UPDATE BDUK Wireless Broadband Pilot in Odd BT Overbuilding Spat

The £1.56m state aid supported Broadband Delivery UK pilot of a new superfast fixed wireless broadband network, which was built by Airwave in North Yorkshire (England), appears to have run into an overbuilding conflict with BT’s (Openreach) roll-out of FTTC based “fibre broadband” services.

Normally such conflicts arise between commercial or community focused operators and BT’s state aid supported roll-out, but in this case it’s a more unusual dispute because both networks have been built with public funding from the Government’s same Broadband Delivery UK pot.

Airwave (via Boundless) initially built their network around the rural Esk Valley and Upper Dales areas of North Yorkshire (details), which was designed to test point-to-multipoint broadband fixed wireless access at 2.4GHz or 5.8GHz, WiFi at 2.4GHz, LTE (4G) small cells and TV white space technology (the latter was found not to be viable).

Overall 372 premises were cleared for state aid in the intervention area and Airwave expected to cover about 270 (72% of the intervention area) of those with their wireless service. A useful summary of the deployment can be read here, which notes that the point-to-multipoint network managed to deliver speeds of 50Mbps+ to 124 of the premises.

However Thinkbroadband reports that Openreach has now built the base for a new FTTC (VDSL2) cabinet just to the east of West Witton, which appears to cater for premises within Airwave’s territory.

John Loader, Local Resident of West Witton, said:

“West Witton in Wenlseydale North Yorkshire suffered from poor to very poor (0.75Mb/s) broadband speeds being too far from its fibre cabinet to gain any advantage of FTTC. At the end of 2015 a BDUK funded trial of microwave to the premises opened giving up to 30Mb/s availability to the whole village. Residents were offered service at full commercial rates and less than a year later around 33% of premises in the village are connected at 10, 20 or 30Mbps as they require with many leaving BT altogether using VoIP.

But construction by BT the edge of the village reveals that the BDUK money spent on the excellent microwave may be thrown away as BDUK is now funding a rival system for the village by subsidising BT to rearrange its network. meanwhile in the Parish we have a hamlet that still has slow speeds and will gain zero benefit from this expense as they are connected to a different exchange.”

Part of the blame for this appears to have been caused by the local authority’s recent Open Market Review (OMR), which didn’t de-scope the village from their plans. In fairness this is hardly a surprise as the pilot was only completed earlier this year, although in theory the council could still have acted via common sense and of course BDUK should have been aware (local authorities can make decisions outside of an OMR, if they really want).

On the other hand the pilots were not funded with state aid to run indefinitely (it’s a matter for each operator as to whether they can retain the network), while BT’s deployment is designed to be a permanent solution. The flip side of this argument is that the economic case for maintaining the pilot could be weakened by BT’s rival roll-out.

We are reaching out to BT and the local authority for a comment.

UPDATE 12th October 2016 (8:04am)

An Executive Member of North Yorkshire County Council, Don Mackenzie, has kindly provided us with a rundown of events to help explain the reason for the situation. This confirms that the problem began because Airwave did not initially intend “to retain a commercial service in North Yorkshire.”

In response the Superfast North Yorkshire project reached an agreement with BT in December 2015 to provide an additional 4,620 NGA premises at no cost, which included an upgrade of the cabinet in West Witton covering 184 premises.

However since all this happened it has emerged that Boundless are now in negotiations with Airwave to acquire the (subsidised) MTP Airwave assets and continue to operate in West Witton commercially. On the upside, West Witton might soon become one of the few rural communities with two NGA broadband networks.

Don Mackenzie said:

1. West Witton has 182 premises that historically were very poorly served with broadband, with most premises receiving less than 2Mbps.

2. West Witton was not included in the original c11,000 premises of Phase 2.

3. With the establishment of the BDUK Airwave Market Test Pilot (MTP) in June 2014, West Witton was chosen as one of the intervention communities for the MTP. The contract between Airwave and BDUK provided no guarantee of continuity of service beyond 31 March 2016.

4. This MTP suffered significant delay and uncertainty with the first Airwave customer supplied by Boundless as a retail service provider installed in October 2015.

5. Motorola announced an agreement to acquire Airwave in December 2016.

6. After a significant amount of chasing by SFNY, Airwave finally confirmed to SFNY on 28 January 2016 that Airwave will not be responding to the Open Market Review and Public Consultation, on the basis that they have no plans to retain a commercial service in North Yorkshire. In February 2016, Airwave flagged the potential issue that Motorola were unlikely to see broadband as a core line of business and will focus on mission critical service provision to ‘blue light’ organisations.

7. SFNY reached agreement with BT in December 2015 to provide an additional 4,620 NGA premises at no cost, to ensure BT met a contractual obligation to move c3,000 premises from below 2Mbps to above 2Mbps. In return SFNY agreed to extend the Phase 2 Longstop Date to July 2017 (Phase 2a)

8. In March 2016, BT provided a list of the 4,620 premises that were planned for Phase 2a. The list included an upgrade of the cabinet in West Witton covering 184 premises with 179 at NGA (and 5 with improved speeds). SFNY contrasted this with the contracted Airwave coverage of identical postcodes that indicated that Airwave would serve 164 premises with 18 premises unable to receive a service due to line of sight issues. The difference of 2 premises can be accounted due to the vagaries of geographical data systems.

9. The decision that needed to be made in March 2016 was whether SFNY should remove the West Witton cabinet from Phase 2a, and leave 18 premises without NGA service and accept the risk that the Airwave service may not be commercially sustainable on expiry of the BDUK MTP contract on 31 March 2016. Given that the 4,620 premises were negotiated at no cost to SFNY, the option of BT swapping West Witton for another community was not available to SFNY. West Witton was scheduled to be built in autumn 2016.

10. SFNY consulted with BDUK and the NYnet 100/SFNY Governance Boards in March 2016 on the issue. BDUK saw no State aid issues and accepted that the decision should be one made within North Yorkshire. Both Boards were of the view that the risk of the Airwave network being unsustainable, with the consequential impact on the residents of West Witton, was too high for BT to be instructed to remove West Witton from Phase 2a. Even if the fears of commercial failure subsequently proved unfounded, then the fact that the 18 premises who were left unserved by Airwave would be lifted from sub 2Mbps to NGA, at no extra cost to the public purse, mitigated the impact of overspill onto Airwave premises resultant from the cabinet upgrade.

11. The current situation is that Boundless are in negotiations with Airwave to acquire the (subsidised) MTP Airwave assets and continue to operate in West Witton commercially. The issue is that a claim of ‘double subsidy’ and ‘unfair competition by BT’ will go out, which for the reasons outlined above, is simply untrue. The reality is that residents of West Witton are now in the almost unique situation of living in a deeply rural location with two NGA infrastructure providers offering multiple competitive retail services. Elsewhere in North Yorkshire, this degree of competition is only available in central parts of Harrogate and Knaresborough.

Meanwhile SFNY are currently approaching the end of their Phase 2 roll-out, and at the moment going through a procurement process for Phase 3. By the end of Phase 2 (June 2017) they will have connected up about 91% of premises (pretty good for such a large geographic county with c.600,000 total premises). Phase 3, valued at £20.5m, of which NYCC will provide £12.5m, should then take the coverage to around 96% by 2019. They are looking at various options to reach full provision.