cost of installing a fixed wireless or Satellite connection etc.), has so far received over 1,400 applications and 1,000 residents / businesses have already received vouchers.

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Mark Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
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12 Responses
  1. Avatar FibreFred says:

    I’m pretty sure I mentioned they would end up going with bt again and I’m sure they still will. And if they do what a waste of time playing games. I doubt the 2020 time frame is still on the table so all cds will have accomplished is what they were trying to prevent.

    I was understand trying to get the best deal but read the market and the player’s it’s not like many others were stepping up.

    1. Avatar NGA for all says:

      Probably, perhaps Gigaclear will try for one area. How will BT organise for doing fibre extensions in the form of FTTP clusters? BT will be running out of cabinets.

      I ask this in the context of all the clawback, underspends and likely BT capital contribution. The lack of resource looks problematic.

      BT does not have to respond, but I assume as USO means they will do this at their own pace.

    2. Avatar FibreFred says:

      No they don’t have to respond, it sounds like they’ve put money into numerous versions of the tender to date and their own cost and said its a 15yr+ payback so I would understand if they didn’t

    3. Avatar Sunil Sood says:

      I recall that part of the dispute between CDS and BT was that BT logically wanted to reach their coverage target by building the network organically – which would be both cheaper and quicker – while CDS wanted them to cover the more remote sites first but with the same coverage/cost targets which BT said was not possible.

      I wonder if CDS have had a change of heart yet?

    4. Avatar MikeW says:

      That was my understanding too, Sunil.

      I guess we’ll their current aims, modulated by the new EU requirements, in about a year…

    5. Avatar TheFacts says:

      @NGA – what do you mean by running out of cabinets, FTTP is being installed by BT in some CDS areas?

    6. Avatar wireless pacman says:

      EU requirements?

      Nah, not relevant any more! 🙂

    7. Avatar NGA for all says:

      @FibreFred – The challenge I think is not helped by fact this contract makes no reference to Phase 1. It suggests there may or may not be another 50k premises to be added into this contract.
      There is no reference to underspend, the investment fund (BT capital contribution) and clawback and how it is to be used.
      So, yes some FTTP clusters are being created but why not describe the progress and the ambition.
      It does look like a poor relationship with BT (see the CDS submission to CMS select committee inquiry) is leading to sub-optimal decisions overall.
      This is not unrelated to the resource decisions. This £258m capital deferral now in BT’s accounts would fund 2,000 apprenticeship engineers for 3 years. More money could be found as well through the NGA Cost Modelling work currently underway with Ofcom to keep the Fibre access momentmum going.

    8. Avatar NGA for all says:

      @Sunil Your suggesting BT wants to do it its way. It would appear where possible LA will take the opportunity to insert Gigalclear to get more and cheaper FTTP.

      So Gigaclear FTTP cherry picks, but a strategy based on cabinets leaves those beyond 1200m with no improvement in service.

      The BT case would helped enormously if they explained how far and how quickly the £258m capital deferral owed to LA’s will be spent. They should also provide a guide to the capital contributions owed. The LA underspends are also large because you can claim the target without doing the in-fill.

      Undisclosed is that most of Phase 1 payments can be re-cycled (lower costs, higher take-up) but no plan white paper exist to show what that means. I think it means a significant number of FTTP clusters – many thousands of them.

      I think folk are gaming this so high, the overall opportunity to transform the network and ask for more investment through the first round of NGA Cost Recovery will be lost.

  2. Avatar DTMark says:

    Out of interest, what happens when, inevitably, some or many of the proposed solutions are wireless solutions?

    Take a contiguous area of several villages with maybe 12 BT cabinets only 8 of which have been “upgraded” leaving some disparate pockets with nothing.

    The wireless operator isn’t interested in “doing the 40 houses at the bottom of that lane”. They might have a flicker of interest in doing all three villages in their totality. Though the commerciality has been reduced as some can get VDSL thus uptake will be less. So will want more subsidy or near 100% subsidy.

    That might well be cheaper than paying BT whatever it demands.

    Now, State overbuilds State, thanks to a shambles of a lack of foresight.

    Is that an issue under the “rules”? Is the wireless operator required to erect a Faraday cage? 🙂

    1. Avatar TheFacts says:

      100% subsidy = paying wireless operator ‘whatever it demands’…

    2. Avatar NGA for all says:

      The move from mixed economy solution to ‘mostly cabinet’ has created a new class of excluded. It is difficult to see how putting the post codes of the new excluded into the new ‘white area’ where underspends, clawback and BT contributions could be used to in-fill what you describe on the existing contracts. The new contracts are going out before any ‘true up’ is published.
      The money exists within the process, although it maybe now be in a form that cannot be readily used to perform what will be a challenging in-fill solution. The latter if in the form of FTTP (in the form of a few pole mounted manifolds)would best supported by some demand aggregation with a higher connection cost.

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