No Solution Yet for Gigaclear’s FTTP Rollout in Devon and Somerset

The Connecting Devon and Somerset (CDS) project and UK ISP Gigaclear have issued a new joint statement, which states that the provider has yet to “demonstrate a credible approach” for each area in their revised roll-out plan. As a result their state aid supported deployment of 1Gbps FTTP broadband remains on hold.

At present the CDS project is working with Openreach (BT), Gigaclear and wireless ISP Airband to extend the reach of “superfast broadband” (30Mbps+) connectivity the two rural counties and overall they aimed to cover 96% of premises by 2020 (currently around 86%). A mix of FTTC, FTTP “full fibre” and wireless based broadband technologies are being used (see here and here).

Unfortunately it was last month revealed (here) that Gigaclear’s part of this project (i.e. a roll-out of “full fibre” to cover nearly 50,000 premises) had fallen “significantly behind schedule” (around 2 years by the looks of it) due to “fundamental issues … including management of subcontractors, build methodology and capacity within the team.” In response the ISP promised to produce a new roll-out plan and to resolve the problems.

Reasons for the Delays (CDS)

There are five main reasons for Gigaclear’s delayed roll-out in the CDS programme, exposed by the collapse of Carillion telent:

• Poor operational capacity and decision-making within Gigaclear.
• Lack of contractor capacity
• Slow deployment by contractors.
• Lack of detailed planning.
• Failure to redesign the build methodology.

One month has now passed and the CDS team recently received a copy of the provider’s new plan, but they are far from satisfied. According to the latest statement from CDS, Gigaclear has “not yet provided enough detail and clarity for each Lot area to demonstrate a credible approach” and they are thus continuing to “withhold payment” (i.e. the ISP remains on notice of default while more work is undertaken to fully develop a final plan).

We’ve posted a summary of the latest statement below, which focuses upon on what has happened since the announcement of a significant delay and what needs to happen next in order for the project to continue.

CDS & Gigaclear Statement (Extract)

On October 31st Gigaclear presented CDS officers and BDUK with a broad plan on how the company can address its shortcomings and provide a firm completion date for 100% coverage against its contract.

Gigaclear advanced the view that progress is being made in addressing the need for improved capacity and resources. The company proposed a new build methodology that it believes will provide a robust plan whilst reducing traffic disruption to Devon and Somerset communities.

In broad terms, and based on the above, Gigaclear has proposed the following:

• A commitment to continuing its investment of £127.8 million in the CDS region. This comprises £60.5 million in the CDS contracts and £67.3 million in the company’s commercial build. NB The total public subsidy is £31 million of which only £537,200 has been paid to Gigaclear to date.

• It will continue to provide full fibre-to-the-premise technology.

• There will be no reduction in the broadband speed made available to homes and businesses. Gigaclear is contracted to deliver superfast broadband of at least 30mbps download. The company says its service can deliver symmetrical ultrafast speeds up to 900mbps.

• It will continue to deliver the full coverage agreed in the contracts with CDS. That is 47,810 homes and businesses across the region. • There will be no reduction in the company’s commercially-funded network. That is around 43,000 homes and businesses in the region.

• The proposed build methodology is based on “a spine and spurs” approach that will reduce disruption to communities and deliver superfast broadband access to between 40% and 50% of the CDS contracted premises by June 2020 with the remaining coverage completed by June 2022.

However, the company has not yet provided enough detail and clarity for each Lot area to demonstrate a credible approach is in place. Whilst coverage and a full fibre solution remain firm commitments, the proposal indicates significant delays will be felt across the CDS region.

CDS therefore continues to withhold payment to Gigaclear and the company remains on notice of default while more work is undertaken to fully develop a final set of plans. Gigaclear and CDS are maintaining a dialogue and are committed to work as quickly as possible to get the best outcome for residents and businesses.

A key issue to address will be whether the Government and other partners are willing to extend the time in which their funding can be used to subsidise the current contracts with Gigaclear. Currently, Government funding must be spent by March 2020. If the deadline cannot be extended it is unlikely the current contracts with Gigaclear will continue.

CDS is continuing to explore with BDUK the potential for finding a solution to this issue. Similar discussions may also be required with the Heart of the South West LEP, which is being kept informed of developments, and other funders.

In the meantime, CDS and Gigaclear will continue to meet in an effort to make progress on the required level of detail and clarity for each Lot area. When this work is completed CDS and BDUK will need to consider the remedial plans in detail.

Separately CDS said they were also working with Openreach (BT) to extend superfast broadband coverage to those areas not included within current publicly-subsidised or commercially-funded roll-out plans. “This extension of broadband coverage will be financed by a £4.7m investment, the first of a series of repayments from BT [phase 1 clawback / gainshare],” said the CDS team.

Apparently the plan for Openreach’s extension will be announced sometime in the New Year and options are also being considered to increase the level of funding, which could support an even larger extension. Meanwhile Gigaclear said they would focus on “making good its current commitments to CDS before bidding for further new BDUK contract areas, though the company and its backers reserve the right to do so” (this might rule them out of the Scotland R100 contract).