Essex Council Take Legal Action Against Rural Broadband ISP Gigaclear
Abingdon-based UK broadband ISP Gigaclear, which has long been rolling out their gigabit speed Fibre-to-the-Premises (FTTP) network to cover rural locations across Essex (England) – via a mix of commercial build and state aid supported contracts, is now facing legal action from Essex County Council (ECC) over an alleged failure to deliver on their contracted builds.
The alternative network provider is principally owned by Infracapital, together with Equitix and Railpen. The company previously had investment commitments estimated to be worth up to around £1.1bn (here), but at the end of last year they also secured a new £1.5bn debt facility (here) and have since won the £16.6m Project Gigabit rollout contract for East Gloucestershire (here), as well as the contracts for North and South Oxfordshire (here).
However, the situation in Essex concerns their earlier contracts under the previous Government’s original Superfast Broadband (SFBB) programme, which was managed at a local level by the council with support from the Building Digital UK (BDUK) agency. As we very roughly recall, Gigaclear held several of these contracts, such as Phase 2b (part of Epping Forest), Phase 3.1 (Uttlesford), Phase 3.2 (Braintree, Colchester) and Phase 4a.1 (Epping Forest).
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As we’ve reported in the past, Gigaclear did face some significant delivery delays to a number of their rural broadband roll-out contracts a few years ago, which wasn’t just a problem in Essex but also affected similar contracts in other counties too (e.g. Devon and Somerset – here, where the contracts were eventually scrapped as a result). But some local authorities, like Essex, opted to stick with the provider and accept some delay.
According to the BBC News, the ECC has launched court proceedings against the firm for breach of contract, claiming three of their four build contracts remain unfulfilled – these were expected to bring their gigabit broadband network to more than 10,000 remote rural premises. But apparently around 400 of the contracted addresses in the Braintree, Colchester, Epping Forest and Uttlesford districts are still without access.
Lee Scott, ECC Cabinet Member for Planning a Growing Economy, said:
“We have made every effort to resolve these issues with Gigaclear, supporting them throughout the process. It is deeply disappointing to be let down in this manner.
Rural connectivity is crucial, and our residents have been waiting patiently for better broadband access… connectivity they need and rightfully deserve.”
Nathan Rundle, CEO of Gigaclear, said:
“We have successfully delivered ultrafast full fibre broadband to over 90,000 properties in Essex to date.
Over 12,000 have been delivered using the top-up government subsidy programme.
We are aware of the application by Essex County Council and for legal reasons it is inappropriate for us to comment at this stage.”
The figure of 400 premises might not sound like much, but in remote rural areas it can be extremely costly and time-consuming to extend FTTP to such premises (sometimes reaching £2-4k per premises). In addition, unexpected build obstacles can sometimes make it so expensive as to be economically unviable to deliver.
Network operators with contracts often try to mitigate against such issues by updating their plans to compensate via an expansion in different (more viable) areas, although how much allowance there is for change does depend upon the details of the contract. Likewise, the exact details of the situation in Essex aren’t currently known, although it’s a shame that they’re having to settle it through the courts.
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The situation will probably also be raising question marks over some of Gigaclear’s more recent contract wins under Project Gigabit, which they’ll hopefully be moving heaven on earth to deliver on time. Lest past issues start to be perceived as an expected trend.
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, BlueSky, Threads.net and Linkedin.
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It seems reasonable that if they’ve contracted to deliver to a specific list of properties for a specific cost, that they should be held to that.
It also seems reasonable for Essex *not* to have signed a contract that says “yeah, we’ll take your money, and we’ll deliver to as many properties as we feel like until we get bored”
If the risk was on Gigaclear, then either they should have surveyed properly first, or else they will have already priced the risk into the contract.
If they *knowingly* accepted a contract with no intention of delivering to the 400 hardest properties, just to undercut some competitor’s bid, then that’s fraud.
This is a difficult one
Essex County Council (ECC) should have pulled the contracts like other local authorities did several years ago but they are now left with egg on their faces. If no money has been paid to Gigaclear for these missed 400 properties what are ECC hoping to achieve from the legal action. Are ECC saying they are willing to pay the cost of deploying to these 400 properties even if it going to cost tens of thousands per property
Its unclear what money has been withdrawn from ECC/BDUK, the legal action is because Gigaclear have not fulfilled the contract.
LOTs are deliberately setup to be a mix of properties which are not commercially viable and the ultra expensive (£2-4k). Otherwise they’d struggle to get bidders for the latter.
ECC do not want to set the precident that you can complete the bits of the contract you like and give up on the rest.
@Alex A
Thats not how the ECC contracts work for this work, there is an agreed threshold for a property (mainly grouped together) and if the initial survey shows the property will go over it then the property delivery is frozen until ECC find more money for those properties. There are multiple examples of this happen during ECC Phase 1 to 4 builds.
So it sounds like they’ve burnt through the BDUK money before they’ve completed the work and are now trying to worm their way out of doing the rest of it.
Money is paid on completion so no money has been paid yet for these 400 properties.
Hate to say it but would the situation have occurred if Openreach had been given the job in the first place?
Open Reach does t want these jobs, they aren’t interested in the hassle of providing in rural areas, it’s why all these altnets were started. They picked up,the business Open Reach doesn’t care about.
If Openreach doesn’t want it then that pretty much says it all.
Not really, it just shows despite all the government money given to them Open Reach are only interested in easy profits, despite cutting off the copper lines in all the rural areas, some with no FTTC or mobile reception.
From memory, Gigaclear won this contract in competition with Openreach (and possibly others, it’s a while ago!). The council is doing the right thing for its citizens by enforcing this and Gigaclear should be held to account for the delivery of the whole of its contractual commitments.
It worth noting that Openreach have successfully completed all the Essex BDUK phrases allocated to them.
This is the scummy lot that sued the Scottish government delaying the award of the Highlands and Islands lot. That was after Devon and Somerset had pulled the contract on them. Frankly this bunch of jokers should be ineligible for any public money. I hope Essex council can hold their feet to the fire.
Fibre never looked so sexy!
We live in one of the 400 properties. We’re in a little row of rural cottages (6) to the north of Colchester and the Gigaclear roll out got to within aprox. 300 metres of where we are. There is even one of the little green
cabinets at the end of lane. So its very frustrating that they got so close, yet so far… the feeling between us and our neighbours has been – for a year or so now – that we’ll never receive the high speed roll out. The council’s action is welcome but I still don’t believe we will get high speed broadband as a result of the legal action.
I know one of the Uttlesford homes.
After years (decades, really) of “soon”, Gigaclear finally sliced up local lanes with months of disruption, but at least “soon” was going to be “soon”. Now there’s sun-faded trenches and rusting Toby-boxes (or similar) at the edge of the houses round there. But all went quiet years ago, and Gigaclear still refuses to show any service on their postcode checker.
To put in perspective how long they took: For a few years Gigaclear was the only option which promised to save everyone from 2.5Mbps ADSL; then Openreach eventually brought FTTC VDSL (the first sort) during the years that Gigaclear dithered. (Nostalgic…)
Perhaps Openreach’s long-awaited delivery took the wind out of Gigaclear’s hot air. Perhaps it’s upstream infrastructure delays. Difficult to know.
Whole industry needs to be fully regulated – It’s become a total mess open to abuse from any cowboys.
So True!
It’s actually heavily regulated. It’s just the regulations aren’t equally enforced.
This mob have provided a FTTP service to my home village. I’ve watched them through Surveying, Initial presentations to the locals (I didn’t get an invite ’cause I’d asked ‘awkward’ questions but a neighbour copied me the details), publicised plans, and installation having to put up with their overnight works in the shared ducts outside the house and blocked drive when they had to install a duct (that went half way across the road and no futher).
Today; they say they finished the work in the Parish but the properties outside the village have not even seen anyone installing fibre to the poles in their group of 6 properties – one is at the then of a difficult O/H cable route – was in their original plans but we now expect will never be done.
They are just ‘Cherry Pickers’!
I think the same can be said (to varying degrees) of all Alt Net’s – they supply what’s cost effective to build.
Of course where the Gigabit contracts come in things change a little, but then it’s based on fulfilling a contract, and i’m not sure if you’re talking about a contract build, or where they’re just rolling out near you.
If the details in the article are correct and these contracts were part of the previous BDUK Superfast scheme, which was designed for upgrading copper to FTTC, then it’s unsurprising this is the outcome. New FTTP and upgrading to FTTC are totally different deployments with different costs.
Gap fund subsidy available in Superfast contracts was sufficient for Openreach, but no where near enough for an altnet to built a full new FTTP from scratch. This was an inevitable outcome that Gigaclear were clearly naive to sign up to, but the council who issued the contract needs to accept equal blame.
If the council are prolonging this with legal action they are likely to be keeping these remaining 400 properties excluded from being ‘white’ in project gigabit and therefore unlikely to be covered by that scheme too. ECC are better off cutting their losses and handing over to someone else with deeper pockets to finish this.
Trouble is if Gigaclear have already done the rest of the contract no one is going to want a contract to do 400 of the most difficult properties (at least not without a massive wedge of public money).