Closure of Gigabit Voucher Scheme Threatens B4RN’s Fibre Build UPDATE
The B4RN (Broadband for the Rural North) project, which is building a 10Gbps capable Fibre-to-the-Premises (FTTP) network across rural premises in several UK counties, has warned that the Government’s new £5bn Project Gigabit programme is threatening to seriously disrupt their builds in Cumbria and Northumberland.
The provider, which has so far covered 17,000 rural premises and expects to reach tens of thousands more over the next few years (progress), is a registered Community Benefit Society (i.e. it can’t be purchased by a commercial provider and profits are distributed back into the community) that first began building in Lancashire during 2012. Since then, they’ve expanded into parts of Cheshire, Cumbria, Northumberland, Essex, Norfolk, Suffolk and Yorkshire.
Originally, the majority of their network was funded by communities investing in the company through shares, and many of those did so while also helping to physically build the new fibre infrastructure (volunteers on soft digs through fields etc.). But more recently they’ve also been harnessing millions of pounds worth of gigabit vouchers and community investor loans, which has enabled them to build faster.
However, B4RN are now warning that a significant number of their projects in Cumbria and Northumberland (i.e. those that are both in-build or planned for the near future) have been put at risk as a result of the Project Gigabit (Building Delivery UK) team’s plan to “close” the £210m gigabit voucher scheme in those two regions on 24th September 2021.
Previously, the operator had been assured that communities where B4RN plans to build in the next 5-years would be marked as “Conditional White” and will thus be available for B4RN and other ISPs to build through voucher funded projects, until the Regional Suppliers have completed build in uncontested areas – ensuring pace of build is optimised across the region.
The problem is that a large proportion of B4RNs planned 5-year build programme was later found to have been “included in the initial procurement” for regional suppliers under Project Gigabit, including “many areas where B4RN is already actively engaged with communities and where planning for a voucher funded build is well underway.”
As a result, B4RN has been forced to scramble and is calling on many planned volunteer-led communities to “get as much sign up as possible by 10th September,” which should allow enough time to submit the vouchers before the deadline.
Tom Hurst, B4RN’s Head of Community Engagement and Development, said:
“DCMS will be closing the voucher scheme for new voucher registrations across Cumbria and Northumberland on the 24th September 2021. All newly issued vouchers will have a 12 month lifespan and the property must be connected within this timeframe.
The voucher scheme will then remain closed to new applications while DCMS arrange contracts with a regional supplier to deliver [gigabit-capable] broadband across the two counties. Those areas which are not included in the regional supply contract may be made available again to the voucher scheme after the procurement period, however this is expected to take 12 – 18 months.
So in order to prevent indefinite delay to your B4RN project, you must act now to maximise sign up in your area. There is no guarantee that your area will be included in the governments regional plans, and experience shows that rural areas normally miss out, so if your community wants B4RN, then they need to sign up now!”
Needless to say, the situation is far from ideal and has placed a significant burden on B4RN (at relatively short notice), as well as any other alternative network (altnet) builders that might be in the same boat, to secure vouchers for their future plans or risk many projects becoming stuck in limbo, or perhaps even being abandoned, until after the procurement completes (this could take a year or more).
“If the intervention area is upheld as shown, it will drastically and unnecessarily cut short B4RN’s build programme in the region whilst guaranteeing larger commercial suppliers a well-funded pipeline of work for at least the next five years,” said B4RN. The operator has already launched a campaign (Battle for B4RN) to reverse the change, which has received backing from a number of local MPs.
We have asked the Project Gigabit (BDUK / DCMS) team for a comment and will update once that arrives. Meanwhile, just to give a flavour for all this, here’s a long list of the B4RN projects that are at risk of being affected by the change (below), and you can get more context here. Credits to one of our readers, Brian, for spotting this.
Affected Projects:
Projects in build
Allendale Town
Burton-in-Kendal
Catton
Crosthwaite
Firbank
Heversham
Kirkby Lonsdale
Levens
Preston Richard
Selside
Storth
Whitfield
WitherslackProjects in advanced planning
Barrasford
Brough
Brough Sowerby
Cartmel Fell
Crook
Grayrigg
Kirkoswald
Nateby
Ravenstonedale
Sedbergh
Spartylea
Strickland KetelProjects in planning
Ackenthwaite
Broughton in Furness
Great Langdale
Calthwaite
Garrigill
Great Salkeld
Hawkshead
Holme
Hugill & Kentmere
Kirkby Ireleth
Kirkwhelpington
Lazonby
Lowick
Melmerby
Mungrisedale
Nenthead
Rusland Valley
Sawrey
Skelton
Skelwith Bridge
Stainmore
Troutbeck
Wallington Demesne
Woodburn
UPDATE 4:08pm
We’ve had a response from DCMS.
A DCMS Spokesperson said:
“We are not closing the voucher scheme. This is still a live process and we are reviewing the plans of B4RN and other suppliers to determine which premises to target. Ultimately no eligible home or business is going to miss out on funding, through either a voucher or Project Gigabit contract, to get gigabit connectivity as quickly as possible.”
We should point out that BDUK follows a Public Review process to help them identify which areas will benefit from commercial builds and which will not (i.e. those in need of support). As part of this, they also have to protect taxpayer’s money, not least by avoiding duplication of the planned rollout. As such it can be necessary for them to temporarily pause vouchers in some areas to help build up a stable picture. All of this was communicated to suppliers back in June 2021.
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, Google+, Facebook and Linkedin.
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Great news , one less of this ridiculous scheme by the goverment to make a patch work fibre network with unfair pricing all
around the country
Yep, totally. The government needs to do it properly and stop pretending its investing when it could instead pull the funding from the HS2 vanity project and give the UK something we actually need and want (instead of jobs for the boys).
HS2 is vital. Without it we have to build more motorways to handle the volume of freight traffic.
Yeah cos HS2 is going to take all the freight off the motorways…………..lol
No, it will stop us having to build more motorways. Did you not read what I said?
If you think HS2 will make any odds to roads you’re mistaken. But nice try.
The problem with B4RN and indeed all the altnets is the total lack of choice in effect. If that’s the only “superfast” or “ultrafast” or whatever ridiculous name is being given to the speeds offered now, it isn’t a choice.
Things are actually better in some respects when you have Openreach provide service to all – and if the money was put into and we had a properly neutral national “last mile” operator, and everyone else could offer differentiated services on top that would be great for all.
As it stands, if you are somewhere where there’s er, B4RN, B4RN or B4RN and the service they offer isn’t what you want, tough. Then you can have a really slow ADSL. That isn’t “good” for consumers, that’s a local monopoly and a bad thing.
There are so many altnets and they’ll mostly be consumed by the national operators eventually as it simply won’t scale. B4RN gets away with it right now because of the reliance on volunteers, easy wayleaves etc – but that isn’t any guarantee of long term success.
I very much expect (for better or worse) that we’ll end up with very few altnets eventually, and because of the way we did it, we’ll end up back with the same nonsense we started with.
I’m just trying to work out what in the way of internet connectivity any domestic user might want that B4RN don’t offer, at a very competitive price. 1Gbps symmetric for £30/mth. I challenge you to find that from any other supplier. Or 10Gbps for £150/mth. That’s insanely inexpensive.
The absence of other bundled “services” is a bonus.
Then there’s the less tangible benefits of the community cohesion that working together on a project brings about.
A bit of a kick in the teeth for some of these small, remote communities. They’re the ones at the bottom of the commercial interest pile. And generally ignored while others are getting pointless multiple fibres down the same street.
B4RN has probably done more to connect hard to reach communities than any other provider, and at lower cost. BDUK should be doing all it can to help B4RN succeed, and holding it up as an exemplar altnet delivering on Project Gigabit’s goals. Instead they sppear to be shooting themselves in the foot with this move. Let’s hope that common sense can prevail at BDUK, and that B4RN is enabled to continue its important work.
@Jimbob
I’m pretty sure Gigaclear has covered more rural premises than B4RN, and of corse Openreach has covered substantially more.
@Newlondoner – As usual we are comparing apples and pears. If you look at the 3M “rural” properties that OR are saying they will connect at their own expense virtually none are actually rural. The ONS has a database which assigns a value between “A” and “F” to every postcode in the UK. “E” and “F” are classified as rural. (See RUC11 for more info)
100% of B4RNs builds are in E or F with the majority in the F group. The OR “rural” postcodes are all in the A to D classifications. This shows clearly that B4RN is working in the real rural areas and OR are not. So there is little if any overlap between them.
The London centric view of the world seems to consider anything north of the Tottenham Court Road as rural inhabited mainly by dragons and nutters!
@Barry – Achnasheen, Office of National Statistics Rural/Urban classification for IV22 2EJ
Scotland 8: a village with a drive time of more than 60 minutes to a settlement of 10,000 or more
https://telephone-exchange.co.uk/Achnasheen-NSASN.html Fibre to the Premises services are available to customers connected to the Achnasheen exchange.
@Gadget – There are pockets of FTTP scattered all over the place round here but in every case they have been funded via the Superfast Broadband initiative, not paid for by OR out of their own funding. Do you know if thats the case with Achnasheen or have they really funded it themselves? I guess there must be some rural FTTP they have self funded for strategic reasons but none round here.
@Barry – yes OR funded themselves
@Gadget – Interesting, Samknows is showing Achnasheen as having no FTTC or FTTP but I see on OFCOM’s system some properties are showing FTTP but not all. Typical OR, they rarely do 100% of properties on an exchange.
Gadget
ISPReview ran a news article on Achnasheen in August 2018.
It was not 100% OR funded.
Brian
Samknows concentrate on their whiteboxes and ISP speed testing now.
Their availability databases are long out of date in many areas.
I’m not even sure they bother to update any exchange availability stuff now.
@barry Have you found an Ofcom Area Area 3 file with post codes and RUC1 applied? There are less than 6m premises in the EFRA defined rural town, village, hamlet, with subsets for fringes, sparse settings and isolated dwellings. The early Ofcom Area 3 included Heathrow Airport, Stockley Park and at least 3 cities but I have not seen a definitive data set on the latter.
The BDUK consultations I have seen are postcodes but no classifications, no indication of current status and no prioritisation of the outstanding work. This is why I think 1) the process has been pushed out by 9 months and 2) any business case will struggle because the incremental benefit to the tax payer and indeed demand for >100MBps services by those already on 30-80Mbps will be closer to that of G.Fast.
So small upstart providers gets crushed by the taxpayer-funded cosy cartel. Rather like in local radio where the BBC strangles competition.
The issue here is taxpayer funding. Everyone will be in receipt of it.
Think that funding is how B4RN have been able to make the business case for hard digging.
How does the BBC strangle local radio?
@The Facts
“How does the BBC strangle local radio?”
Commercial channels have to earn advertising revenue to fund their services. BBC channels on the other hand are funded by taxpayers. Also the BBC prevents its rivals from being allocated channels by broadcasting the same output on multiple frequencies.
The use of vouchers to build national infrastructure is a bit desperate. It is not clear the business case for ‘gigabit’ can be made given its assumes their is a case to overbuild with subsidy that which has already been subsidised, at the expense of those so far excluded from the rural upgrades.
There are about 14,000 premises in Cumbria that have yet to see any improvement. This should be the focus. B4RN and OR can compete overbuild the already subsidised FTTC services where there is demand to do so.
Are you saying B4RN is cherry-picking?
BARN ( as a small shareholder) is the least of the cherry pickers, but vouchers are a poor substitute for getting premises under contract where in theory at least the vendor makes a direct contribution to costs.
Now, vouchers are being used to overbuild what has already been subsidised which leads to a mess. In Cumbria’s case I think it is about 14,000 premises outstanding from the original notification so IMHO that’s where the focus must be, not overbuilding the 100k or so that have had an upgrade.
Vouchers have only added 70,000 connections, so deliver very little, are expensive (or profitable) and leave gaps which may need to be contracted later at even greater expense.
The criticism is of the voucher as a tool. The BARN ambition without vouchers, like the 6.2m BT FTTP rural customer offer need to be deducted from those premises being consulted upon. If that is done there is no ‘Gigabit-capable’ programme only an unfinished Superfast programme requiring another ~300k English premises to be contracted using existing process and monies still outstanding.
The ‘gigabit-capable’ is only a Boris Johnson whim which has already been kicked out to next year to provide time for the business case to fail (imHO), or to permit events to supersede an ill thought through election promise. The business case for subsidy to overbuild what has been subsidised is likely to fail because demand for upgrades by those on 30-80Mbps will be comparatively low – perhaps like subs to G.fast.
Project Gigabit (Building Delivery UK) team’s plan to “close” the £210m gigabit voucher scheme in those two regions on 24th September 2021.
this has been on the cards for a while now and affects all operators expecting to use operators so not sure why its a shock
CarlT
B4RN don’t “cherry pick” – their projects are led by local communities at the Parish level. Local volunteers get together, gauge demand and if sufficient work with B4RN to draw up a plan,
Fastman
It is not the closure that is a shock to B4RN but that it was done in a way which is different to what they’ve previously been advised. For example, each project has a total amount of “voucher” money available. B4RN will often start the build before enough vouchers are received in the knowledge (from previous builds)that more people sign up once the build is underway. The closure removes this as no new vouchers can be applied for.
I didn’t say that they did, Brian. I’m very aware they don’t, hence the implied incredulity in my question to NGA.
@brian The voucher process invites abuse and there is a ‘fill your boots’ mentality by some.
BDUK consultations have not categorised the postcodes using EFRA setting on Rural – isolated dwellings, hamlets, sparse settings etc.
If the Gigabit-capable invites folk to overbuild FTTC while providing a means to avoid or not prioritising the ‘sparse setting’ and ‘isolated dwellings’, then the process needs fixing. Several iterations of the consultations have shown there is no learning being applied. The apparent stupidity suggests a process is being followed with the possibility, if not hope the business case will fail.
@NGA
I take your point that the voucher scheme is potentially open to abuse. However, I would suggest this doesn’t apply to B4RN. If a B4RN project gets given the go ahead then every property in the project area gets connected if so desired. There are basically 4 options.
Take the connection and service immediately.
Take the connection and delay service until current contracts run out.
Take the connection but no service.
Do not take a connection – a duct is terminated at the edge of the property for future use if required.
Ir people are happy with their current position the third option is usually highly recommended by local projects for 3 reasons.
It gives a choice in the future.
Local advice and expertise is available to do the install.
It adds value to the property.
B4RN only receives voucher money when a connection goes live but they still provision all prolerties in an area – it’s their core value.
B4RN works because it’s a community driven organisation. Also, as Barry Forde stated, you won’t get a cheaper commercial build.
Brian
@Brian, thank you. How many existing FTTC users have availed of a BDUK voucher via Barn to overbuild a subsidised cab? How much of the above opportunity is dependent on vouchers for FTTC users? It is probably tiny but from a taxpayer perspective it is a waste as the increased benefit in terns of a capacity to access public services is zero for those customers.
While building FTTC CURE (re-arranging copper through a cab) was done on the assumption BT Group could mostly avoid making a full capital contribution, the solution may not be overbuild this, but serve the customers beyond it.
Either Barn can say it would never work and BT can deliver B-USO and pay that cost, or BARN could make a case, where vouchers could have a role.
But overbuilding everything that has been done, has got that Bridge to Northern Ireland feel about it. The monies to 2025 are £1.1m, not £5bn of which the £100m for this year will be lost due to the delays, while some £500m of BT’s Capital Deferral has disappeared from the footnotes of its accounts since q3 last year. That is a lot of vouchers for those where FTTC CURE and BT FoD has failed to deliver.
@NGA
“Either Barn can say it would never work and BT can deliver B-USO and pay that cost, or BARN could make a case, where vouchers could have a role.”
That is exactly how B4RN works. The local community guage support and if sufficient draw up a plan with the help of B4RN. From experience and the use of their planning and control mapping system B4RN then estimate the cost. If it’s acceptable then B4RN give the go ahead. If x amount of vouchers are required then that is part of the process. Local communities are also required to raise a certain amount of investment by buying £1 shares in B4RN, to be held for a minimum of 3 years and then sold back to B4Rn for £1.
I may be wrong but I understand vouchers are only available for properties with sub standard speeds – even if on a subsidised FTTC cabinet. Without doubt no matter what scheme is used it will involve some over build of previously subsidised areas.
Historically B4RN have always built in rural Parishes as it’s far cheaper than trenching tarmac pavements plus a lot of work can be done by the volunteers themselves. With vouchers they are doing some rural towns but usually where they ave already done the rural surrounds.
Brian
BDUK have to call a halt at some stage in each region as they cannot tender a moving target or allow a situation of parallel subsidy. creating pockets that will need addressing later or premises that could be commercial due to higher FTTP activity.
Vouchers surely were meant to be for specific businesses that needed Ultrafast and that surrounding residential could benefit if justified within the cost.
If I understand this correctly B4RN are consolidating wide voucher value to rollout Full Fibre to premises regardless of their circumstance, only to those that choose to participate and depleting voucher availability to businesses elsewhere the country.
It could be B4RN are covering harder to reach properties, addressing rural ADSL and that New Procurement could cost more or be left out of the New Procurement. So what should be happening is a sensible discussion between B4RN and BDUK. Local Supplier arrangements?
B4RN rushing a signup and locking the voucher value can only make things worse for both public funding and long term some of the residents of these communities.
It has been a core value of B4RN right from the very beginning (2011/12) that once a project is approved for a Parish ANY and EVERY property in that Parish that wants a connection will get one – no matter how difficult that might be. They also terminate a duct beside each property that chooses not to take B4RN so the option is available in future.
I could be wrong but I doubt that voucher funding covers the full cost of a build – it just brings areas into B4RN’s “viable” build terms. It will not under any circumstance cover the “cost” of the volunteer hours put into any project.
@Meadmody – You are quite right about there needing to be a end point. However we are talking about a 5 year programme (excuse british spelling!!). The idea, as I understood it, was that the areas B4RN were proposing to do would be removed from the regional tender list but the contract awarded would include the option to add additional areas within the region on top of the first batch. The regional supplier would get on with their build areas and B4RN ditto with theirs. If it went according to plan the B4RN areas would be done at the same time or earlier than the rest so speeding up the whole process of connections as well as achieving 100% in their areas. Effectively this is adding resource to the build programme. The regional supplier would be funded via a tender process and B4RN via the voucher process. B4RN has consistently demonstrated its ability to deliver at a lower cost than the big players when it comes to the real rural areas so we are not talking about preferential funding, just giving B4RN a chance to deliver.
If, heaven forbid, B4RN failed to deliver then BDUK would have the option to claw those areas back and offer them to the regional supplier. Given that the areas are the most difficult to fibre up it is almost certain that the regional supplier would have left them to last, working from easy out to difficult. So its unlikely that they would have done them any earlier anyway.
I really cannot see why BDUK is shifting the goal posts when it will only delay things and worsen the situation for the last few percent.
B4RN responded to the OMRs for Cumbria and Northumberland indicating where they were proposing to build. As a result those areas were marked as “under review”. This meant that B4RN could go ahead with their builds and request vouchers towards their build costs and this was the information they got from DCMS. If B4RN failed to deliver on the builds in a timely manner than BDUK would remark the areas as White and ask the regional supplier to quote to do the work. Suddenly BDUK has reversed the process and have included those “under review” areas in the main regional lists. So vouchers get frozen till the main procurement is done. At that point BDUK will look to see what the regional supplier has declined to commit to connecting and re-open a dialogue with B4RN. However neither B4RN nor anyone else will be able to make a case to fibre up the remaining properties so they will not get fibre. There has to be a reasonable number of geographically sensibly located properties to allow a build. Under their standard build model B4RN commits to dig to 100% of properties in their build area, OR only commits to serve the commercially viable ones.
So BDUK’s about face will firstly delay things as B4RN is well on with its work, secondly end up leaving the last few percent unconnected and finally probably cost them more. As you get more rural the community builds get progressively cheaper than the traditional ones.
For the life of me I cannot see what game BDUK are playing!
Has the rationale of overbuilding with subsidy that which has already been subsidised been explained to you?
@NGA – I dont understand the point you are trying to make. As I see it there is £5B pounds of subsidy available to get as close to 100% as possible of UK properties able to access gigabit speed broadband. The vast bulk of this will go towards overbuilding previously subsidised builds. Almost all the Superfast Programme subsidy went to fund FTTC and, yes the government is now having to write all of that off and refund fibre so as to get to gigabit speeds. This is a reflection on what went wrong with the original programme.
But ignoring that for the moment, the issue is purely whether the new subsidies under the £5B scheme is allocated via a process of open tender for large areas, or a mix of smaller tenders and vouchers for small areas. B4RN uses vouchers to help make the economics work, OR and other altnets a mix of tenders and vouchers. But given that Superfast >30Mbs is now at 95% coverage and the gigabit target is looking like much the same then virtually all the new money if funding overbuild of the fttc.
The big question for me is should government shut out a very successful community initiative which is demonstrably delivering their connectivity targets, and instead offer the whole package to OR. Who lets face it will be the primary beneficiary of the regional packages.
I do not think the £5bn is secure by any means, and business is likely to fail, so there is another reason to attempt to hold onto what you’ve got.
So BT did promise a mixed economy solution and delivered mostly FTTC and eventually ~580k FTTP (including Cornwall) with another ~435k mostly FTTP under contract. The latter will include Fibrus and some other altnets. As we see from B-USO investigation BT failed to apply themselves in any meaningful way to deliver fibre-on-demand to complete in fill.
If this current proposal, a mass overbuilding of what is already subsidised goes ahead then superfast will look really wasteful. BT promise of 6.2m ‘Area 3 rural’ would suggest a big reduction will take place in BDUK plan although no reference or effort has been made to reduce the premises in the consultations so far.
The current proposal has imho all the common sense of a Boris bridge to Northern Ireland. But there has been such abuse of the existing process, why not plan for something bigger and push it through a political process where the Nolan principles no longer apply.
The 60-70% take up cannot be presented as failure, but the gaps in service are unacceptable when so much money is owed. The 97% coverage and outstanding contract work will take it to ~98.5% should not be sneered at but more is possible. Ofcom have found evidence of BT causing ‘significant harm’ in the B-USO process, the latter being the same how the FoD in-fill product was being used for what it was intended. I hope Ofcom examine BT CBP for the same ‘harm’.
It will be interesting to see if the BDUK business case gets approved. If it does it will be at the expense of finishing deep rural and ignoring the disappearing BT Capital Deferral intended to finish work deep in rural areas.
This is not new news / B4rn would have been advised at the same time as others that the procurement changes vouchers – effects everyone not just B4rn – happy procurement
BT is run by a bunch of avaricious ***** who cannot bear the thought of any competition especially from a competitor they are not allowed to buy. B4RN is a Community Benefit Society registered with the FCA not OFCOM so OFCOM cannot allow them to be sold to BT in their usual ‘for the benefit of the consumer’ scam, sorry not scam, worthwhile public interest process. So BT will be bending arms to end this scheme thus killing B4RN in the middle of their success knowing that it will become BT’s eventually as monopoly of last resort, sorry I meant national beneficial stop gap.
BT does not like being cut out of their usual process of overcharging local and regional councils to use tax payers money sanctioned by councilors who would not know an ISDN from a VOIP if it bit them on the arse. Money to fund projects that if charged at cost would be 75% less than what they ultimately pay.