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North Skye Broadband Abandons FTTP Rollout Project Due to R100

Thursday, February 1st, 2018 (3:33 pm) - Score 2,327

The North Skye Broadband project, which had been hoping to secure state aid in order to help fund a pilot rollout of FTTP ultrafast broadband to hundreds of rural premises on the Isle of Skye (North side) in Scotland, has reluctantly abandoned its plan due to the R100 procurement process.

The Scottish Government recently committed £600 million of public investment (here and here) to make “superfast broadband” (30Mbps+) capable networks available to 100% of Scotland by the end of 2021 (March 2022 when viewing as a financial year); often referenced as the R100 programme.

At the end of last week the R100 strategy also resulted in the alternative support scheme for rural areas (Community Broadband Scotland) being stopped (here), which makes sense since had it continued then there would have been a heightened risk of duplicating the investment in certain areas.

The NSB project was one of those that aimed to harness over £1.2m of public investment via CBS. Unfortunately they abandoned this plan last year after complaining that their efforts had become “dogged by delays due to complex public procurement requirements” (here). At the suggestion of CBS, NSB instead decided to proceed with a pilot project to serve around 50 premises in the Glendale area of North Skye, funded by CBS with de minimis funding of €200,000.

Initially the new pilot faced “significant challenges“, including the lack of adequate back-haul from the Dunvegan BT exchange, and the costs of laying fibre from Dunvegan to the first premises served. Thankfully both of these were recently said to have been “successfully addressed“. An update on progress with the pilot was sent to CBS and Highlands and Islands Enterprise (HIE) on 16th January 2018 but the reply was not as expected.

CBS/HIE Response to NSB

Scottish Government is committed to broadband infrastructure delivery through its R100 programme. As a result of state aid requirements, it is not possible to publicly fund any project outwith this programme. The procurement has started and companies are preparing tenders based on the intervention area. Until this procurement process is concluded and the potential extent of deployment from this initial procurement is confirmed, it is not possible to publicly fund any broadband infrastructure project.”

The response would appear to contradict what HIE said last week when they suggested that CBS’s existing projects would continue to be delivered and supported, although admittedly the language used was somewhat vague and may not have applied to projects in the same position as NSB. Nevertheless the result is that NSB now has insufficient funds to continue in any meaningful way.

NSB Statement to ISPreview.co.uk:

The CBS response gives no indication of any date when an application for de minimis funding to deliver the pilot project might be considered. Funding for planning and development of project work to deliver ultrafast FTTP broadband for North Skye was granted by HIE in late 2015 for 12 months but no further funding was made available, despite a request for this in early 2017. Consequently NSB now has insufficient funds to continue in any meaningful way.

As has been made clear by NSB, the R100 programme – being based on the National Broadband Scheme 2016 – is designed solely to provide public funds to subsidise private sector investment in telecommunications networks. It does not provide, and never has provided, funding for community-operated networks, where the business case for rural broadband is fragile, and the profit element required by private sector operators is sufficient to make that business case unviable. Hence, R100 is unlikely to deliver ultrafast broadband to anyone, aiming only to deliver superfast broadband using VDSL2 and, if requested, by offering vouchers for satellite connections.

At £3894 per premise, the R100 funding for the Highlands in Lot 1 of the ITT is on a par with NSB’s expected FTTP costs: in previous negotiations with CBS, NSB was told that a similar level of grant for its original project (~800 premises) was not viable. It is somewhat galling to see that amount now being offered as a substantial subsidy to privately owned “for profit” companies, when NSB – a community benefit society – is forbidden by the terms of the R100 procurement from even applying.

The CBS scheme was far from perfect and a number of community projects (not only NSB) found it both slow and difficult to harness, some of which is necessary because community schemes in rural areas tend to carry much bigger financial risks and thus political risks (example). This is particularly true for FTTP/H style deployments that tend to be significantly more expensive and carry the highest risk.

We have however seen a number of community FTTP/H schemes succeed elsewhere in the UK, although many of the most successful (e.g. B4RN) have done so by securing enough funding from local residents and businesses to begin their deployments, without initial recourse to state aid.

The onus is now on the Scottish Government to show that R100 can deliver something worthwhile for remote communities.

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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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4 Responses
  1. Thanks for carrying the story. B4RN, whose model NSB tried to replicate as closely as possible, had the advantage of huge backhaul capacity on the edge of its coverage area, from dark fibre laid along the M6 corridor, along the route of a major Transco gas pipeline. Conversely, despite State Aid to finance the BT-HIE Seg1.15 cable from Dunvegan to Carnan in South Uist (on the Western Isles) using fibre running through Dunvegan, BT saved costs by not installing NGA aggregation nodes at the VDSL cabinets on Dunvegan, or at the exchange, so only 400Mbps of backhaul was available to NSB, 200m from the exchange, and even then only with ECCs of £29,000. So trying to build anything without any initial subsidy for fifty premises up to six miles away just wasn’t on the radar screen.

  2. craski says:

    I admire the aspiration of R100 but remain sceptical it can achieve its target. I fear we will see a return to these projects in 2021/2022 when it becomes obvious R100 still wont guarantee you’ll get help having waited yet another ~4 years. Can you imagine waiting another 4 years then being offered a voucher to install a satellite system …

    IMO £29k split 50 ways doesn’t sound that bad cost wise and I’m sure there are lots of areas successfully running 50 premises on far less backhaul. You might not all be to stream 4k at the same time but I don’t personally think that should be a must have requirement in the short to medium term.

  3. Jake says:

    But Sturgeon has PROMISED 100% Scots Superfast Broadband… So what now?

    This is a real shame to see a project collapse. I feel sorry for the residents.

    Rather than an over-ambitious expensive fibre project would it not be more economical to ‘temporarily’ go for a Fixed Wireless Access system (this year) to provide instant rollout and pleasing the residents much sooner…

    And THEN the project could deploy fibre wherever they find the most concentrated uptake of the wireless service.

    Does this not essentially guarantee the best possible investment of public funds?

  4. Cecil Ward says:

    Once again, as a general point I think no public money should be put into schemes that do not offer wholesale access. Users deserve a choice of ISP wherever they live. Some users are business users, albeit small businesses, not everyone is a domestic user, incredible to the politicians I know. Creating monopolies with public money is not cool at all. [Cracked record apology, sincerely. But I’m just hoping there is chance that someone who exercises power over our lives might read this.]

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