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BDUK Prep New Option for UK Rural Gigabit Broadband Builds

Monday, Aug 21st, 2023 (12:01 am) - Score 3,272
Project-Gigabit-Funded-by-UK-Government

Multiple industry sources have informed us that the Government’s Building Digital UK agency is fielding interest in a new funding option for rural-focused procurements under their £5bn Project Gigabit programme, which appears set to target smaller community style builds of around 200-500 properties.

At present over 76% of UK premises can already access a gigabit-capable network (details), which falls to 53% when just looking at FTTP technology (i.e. the gigabit figure is boosted by Virgin Media’s HFC upgrade – here). But Ofcom currently forecasts gigabit coverage to hit 92% by March 2025 (here), with purely commercial deployments alone being expected to deliver over 80% of that.

Project Gigabit is thus intended to help tackle that final 20% and, more broadly, aims to help extend networks capable of delivering “gigabit” (1000Mbps) download speeds (and uploads of 200Mbps+) to “at least” 85% of UK premises by the end of 2025, and then “nationwide” coverage (c.99%) by around 2030 (here).

The project uses a variety of methods in order to tackle this gap, although our readers are probably most familiar with their Gigabit Infrastructure Subsidy (GIS) rollout contracts with network operators (both at a smaller ‘Local‘ and larger ‘Regional‘ or ‘Cross-Regional‘ level) and the demand-led Gigabit Broadband Voucher Scheme (GBVS).

The New Funding (Procurement) Option

According to our sources, BDUK are currently fielding interest in the prospect of introducing a new funding option, which would focus on subsidised procurements for smaller builds (c. 200-500 properties) across three LOTS (North, Midlands and South). These would be even smaller clusters than the ‘Local’ contracts that have so far been awarded via the GIS contracts, which normally cover a few thousand premises each.

This is also the same sort of area as is normally covered by the voucher scheme (i.e. builds for specific communities), except suppliers in this new option would benefit from upfront funding. By comparison, securing vouchers and getting paid has become somewhat of a slow and tedious process for some suppliers, which has also been disrupted by regional programme suspensions and cases where some schemes have been unexpectedly cancelled (here) – leaving supplies with the financial headache of a wasted effort.

At present the details are quite thin, although we understand that multiple suppliers could be involved with each of the above LOTs (possibly 12-35 per LOT). But the catch is that BDUK seem likely to introduce additional eligibility checks (e.g. cashflow requirements), which may partly reflect the natural risk aversion of politicians and the growing threat of instability in the wider alternative network (AltNet) space.

On top of that, suppliers who bid on smaller builds will also be required to offer wholesale access to their network, just like with the larger subsidy contracts. The expectation is that all of these caveats could discourage smaller network operators from taking part, although it’s still a bit too early to judge.

A spokesperson for BDUK confirmed to ISPreview that they were engaging with industry partners and considering the best options for delivering connectivity to those areas that aren’t currently included in commercial suppliers’ plans or by existing local, regional, or cross-regional contracts. But they weren’t able to provide any further detail on the new funding option or when it might become available.

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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 X (Twitter), Mastodon, Facebook and .
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Comments
26 Responses
  1. Avatar photo N says:

    I guess when you have have a hammer everything looks like a nail.

    Procurement process with red tape, wholesale access for a 200prem project is nuts. GBVS is perfect for this, if it ain’t broke, don’t spend 200k of procurement costs (remember both sides have costs associated with bidding, passing due diligence, writing wholesale access contracts that will never be used) on a 400k project.

    1. Avatar photo Andrew G says:

      Unless it is a very streamlined process they’ll soon find out that not many suppliers will want to waste time and money on a procurement exercise for such small lots. I’d guess that many such lots will attract no bids or only one.

    2. Avatar photo Ivor says:

      if the bidders can’t adhere to the wholesale requirement, then don’t bid. Anything that gets gobs of taxpayer subsidy shouldn’t come with vendor lock in – especially as the altnets own ISPs just don’t have the same quality of service as the established players.

      My parents’ area is possibly/maybe getting an altnet that has received gov subsidy, despite the fact that Openreach FTTC is available, Openreach FTTP is already within spitting distance and they had already declared they’re going to finish the job. It’s not a hard to reach area, it doesn’t need further subsidy, but that’s not stopping the government.

    3. Avatar photo XGS says:

      Your parents’ area or your parents’ specific property, Ivor?

      Openreach are unlikely to cover 100% of the properties. There’s almost certainly going to be some that aren’t in the commercial rollout. BDUK will plug the gaps.

      It does seem insane that an altnet is doing it though, for sure, however across the entire cost of the contract I guess the altnet made a more compelling bid. They’ll do a combination of overbuilding Openreach commercially and using BDUK to plug gaps most likely. Evidently Openreach having existing FTTC didn’t make their proposal the most persuasive across the lot.

    4. Avatar photo Ivor says:

      area. it’s a very long but densely populated road, worthy of getting the bigger Huawei FTTC PCP back in the day. I don’t see any reason why it would be left off of Openreach’s list. I assume the people at the far end of the road just about get the 30Mbps+ target speed…

      The bulk of the village already has OR FTTP (in fact, you can stand where the PCP is and you can see FTTP infra on the poles serving other roads)

    5. Avatar photo XGS says:

      Thanks. For your parents and anyone else to be eligible for funding for the altnet to cover them Openreach and everyone else must’ve confirmed they don’t plan to build to them within 3 years.

      In their case Openreach would be cheaper however I guess across the lot that was bid for the altnet made a lower bid. Vouchers better for smaller areas IMHO however at some point have to aggregate them and fix the coverage in time for procurement.

    6. Avatar photo Peter Delaney says:

      Yet another scheme. Just what we need…

      It could be that the communities this scheme is aimed at will be the ‘islands’ left behind by others schemes where the supplier opted not to build.

      Offering these as separate contracts, perhaps with additional subsidy, could encourage bids but likely only from incumbents in the area who have the infrastructure and backhaul already in place.

      More detail needed though.

      How this scheme will fit in with the existing schemes (which already tread on each others toes) remains to be seen.

  2. Avatar photo Big Dave says:

    Will Openreach be eligible to bid for these contracts? Come to think of it would they want to?

  3. Avatar photo GreenLantern22 says:

    Mark I think you meant “unexpectedly” cancelled.

    1. Mark-Jackson Mark Jackson says:

      Corrected, thanks.

  4. Avatar photo Anthony says:

    What happened to the FTTP cable through the sewage pipes trial. Did it fail? That seemed like a very cost effective way to get the cables into rural areas.

    1. Avatar photo Ivor says:

      wouldn’t the genuinely “hard to reach” (ie not those who are “rural” because they can see a field from their bedroom) also be too hard for the water companies to reach?

      wasn’t that idea aimed at cities anyway, where it would be too difficult to get new ducting in. rural areas are more likely to have overhead wiring so that would be the easier option vs having to deal with literal excrement

    2. Avatar photo Winston Smith says:

      Water main rather than sewage pipes. The trials are to last two years, apparently and if successful could be in operation from 2024 onwards.

    3. Avatar photo Andrew G says:

      Fibre through water mains is unlikely to be viable other than for niche use cases. At a basic technical trial level it’s easy, but when you’re talking about real world scenarios I’m sure (from over ten years working for a water company) that there’s sufficient issues that it’ll turn out to be impractical. Potential for leakage, need for water supply qualified staff to do the job, greater depth of water mains compared to telecoms infrastructure, challenges of threading in a bore that’s full of isolation valves, washouts, hydrants, and side connections, there’s durability issues when mains are being washed out, considerable difficulty of damage repair in the fairly common burst main scenarios. You could address most of those, but ultimately why? If telcos need nice smooth ducts for cabling, they need to get of their behinds and invest in purpose built ducts and chambers, instead of Heath Robinson ideas like using water pipes.

    4. Avatar photo Big Dave says:

      @Andrew G

      Given some of the shenanigans with contractors we read about on here it sounds like a recipe for people to end up with their water cut off.

    5. Avatar photo Gerarda says:

      It also assumes that the pipes are in good condition and not subject to bursts every few monthsd

  5. Avatar photo Taras says:

    What about those streets where, one or two get missed. Why can’t a top up be given in those circumstances.

    Many in the new forest and also in Hampshire for instance will have this issue, that one or two properties that are just hard to reach but a network builder wants to do the rest. Why should that singular property be left out

    1. Avatar photo XGS says:

      Those are part of what existing BDUK procurement is for.

    2. Avatar photo Biobob says:

      I am stuck in that situation the only house in the whole district and there are zero schemes to help, the bduk is a farce as you have minimum have 2 houses missed and no work ongoing by an installer, they keep listing work getting done when they left 2 years ago

  6. Avatar photo Biobob says:

    Bt installed fttp to all houses in my rural area but didnt install to mine as somebody made a mess of the plans, so they just cut off the cable that should have been dug the few hundred metres and left. That was 2 years ago and still left with zero broadband, but nothing and nobody will do a thing. So my house will be forever left without anything other than very poor 4G as all the schemes do nothing

    1. Avatar photo Fastman says:

      i assume you mean openreach — what did you do you about and did you raise with openreach directly and what was the response if you did

    2. Avatar photo 125us says:

      How much are you prepared to pay monthly to reimburse a network owner for a 200 metre dig to your property?

    3. Avatar photo XGS says:

      If they were originally claiming they’d cover you that might well have been the mess up.

      To dig to you 200m away would cost thousands. A couple of footway boxes so there’s a couple of grand, if it’s verge all the way over 7 grand for the duct, if it’s standard footpath getting of for 17 grand, then the fibre cable itself which is about £500 give or take.

      I can’t see Openreach making £10-20k of profit on you from regular FTTP during your lifetime so it’s a challenge to make the business case. They may even have simply run out of funding as they usually do the easier bits first then work through the rest of the budget doing the more difficult parts.

    4. Avatar photo Martin says:

      Maybe cheaper using poles, but I guess the point still stands – what’s the limit on spending to serve just 1 extra property.

      If it was just openreach with no altnets or cable, there is a strong argument that it’s fine as it just averages out. But in the competitive market we have now who foots the bill for the unprofitable locations

  7. Avatar photo Anon says:

    Perhaps time the government considered contracting directly with build partners to design and build dark networks which follow a set architecture which is then auctioned off Lot by Lot on completion to communication providers.

    £100M Altnet contracts would quickly turn into £50M Build Contracts with the network auctioned off to a communications provider at £25M say…..

    The cost saving comes from the procurement and levels of management and getting in each others way that’s skipped.

    Fantasy land, I know!

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