Some Progress on Resolving Part Built Fibre Broadband Areas in Wales

A hint of progress is in the air as the Welsh Government (WG), Openreach (BT) and Building Digital UK (DCMS) programme are continuing their efforts to find a solution for the “stranded assets” problem, which reflects thousands of premises on unfinished (part-built) “fibre broadband” (FTTC and FTTP) deployments in Wales.

The Stranded Assets problem stems from the fact that a fair few FTTC/P deployments under the original contract were left unfinished when Phase 1 of the WG’s 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 ultrafast “full fibre” FTTP) by March 2021 (details). Despite this the WG has been clear that Phase 2 would not resolve stranded assets because, they say, such areas remain a “matter for Openreach and have not been paid for by the Welsh Government.”

Instead the WG was known to have been supporting a £12.9m “accelerated gainshare arrangement” (i.e. public investment returned by BT as a result of high take-up under the Phase 1 contract), which would have enabled Openreach to finish part built structures not completed and not paid for under Superfast Cymru. Sadly the UK Government rejected Openreach’s initial proposal for this at the start of 2019 (here).

Fast forward to today and we’ve recently noted that some premises in related areas (e.g. a few in the village of Blaenffos), which until now have been stuck in an uncertain limbo due to the aforementioned issue, appear to have suddenly popped up on Openreach’s future fibre broadband roll-out plan (confirmed via their availability checker – credits to Steve for spotting).

Upon investigating this we’ve learnt that there isn’t really one single solution to how Openreach and the WG now intend to tackle stranded assets. We’ve also had it confirmed that Openreach and the WG recently re-started the discussions over the use of gainshare money to resolve this problem, although as yet there’s no word of a solid agreement being achieved.

However the WG did confirm in July 2019 that areas marked as “under review” (this tends to include stranded assets, as well as other premises) would be looked at again as part of a new Open Market Review (OMR), which must be conducted before they can give a final answer (OMRs determine which areas will be served by existing / commercial rollouts and which will thus be left unserved / in need of help).

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

“The information we currently hold on remaining white and under review premises dates from an Open Market Review conducted in 2017. We are very shortly to commence a further OMR to update and refresh this data. I will write to you would once the review has been completed and the data has been refreshed.”

So why have some affected premises in Blaenffos and other areas suddenly had a positive change of status on future deployment plans? As we understand it there are several reasons. Some premises are now set to be completed commercially (most of the infrastructure in part built rural areas is there already and so this reduces the cost), while others have instead taken the co-funded Community Fibre Partnership (CFP) approach and a few more have been picked-up and connected through over-build schemes.

The above will still leave a lot of stranded assets left to resolve and for that we’ll have to wait and see if round two of the gainshare discussions results in a solid agreement. One of the initial problems was that some of the part built areas seemed to be FTTC based but the UK government are now FTTP focused and thus no longer approve FTTC deployments. We’ll be interested to see how they resolve that one (hopefully with more full fibre).

Separately the WG has recently revealed a more detailed but still tentative list of the roll-out plan for the 25,957 properties under their £22.5m Phase 2 rollout contract, which we’ll paste below. The first homes and businesses under this project will be connected in late 2019 and be able to place an order from early 2020.