{"id":10744,"date":"2015-12-09T01:03:21","date_gmt":"2015-12-09T01:03:21","guid":{"rendered":"http:\/\/www.ispreview.co.uk\/?p=10744"},"modified":"2015-12-09T08:58:29","modified_gmt":"2015-12-09T08:58:29","slug":"eu-state-aid-clearance-problem-delays-bduk-broadband-contracts","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2015\/12\/eu-state-aid-clearance-problem-delays-bduk-broadband-contracts.html","title":{"rendered":"EU State Aid Clearance Problem Delays BDUK Broadband Contracts"},"content":{"rendered":"<p>The Government&#8217;s <a class=\"shortlink shortlink-66 shortlink-chref\" href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/bduk\" target=\"_blank\" rel=\"\" title=\"building digital uk\" data-chref=\"https:\/\/www.gov.uk\/guidance\/building-digital-uk\">Broadband Delivery UK<\/a> programme is close to securing a new approval from Europe for the use of state aid in their national roll-out of &#8220;<em>superfast broadband<\/em>&#8221; (24Mbps+) services, which has been stalled since the original umbrella agreement expired at the end of June 2015.<\/p>\n<p><!--more--><\/p>\n<p>Last month&#8217;s Autumn Statement 2015 (<em>Spending Review<\/em>) was notable for its absence of any serious commitment to expanding the reach of superfast broadband (<strong>24Mbps+<\/strong>) services to cover the final 5% of the United Kingdom.<\/p>\n<p>We had been expecting such an announcement since the summer when the Digital Economy Minister, <strong>Ed Vaizey<\/strong>, promised to make it &#8220;<em>absolutely clear<\/em>&#8221; where superfast broadband would be delivered (originally expected before the end of autumn) and he also pledged to publish a firm plan for reaching the final 5% &#8220;<em>before the end of the year.<\/em>&#8221; Neither have shown up.<\/p>\n<p>Instead we&#8217;ve been treated to talk of a vaguely defined <strong>Broadband Investment Fund<\/strong> for alternative network providers (<a href=\"http:\/\/www.ispreview.co.uk\/index.php\/2015\/11\/uk-gov-proposes-new-broadband-investment-fund-for-uk-internet-providers.html\" target=\"_blank\">here<\/a>), as well as the more positive proposal for a 10Mbps <strong>Universal Service Obligation<\/strong> (<a href=\"http:\/\/www.ispreview.co.uk\/index.php\/2015\/11\/government-unveil-10mbps-broadband-universal-service-obligation.html\" target=\"_blank\">here<\/a>) and most recently a short-term <a class=\"shortlink shortlink-119 shortlink-chref\" href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/satellite\" target=\"_blank\" rel=\"\" title=\"satellite\" data-chref=\"https:\/\/www.ispreview.co.uk\/broadband_satellite.php\">Satellite<\/a> subsidy to help cater for the old 2Mbps Universal Service Commitment (USC) that many may frown upon (<a href=\"http:\/\/www.ispreview.co.uk\/index.php\/2015\/12\/broadband-satellite-subsidy-expanded-to-300000-rural-uk-premises.html\" target=\"_blank\">here<\/a>).<\/p>\n<p>One of the reasons for the seeming lack of progress on the &#8220;<em>superfast<\/em>&#8221; front is due to the uncertainty of <strong>state aid<\/strong> approval. The original Phase 1 <a class=\"shortlink shortlink-66 shortlink-chref\" href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/bduk\" target=\"_blank\" rel=\"\" title=\"building digital uk\" data-chref=\"https:\/\/www.gov.uk\/guidance\/building-digital-uk\">Broadband Delivery UK<\/a> contracts (90% superfast coverage by 2016) were all covered by an umbrella agreement with the EU and nearly all of the Phase 2 (95% coverage) contracts fell into the same category, but this came to an end on 30th June 2015.<\/p>\n<p>The situation means that some outstanding Phase 2 contracts (e.g. Herefordshire, Devon + Somerset etc.), plus all of the potential model for Phase 3 (final 5%), have effectively been stuck in limbo while the Government attempts to negotiate a solution with the <a class=\"shortlink shortlink-101 shortlink-chref\" href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/ec\" target=\"_blank\" rel=\"\" title=\"european commission\" data-chref=\"https:\/\/ec.europa.eu\/info\/index_en\">European Commission<\/a>.<\/p>\n<blockquote class=\"bq1\"><p><strong>A Spokesperson for BDUK told ISPreview.co.uk:<\/strong><\/p>\n<p>&#8220;<em>We have been progressing a State aid notification with the Commission since June 2015. These discussions have been productive and we hope to publish our proposed approach in the New Year<\/em>.&#8221;<\/p><\/blockquote>\n<p>However achieving the new agreement is far from easy, otherwise it would have been completed sooner. According to a <a href=\"http:\/\/www.ispreview.co.uk\/index.php\/2015\/12\/still-waiting-to-tender-devon-and-somerset-phase-2-broadband-contract.html\" target=\"_blank\">recent speech<\/a> from <strong>Chris Townsend<\/strong>, CEO of BDUK, the road to approval has been a rocky one because the EU will require all suppliers to provide &#8220;<em>full open access<\/em>&#8221; (i.e. share cable ducts, masts, local loops) and that approval also favour &#8220;<em>small<\/em>&#8221; projects (i.e. encouraging smaller suppliers to bid). According to BDUK, the EC want to see procurements being as pro-competitive as possible, including considering size of interventions.<\/p>\n<p>The problem is of course that some of the most capable altnets, such as <a class=\"shortlink shortlink-40\" href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/gigaclear\" target=\"_blank\" rel=\"nofollow\" title=\"gigaclear\">Gigaclear<\/a> and <a class=\"shortlink shortlink-49 shortlink-chref\" href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/b4rn\" target=\"_blank\" rel=\"\" title=\"Broadband 4 the Rural North\" data-chref=\"https:\/\/b4rn.org.uk\">B4RN<\/a>, prefer to adopt a much more closed network model. It&#8217;s hard enough to build new infrastructure as a smaller player, without strict regulation making your efforts vulnerable to bigger competitors.<\/p>\n<p>On the surface this may sound similar to the original state aid agreement, but it appears to be stricter. Under the new state aid proposal even BTOpenreach&#8217;s network may not be considered open enough, which is despite the fact that they&#8217;re one of the most heavily regulated incumbents in Europe.<\/p>\n<p>Never the less BDUK believe they can reach a more acceptable compromise in time for the end of <strong>February 2016<\/strong> (we&#8217;ll keep an eye out for that), which will retain the required &#8220;<em>full open access&#8217; basis<\/em>&#8220;, but we&#8217;re informed by the Government that discussions around the exact access conditions are still being negotiated (subject to change).<\/p>\n<p>Even if an agreement is reached in February 2016 then the situation will still have created another administrative delay, which means that the remaining Phase 2 programmes probably won&#8217;t catch up with their own contracts until towards the end of spring. Meanwhile it will take longer before we know what model Phase 3 is to adopt, although this might be ready in time for the 2016 Budget.<\/p>\n<p>Credits to Patrick Cosgrove and BDUK for assisting with our research.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Government&#8217;s Broadband Delivery UK programme is close to securing a new approval from Europe for the use of state aid in their national roll-out of &#8220;superfast broadband&#8221; (24Mbps+) services, which has been stalled since the original umbrella agreement expired at the end of June 2015.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1],"tags":[471,85,38],"class_list":["post-10744","post","type-post","status-publish","format-standard","hentry","category-uk_isp_news","tag-bduk","tag-europe","tag-politics"],"share_on_mastodon":{"url":"","error":""},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - 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