Scotland Aim to Sign R100 Broadband Deal with BT Before 2021

The Scottish Government (SG) has informed ISPreview.co.uk that they expect to sign a contract with BT (Openreach) for the delivery of their much delayed LOT 1 area, which forms part of the £579m R100 (Reaching 100%) superfast broadband roll-out programme, “before the end of the calendar year.”

So far the SG has already awarded two out of its three R100 contracts – Central (LOT 2) and Southern (LOT 3) – to BT. The same operator was also provisionally selected to deliver LOT 1 (North Scotland and the Highlands), but that was scuppered by a legal challenge from rival Gigaclear (here).

As we reported last month, Gigaclear’s case against the SG has now been settled (here) and thus work to finalise the award of LOT 1 has resumed. LOT 1 is the largest and was originally valued at around £384m – potentially reflecting about 100,000 rural premises across the Highlands and Islands, Angus, Aberdeen and Dundee. The contract also specified 9 mandated areas where 25% of premises must be able to get speeds of at least 100Mbps (on a gigabit-capable connection).

However, a recent meeting of the Association of Shetland Community Councils (ASCC) warned it would be “unlikely that the contract will be awarded before January/February of next year because significant changes to the scope will be required (the original scope is now three years old)” (here). Part of this stems from the fact that network coverage has changed a bit over the past year and thus the roll-out plan must be updated to reflect that.

Similarly, a report by development manager Thomas Coutts said, “It appears unlikely that the contract will be awarded before early 2021.” We raised this with the SG, which said that “speculation regarding the timescales” for signing the new deal is “unhelpful,” before promptly speculating themselves that the contract could be signed before the end of 2020.

A Scottish Government spokesperson told ISPreview.co.uk:

“The legal challenge having been withdrawn, we are now focused on finalising the R100 North Lot contract award with BT at the earliest possible juncture to enable us to progress delivery of access to superfast broadband to people, businesses and communities in some of the most remote parts of Scotland.

Speculation regarding the timescales for doing so is unhelpful – Ministers will keep Parliament informed on progress and the Minister for Energy, Connectivity and the Islands has written to the Rural Economy and Connectivity Committee to update MSPs on progress, highlighting our expectation that contract signature will be achieved before the end of the calendar year.”

The SG actually has little option but to finalise their contract with BT before the end of this year because that’s when the current umbrella state aid agreement for broadband expires. Missing that deadline would be problematic and could risk more delays.

In the meantime the SG has highlighted their newly launched and “uncapped” demand-led Scottish Broadband Voucher Scheme (SBVS) as a fix, which provides funding of up to £5,000 to help premises – those not in scope of either the R100 contracts or planned commercial investment – to obtain superfast broadband where ISPs may not ordinarily go.

Smaller “interim vouchers” of up to £400 are also being made available for premises where 30Mbps+ is planned for after the end of 2021 – with an additional £250 for those in the hardest-to-reach areas (this is partly intended to help cover for the LOT 1 delays).

Whether or not those vouchers are enough to truly “ensure that everyone who requires a superfast broadband connection by the end of 2021 can have one – including those in the R100 North Lot area” is another matter, particularly since traditional Satellite connectivity is not a very attractive option to most consumers, but for now it may be the only economically viable one available to some extremely remote areas.

However, for most people in the north of Scotland, the focus is still firmly on LOT 1 and how many premises it can put within reach of gigabit-capable FTTP (we suspect this contract, given the delay, may take until 2025/26 to complete its roll-out).