Kent UK Plan Vouchers and £4.5m BT Deal to Help Rural Broadband

The Kent County Council has unveiled how it will aim to improve local coverage of fixed line “superfast broadband” (24Mbps+) networks beyond the current 95%, which will involve a £4.545m (gainshare) extension of the existing BT (Openreach) contract and a new ‘Kent Voucher Scheme’.

At present the existing Phase 1 and Phase 2 project, which has been jointly supported by the local authority, BT and the government’s Broadband Delivery UK programme, have already succeeded in extending the local coverage of superfast broadband to 95% of homes and businesses by the end of 2017. On top of that it’s expected that this could creep up to 95.7% by the end of 2018.

Overall an additional 135,000 premises have benefited from the state aid supported deployment of FTTC broadband networks. Unfortunately it’s also estimated that completion of the existing Phase 2 deployment contract will leave 31,800 properties without access to superfast speeds and 1,550 may even suffer download speeds below 2Mbps.

Solving the Final 5% in Kent UK

We don’t tend to hear much from the Making Kent Quicker programme when it comes to future broadband strategy but all that changed this week when the local council held a crucial meeting. This proposed to extend their existing BDUK Phase 2 contract with BT via gainshare funding and launch a new voucher scheme to help tackle the final 5%.

The BDUK Phase 1 infrastructure build was completed in March 2016 and take-up is currently at 51%. This means that KCC has the opportunity to reinvest £4.545 million of gainshare funding (clawback of public funding from BT due to high take-up) and extend the current Phase 2 contract to deliver more “superfast” coverage (BT is currently said to be modelling what impact this might have).

However, given the costs of working in the final 5%, KCC are estimating that the average subsidy will be in the region of £1,300 per property (compared to £146 for Phase 1 and £608 [to date] for Phase 2). A quick bit of math suggests that if no additional funding is found then this might benefit roughly 3,500 additional premises but it will probably go further (not much of a dent in that 31,800 above).

Nevertheless an extension of Kent’s existing contract with BT is their preferred option as not doing so would have required £2.495m of gainshare to be returned to BDUK. Alternatively if they ran a new procurement then that could have taken 12-18 months to complete and KCC would not be contractually entitled to access the funding until 2022 (reinvesting through the existing Phase 2 contract gets around this problem).

Separately KCC has also proposed to launch the Kent Voucher Scheme, which will be funded from existing budget allocations for the KCC. Initially £1 million will be committed to this and if all goes well then an additional £1.8 million could be added at a later date (total of £2.8 million).

The scheme will aim to offer homes and businesses in final 5% areas (i.e. those that remain outside the scope of the extended BDUK Phase 2 scheme) a voucher worth up to £1,700 per property towards the costs of installing a superfast broadband connection (voucher applications will be open to properties currently receiving less than 24Mbps).

KCC Vouchers Description

Eligible homes and businesses will need to apply for the voucher which can be redeemed against a list of registered suppliers. There will also be an opportunity for applicants to aggregate their vouchers into group schemes.

The value of the maximum voucher award (£1,700) has been based upon the maximum subsidy per property that is allowed under the current BDUK Phase 2 contract. We have been contacted by a number of residents and businesses who are outside the scope of current BDUK contract and who are trying to develop and fundraise for their own community solutions.

It is anticipated that the Kent Voucher Scheme will be able to make a substantial contribution towards the costs of these solutions and encourage similar initiatives to come forward.

The new scheme will be designed to complement the government’s new Gigabit Broadband Voucher Scheme (up to £3,000 per application), which is targeted more at businesses and Gigabit capable “full fibre” (FTTP/H) connectivity. However residents can also access vouchers of up to £500 if they are part of a group scheme where at least half of the funding is awarded to businesses.

KCC notes that “there are opportunities to combine this scheme with the Kent Voucher Scheme to improve its accessibility to Kent businesses in final 5% locations.” In theory this could make it possible for SMEs in even more remote locations to access services that would still be too expensive under the GBVS subsidy alone.

As it stands KCC appears to be proceeding with both the proposed BT extension deal and the voucher scheme. Under the current plan we expect further details and a tentative rollout strategy to be confirmed sometime this summer 2018. Despite all this we believe that it will take a fair bit more funding to reach universal coverage in Kent and future plans beyond this may be affected by Ofcom’s final design for the 10Mbps USO.

NOTE: Superfast speeds are not an automatic upgrade. You need to order the service from an ISP in order to benefit.