Welsh Government Update on BT Rollout of Superfast Broadband

The Welsh Government has issued a progress update on their existing Superfast Cymru project with Openreach (BT), which suggests that BT has delivered a “significantly larger volume” of premises than either party anticipated at the outset but some areas are still causing problems.

The original contract, which is slowly coming to an end, was supported by a public investment of £225 million and has already helped to spread 30Mbps+ capable fixed line “superfast broadband” (predominantly FTTC / VDSL2 and a little FTTP) services to cover around 95% of homes and businesses across Wales.

Going forward the above scheme is expected to be superseded by a new project to tackle the remaining 80,000+ premises in the final 5% (here), which aspires to make “fast reliable broadband” (defined as 30Mbps+) available to “every property” in Wales (the potential value of this project is up to £200m, of which £62.5m has already been confirmed) but today we’re primarily looking at the original contract.

In keeping with that Thinkbroadband has spotted this update (posted 17:45:38) from Julie James AM, Leader of the House and Chief Whip. Julie confirms that the delivery phase of Superfast Cymru closed in February 2018, and, since then, they’ve been working to resolve “three outstanding issues“.

The Three Outstanding Issues

* Firstly, we have been considering whether the Welsh Government can work with BT to complete structures part-deployed by BT during the Superfast Cymru delivery phase. Such structures have caused frustration for consumers reporting that they can see fibre coiled on poles, yet they have seemingly no realistic prospect of receiving a fibre service. We expect to conclude this process at the end of May.

* Secondly, we have been revisiting with BT all of the claim packs submitted by them over the past five years to cleanse the data and confirm the final premises given access to 30 Mbps services as a result of our market intervention. While I am not in a position to confirm the figure today, I can confirm that, in fulfilling its obligations under the grant agreement, BT has delivered a significantly larger volume of premises than either party anticipated at the outset of this project.

* Finally, we have been establishing the processes and resources required to support the complex defrayment exercise that will confirm the final eligible expenditure under the grant agreement. To date, we have paid BT £300 for every premises, however, the closure of the delivery phase means that we must now work together to balance the books and ensure that all expenditure is eligible and fully evidenced. This process will take several months to conclude, but it is essential to ensure that BT does not benefit from any oversubsidy.

The fact that the project has delivered a much larger volume of premises than expected is good news, albeit something we’ve heard before and seen in a few other Broadband Delivery UK contracts. The additional checking that occurs at the end of related contracts is also somewhat par for the course. But the most interesting bit of news is that all those previously reported problems with unfinished deployments finally look set to be resolved.

Julie James said:

“We’re also revisiting, as I said in my statement, all of the claims packages made over the last five years, and we’re doing that partly as a result of my tour around Wales and meeting with various communities where it’s been obvious to me that places we thought were connected have not actually been connected.

We’re having a complicated conversation with BT around the connection of the stranded assets. There is a complex commercial negotiation — ‘negotiation’ is the only word I can think of — going on about who should pay for them. So, BT have sunk an enormous amount of capital into the ground. They haven’t got a penny from us for that, because they’ve over-bulked the programme. The conversation is: who should pay for the last bit of the connection?

That’s a complex commercial conversation that is ongoing, and, as soon as we’ve reached the end of it, I’m more than happy to report it here in the Chamber. But I make no apology for the fact that, obviously, what I want to get out of it is the maximum number of premises for the least cost. So, quite clearly, where we’re coming from is we want as many of those assets connected as possible for as little part of the gainshare as is humanly possible.”

Julie also reported that the tender exercise for their successor project was ongoing and expected to conclude in June 2018. “I aim to announce the successful bidders before the summer recess, with deployment work commencing as swiftly as possible after that … the premises remaining will be significantly more expensive to address,” said the AM in reference to the increased focus on remote and expensive to tackle rural areas.

On top of that Julie noted that they have “constructed the current procurement to favour full fibre [FTTP/H] services so that we can encourage even greater full fibre penetration where we are investing public funding. Despite a commitment to invest more than £90 million, I am convinced that even this level of funding will not reach all remaining premises.” We’d agree.

Finally, Julie noted that they’re “making steady progress” in delivering the mobile action plan to help improve 4G coverage. The consultation on ‘Planning Policy Wales’ is due to end this week and “this will be followed very shortly by a consultation on new permitted developments rights, including changes to those for mobile phone infrastructure.” Plus they’re currently reviewing feedback from some of their other suggestions (e.g. a reduction on non-domestic rates for new mobile masts).