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UK Gov Reject Openreach Proposed Fix for Part Built Fibre in Wales

Tuesday, February 26th, 2019 (9:05 am) - Score 3,050

The UK Government appears to have rejected a £12.9m accelerated gainshare proposal from Openreach (BT), which was first proposed last year (here) as a possible solution to help complete a number of unfinished (part-built) “fibre broadband” (FTTC and FTTP) deployments in Wales.

Sadly a fair few FTTC/P deployments under the original contract were left unfinished when Phase 1 of the Welsh Government’s (WG) state aid supported Superfast Cymru scheme came to an end last year. Since then a £22.5m Phase 2 successor contract has been agreed with BT, which aims to provide an additional 26,000 premises with access to “fast reliable broadband” (mostly via ultrafast “full fibreFTTP) by March 2021 (details).

A spokesperson for the Welsh Government has previously informed ISPreview.co.uk that any partially built deployments would not form part of the 26,000 premises announced for Phase 2 so far as these remain a “matter for Openreach and have not been paid for by the Welsh Government.

However toward the end of 2018 Julie James AM revealed that the WG had received a proposal from Openreach as part of an £12.9maccelerated gainshare arrangement agreed between the UK Government and the European Commission.” Under that arrangement, Openreach would be able to complete part built structures not completed and not paid for under Superfast Cymru.

Several months have now passed and Russell George AM recently requested an update (credits to Steve for spotting). The bad news is that Openreach’s proposal has been rejected by the UK’s Government’s Department for Digital, Culture, Media & Sport (DCMS), but it’s not the end of the road.

Lee Waters AM, Deputy Minister for Economy and Transport, said:

“The accelerated gainshare proposal to complete FTTC structures cannot progress following a UK Government decision not to provide National Competency Centre assurance for further FTTC solutions.

The funding earmarked for accelerated gainshare remains available for investment in broadband and those premises potentially covered by the proposal will now be considered through the successor programme.

Stranded assets remain a commercial matter for Openreach. No public funding has been invested in these structures.”

We have asked DCMS to clarify its decision and will report back once they respond. In the meantime the response suggests that the WG may still be able to find a solution using the same gainshare investment, although there’s no escaping the fact that this puts related areas back into a state of uncertain limbo.

The conflicting language of, on the one hand, saying that stranded assets are a commercial matter for Openreach while, on the other hand, saying that such premises might still be covered through the state aid supported successor programme does little to aid clarity over the situation. We also note the specific reference to FTTC above, not least because a number of the part built areas were seemingly due to get FTTP.

In any case those people living in such locations now seem unlikely to benefit from a quick fix and will thus have to wait even longer for a solid solution.

NOTE: Gainshare (clawback) is public funding that can be returned and reinvested to expand broadband coverage as take-up of the new FTTC/P service rises.

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Mark Jackson
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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14 Responses
  1. Avatar Michael V says:

    That is really really bad.

  2. Avatar Jim Weir says:

    Surely this is as simple as the Openreach proposal incorporated some FTTC and some FTTP, therefore the whole proposal is rejected by BDUK NCC.

    Surely Openreach will provide a revised proposal for Gainshare which if it incorporates any stranded FTTP assets then they would be reused and claimed for any additional works.

    1. Avatar Mike Kiely says:

      I think you(we) may have missed a change in direction.

      The proposed B-USO now means GOV can take all the clawback to central coffers, local or national.

      The 10Mbps floor can also become an inadvertent ceiling paid for by BT and industry.

      We are also ignoring the lack of information on BT capital contribution to this project and the reconciliation of unit costs of £300 per premise passed against actual costs. None of this has been published.

      This was BT saying, we will use the money we owe you to complete the work we will then invoice you. This is likely to still happen in the new contracts.

    2. Avatar Jim Weir says:

      @Mike

      Where is the suggestion that HMG will recover the clawback in BDUK contracts and not use this for re investment in Broadband??

      The only change in policy direction is a conscious choice to no longer approve FTTC for BDUK projects – that is a good change in direction as it ensures that more BDUK work including the current procurement pipeline and Gainshare spend is on FTTP.

      I’m not engaging on your BT Capital recurring theme. Sorry

    3. Avatar NGA for all says:

      It is an implication of the 12 month clause in the B-USO order.

    4. Avatar TheFacts says:

      @NGA – it would help if you could provide the text.

    5. Avatar TheFacts says:

      Broadband universal service: specification
      1. Subject to paragraph 2, affordable broadband connections and services must be provided throughout the United Kingdom with all the following characteristics—

      (a)a download sync speed of at least 10 megabits per second;
      (b)an upload sync speed of at least 1 megabit per second;
      (c)a contention ratio of no higher than 50:1;
      (d)latency which is capable of allowing the end-user to make and receive voice calls over the connection effectively;
      (e)the capability to allow data usage of at least 100 gigabytes per month.
      Broadband universal service: eligibility
      2. Paragraph 1 only applies to the extent that all the following conditions are met—

      (a)the broadband connection is to a fixed location which is a residence or place of business;
      (b)a prospective end-user requests that a broadband connection is provided to that location;
      (c)a broadband connection and service with all the characteristics specified in paragraph 1—
      (i)is not available to that location; and
      (ii)will not be made available to that location through a publicly-funded intervention within the period of one year beginning with the date on which the request is made;
      (d)provision of the broadband connection—
      (i)will cost no more than £3,400; or
      (ii)will cost more than £3,400, but any costs in excess of £3,400 will be paid by the end-user.

    6. Avatar NGA for all says:

      Facts, thanks, Para 2, item ii – one year, although many English counties have stopped already. It is a real kick in the teeth for rural given the commitments Gov and BT made to go as far as possible and given the monies available to finish the job.

      BT’s community efforts do not seem linked to the effort of re-using the monies they owe, whether clawback or underspends or capital owed where that is a factor. I have put a blog on linked in on the matter.

    7. Avatar CarlT says:

      I’m deeply moved for rural areas, Mike.

      Not exactly a barrel of laughs for those outside those areas having to pay more to operators to offset higher costs in rural and subsidise via taxes deployment of superior services to those they themselves are receiving.

  3. Avatar Matthew Williams says:

    Good thing for the government to say any new contracts should really focus on FTTP now enough money has gone to FTTC which even the government now. I know the money wasn’t there at time to deliver FTTP. but seeing as USO is going to come into force next year surely any new funding should be future proof.

  4. Avatar UKSuperfast says:

    Sharp move by Superfast Wales? Perhaps not. ‘In-complete network, timelines expired’ leaves network un-claimable on public funding. Openreach might re-negotiate, complete at cost or leave unfinished? Wales assumes they ‘complete, rather than lost cost’? But the areas were defined as ‘not viable’ and the strategy is risky at best. Any business would de-prioritise loss making areas? They will certainly ‘cost in’ future risks?

  5. Avatar Simon says:

    I’m one of those people, for three years we were told on the Openreach website that we were getting fttp and December 2017 it showed the stage right before connecting and the December the 14th checked again and told we had to community fund it if we wanted it, and we are 6 houses left out of an entire role out for a village

    1. Avatar Matthew Williams says:

      If it’s already in your village and your not to far away i can’t imagine they would want that much to connect you.

  6. Avatar Matt says:

    I’m in none of those areas. Reams of fibre cable wrapped around poles. Fibre already deployed along the roads. Ports installed on poles. Been like that for 2.5 years… ADSL max speed is 3Mb. I sometimes work at home moving large files around and cannot cope with this so ordered FTTPoD. Will be interesting to see how much this costs as the underlying infrastructure is already there.

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