Concerns Over Delay to Award of Scotland’s R100 Broadband Contract UPDATE

The Scottish Government (SG) has been heavily criticised by an opposition Conservative MP, John Lamont, after it confirmed that the bidding process for their £600m R100 (Reaching 100%) programme was still ongoing and that contracts would now be vaguely awarded some time “during 2019.”

At present around 94% of premises in Scotland can access a “superfast broadband” (24Mbps+) ISP network if they so desire and the existing £400m+ Digital Scotland (DSSB) project with BT (Openreach), which has been rolling out FTTC and a little FTTP technology for the past few years, is set to continue some of its work until September 2019. This may well end up leaving a c.5% gap left to fix.

In response to that the Scottish Government have been busy developing the new R100 follow-on programme, which raises the definition of “superfast” to 30Mbps+ and originally aimed to achieve universal coverage of that by the end of 2021; or March 2022 as a financial year (here and here).

The proposed investment was aimed at prioritising superfast connections to as many as possible of the estimated 147,000 rural premises not currently receiving at least 24Mbps. Under the original plan we expected the first contract(s) to be awarded by the end of 2018, but this was later delayed and we were expecting the final bids for R100 to be submitted in January 2019, followed by a contract award in March 2019.

So far nothing has been announced and John Lamont MP has been trying to find out why for the past month. The reply finally came this week, albeit wrapped in some degree of ambiguity.

Paul Wheelhouse, Scottish Minister for Connectivity, said:

“Thank you for your letter of 19 February 2019 to the First Minister Nicola Sturgeon in relation to progress on the Scottish Government’s Reaching 100% (R100) Programme. As the Minister for Energy, Connectivity and the Islands, I have been asked to respond on her behalf.

The procurement process for R100 is now well underway and I can confirm that we have three highly credible bidders currently engaged in dialogue. The procurement process is, however, complex and tightly bound by law and procurement rules. I will of course advise the Scottish Parliament first when we are in a position to award the contract, but I can confirm that this is anticipated during 2019.

I trust this information is of use to you. I am sorry that I cannot be … [sic] on the details at this stage, but will endeavour to make sure all MSP’s [sic] and MP’s [sic] are kept well informed of details as they emerge.”

No reason has been given for the delay, although it’s interesting to note that three “credible bidders” are still involved at this late stage (originally it was BT, Gigaclear, Axione and SSE Enterprise Telecoms). Last August we revealed that a legal dispute between two of the potential suppliers (BT and Axione) had erupted but since then there has been nothing new on the subject (here), although quietly we’ve heard that a dispute between bidders is on-going but it’s unclear if this includes BT.

Naturally John Lamont has been only too keen to remind the Scottish Government’s Rural Economy Secretary, Fergus Ewing SNP, of his pledge to quit if he couldn’t complete the roll-out project by 2021 (here), which is starting to look increasingly likely.

John Lamont MP told ISPreview.co.uk:

“There has been radio silence from the Scottish Government on broadband in recent months, so I am not hugely surprised that the R100 programme is already delayed.

Given the Cabinet Secretary in charge said he would stand down if the programme was late, I would have thought he would want to keep on top of things.

Since it was announced, the R100 programme has been touted as the solution for everyone in the Borders who has an issue with their broadband. Now we learn the project hasn’t even started, is already months behind schedule and that no money has been actually set aside for it yet.

The UK Government has provided more funding per head to Scotland than any other part of the UK to deliver better broadband, but the Scottish Government have let people in rural areas down. It is hugely frustrating for too many people that we are still lagging behind the rest of the UK. It is a complete nonsense in this day and age that nearly one in five people in the Borders do not have access to decent broadband.”

In fairness Scotland faces an extremely challenging task as the remaining 5% live in some of the most sparse and rugged terrain, which given the growing focus on expensive “full fibre” technology could prove to be a very difficult nut to crack. We’ve already seen how some similarly grand aspirations in Wales have, as the reality of the huge economic and technical challenge sets in, fallen well short of early expectations (here).

On top of that there remains some confusion over how the SG can best balance R100 against the forthcoming 10Mbps+ Universal Service Obligation (USO) in order to minimise the potential for duplicating any public investment. The USO does carry a 12 month rule to cover areas that are already in another roll-out plan, but this won’t cover every eventuality and still leaves some room for a clash.

The longer this goes on the more the SG may be tempted to fall back on cheaper satellite and fixed wireless broadband solutions, which will not help to achieve the wider UK goal of delivering nationwide FTTP coverage by the end of 2033. At this point it’s worth reminding readers that the responsibility for improving broadband in Scotland is reserved to Westminster.

UPDATE 25th March 2019

A credible source has informed us that Openreach / BT are no longer part of any dispute in the R100 contract / bidding process.