BT’s UK Community Fibre Broadband Partnerships Benefit from Cost Drop

Openreach (BT) has confirmed to ISPreview.co.uk that over the past few weeks the cost estimates given out for their co-funded Community Fibre Partnerships, which work with local groups in order to deliver faster FTTC or FTTP broadband into poorly served areas, have been reduced.

At the start of this year BT revealed that the scheme had managed to contract its 200th community using the partnership approach, with some 20,000+ premises across the United Kingdom already benefiting and future contracts will see this rise further to 40,000+.

The programme itself focuses on communities in the final 5% or so of the United Kingdom, specifically those that have yet to benefit from a faster “fibre broadband” service (urban or rural). The setup is based around a joint funding arrangement, where BT covers the costs in line with their commercial model and the community self-funds the remaining gap.

Communities can sometimes also make use of government grants / vouchers (e.g. the Better Broadband Subsidy Scheme) in order to help bring down the cost. BT itself also offers grants worth up to £20,000 to help, although they only do that for areas where the new technology would benefit a “local school or similar organisation.”

At this point we should say that it’s not uncommon for BT to change their cost model for individual projects during negotiations and as circumstances change. For example, the Cheshire village of Ollerton was initially quoted £50,000 for the upgrade work (i.e. £50,000 from locals and £50,000 from Openreach). However further modelling done by the local council and Openreach, as well as the fact that they were able to find a legitimate way to remove the VAT, meant that the final bill dropped from £50k to £20k.

The good news for related communities is that Openreach has over the past few weeks “revised” their overall “payback assumptions” for “all community fibre partnerships“, which we understand in many cases has resulted in the gap to fund benefiting from a significant cost reduction.

One of the most recent examples of this is the crowd-funded project to expand “fibre broadband” to Truman, Hop House, Maltings Park and the Heathlands primary school in the large rural Essex (England) “village” of West Bergholt near Colchester, which is home to around 3,400+ people and 1,400 homes.

Openreach had quoted a resident of the Maltings Park Estate £14,883 to upgrade two street cabinets with FTTC (only partial coverage of the village), although this was running a bit short of achieving the goal. Happily, with only a few hours left on the clock, the target was dropped to £11,783 and somebody made an anonymous donation of £692 to help achieve it. Good news, at least for part of the village.

Similar revisions to Openreach’s overall payback assumptions have occurred in the recent past, usually after their take-up measure has been tweaked (i.e. the fibre roll-out has seen higher take-up than initially predicted), although on this occasion the operator was only able to inform us that it was due to a “commercial decision.”

At this stage we only have a small number of examples but anything that brings the cost to communities down is a good thing.

Some Context for West Bergholt

At this point it’s necessary to give our specific example of West Bergholt some additional context because there’s a secondary story underneath. Over the past two years the village has seen a fair bit of interest, with Virgin Media deploying FTTP in some parts since January 2017 and County Broadband proposing something similar (here).

Separately Openreach had initially quoted £114,544 inc. VAT to do the whole village (early 2016) via four new street cabinets (PCP1, 2, 6, 7 and Exchange Only cable serving Fordham Maltings Park Road), which was based on an old take-up measure. After a revision this was later reduced to £50k, although at the time many in the local council / community did not appear to be too interested and rejected Openreach’s slower FTTC plan in favour of County Broadband’s proposal.

Meanwhile County Broadband has been collecting interest and the most recent March 2017 update suggested that they still intend to deploy their FTTP network in the village.

Community Update

On 24th February [2017] County Broadband wrote to all the Households and Businesses who have signed up for their Fibre to the Home service, announcing that work will start on the provisioning from the end of April. They have appointed not one but two civil engineering contractors to speed up the work when it starts, to still aim to complete the provision of service by the end of the Calendar Year as originally planned.

It’s unclear whether this plan will now be impacted by the separate crowd-funded campaign with Openreach, which might require County Broadband to revise some of their own assumptions. Mind you Openreach has a tendency to take a long time with their deployments and so there may still be room for County Broadband to get in before the new FTTC cabinets go live.