{"id":21700,"date":"2020-05-09T00:01:14","date_gmt":"2020-05-08T23:01:14","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=21700"},"modified":"2024-02-23T15:27:52","modified_gmt":"2024-02-23T15:27:52","slug":"interview-scotlands-r100-boss-talks-future-broadband-plans","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2020\/05\/interview-scotlands-r100-boss-talks-future-broadband-plans.html","title":{"rendered":"Interview – Scotland’s R100 Boss Talks Future Broadband Plans"},"content":{"rendered":"

The Programme Director for the Scottish Government<\/a>’s \u00a3600m R100 (Reaching 100%) programme, Clive Downing, has kindly provided ISPreview.co.uk with some insight into their approach toward the planned extension of “superfast broadband<\/em>” into some of the hardest to reach premises across Scotland.<\/p>\n

At the end of 2019 nearly 94% of Scotland were able to order a fixed “superfast broadband”<\/em> network (30Mbps+<\/strong>) and gigabit-capable “full fibre<\/em>” (FTTP<\/a>) services reached almost 8% of premises (here<\/a>). Much of the improvement seen in superfast connectivity over the past few years has stemmed from the previous public and privately funded \u00a3442m Digital Scotland<\/a> (DSSB) project with BT<\/a> (Openreach<\/a>).<\/p>\n

By contrast the R100 project was first established as a follow-on programme to DSSB in 2017 (here<\/a>), which originally aspired to extend superfast broadband connectivity to 100% of Scotland by the end of 2021 (March 2022 as a financial year). Naturally this focused on the final 5-6% of premises, which mostly reflected those in harder to reach rural areas where commercial investment alone cannot reach.<\/p>\n

Sadly R100 suffered a number of delays during its procurement phase and the first of three contracts – for Central (LOT 2<\/strong>) and Southern (LOT 3<\/strong>) Scotland – were only awarded to BT<\/a> (Openreach<\/a>) last autumn (here<\/a>). The project then suffered another blow after UK full fibre ISP Gigaclear<\/a> lodged an unspecified legal challenge against the planned award of LOT 1<\/strong> (North Scotland) to BT<\/a> (here<\/a>), which remains on-going.<\/p>\n

On top of that an initial roll-out plan for LOT 2 and 3 has revealed, perhaps unsurprisingly, that the project will not achieve its original completion target of 2021 and is instead likely to continue building until the end of 2023 (here<\/a>). But on the positive side, most of what is now built will be 1Gbps capable Fibre-to-the-Premises<\/strong> (FTTP<\/a>) technology and so the longer wait should be worth it.<\/p>\n

One other thing that Scotland has got right is to give new fibre optic lines a 10 year holiday (relief) from business rates (here<\/a>), which is significantly better than the 5 year relief given by the UK Government. Crucially this is much closer to the long-term investment models that most full fibre operators need to follow (payback assumptions can be up to 15-20 years).<\/p>\n

Enter Clive Downing<\/strong><\/span><\/h3>\n

The man appointed to oversee the R100 programme is Clive Downing<\/strong>, who is also a Director of Independent Intelligence Limited<\/a>. Downing has been designing public sector broadband initiatives since before Building Digital UK<\/a> was created and has worked with the Scottish Government<\/a> supporting Digital activity since 2012.<\/p>\n

NOTE:<\/strong> Clive’s interview answers are his personal views and may not necessarily be those of the Scottish Government<\/a>.<\/div>\n

Clive’s background is in engineering and he’s also been involved with NYnet, the EU B3 programme, Bristol is open and IXScotland. “So, am I fibre purist? No, not as the only solution for good, usable broadband. However I firmly believe fibre is the future because investment is predicated on the low [operational expenditure] it enjoys, particularly for GPON<\/em>,” said Clive to ISPreview.co.uk while discussing the future of R100.<\/p>\n

According to Clive, there are now about 2.9 million premises in Scotland and about 250,000 of those cannot currently receive a superfast service. “Of these, there are about 100,000 that have commercial plans from a range of operators, large and small. This leaves 150,000 for the main intervention<\/em>,” added Clive. R100 is expected to fill most of this and then Clive envisages the UK’s future \u00a35bn scheme (here<\/a>) as helping to do the rest.<\/p>\n

We should point out that broadband is technically still the responsibility of Westminster (UK Government), although it’s not unusual for local and devolved authorities to contribute their own public funding to help major investment schemes to achieve a better result (this is true for most BDUK schemes across the UK too).<\/p>\n

Otherwise you can read our full interview below, which touches on various issues from the Gigaclear<\/a> case to overbuild and engineer shortages.<\/p>\n

NOTE:<\/strong> The following interview was conducted just before the COVID-19 situation became a national crisis.<\/div>\n

The R100 Interview<\/strong><\/span><\/h3>\n

1. The Scottish government recently introduced a 10 year relief on business rates for new fibre optic lines, which goes beyond the UK Government\u2019s previous 5 year relief and has been welcomed by broadband operators. <\/strong><\/p>\n

However, despite the improvement, many operators are still calling for a longer relief that would match their expected 15-20 payback forecasts for full fibre investment. Do you think Scotland has struck the right balance here and, if so, why?<\/strong><\/p>\n

ANSWER:<\/u><\/p>\n

Yes, I believe it has. The Scottish Government was careful to engage with industry about what the right approach is \u2013 and 10 years is a long time as part of any business case. Also there is a quid pro quo in that operators were asked to sign up to the Scottish Government\u2019s Full Fibre Charter. The scheme has had successes already with some new market entrants starting their deployment in Scotland and existing operators citing the scheme (in part) for allowing additional commercial expansion.<\/p><\/blockquote>\n

2. The Scottish Government has previously committed to invest \u00a3600 million into their Reaching 100% (R100) broadband roll-out programme. Can you tell us where all of this money is coming from by breaking the figure down by its sources (e.g. we know that \u00a321m is from BDUK etc.)?<\/strong><\/p>\n

ANSWER:<\/u><\/p>\n

That\u2019s quite straightforward – \u00a321m from BDUK, the rest from Scottish Government. As an investment gap funding initiative the operator will add to that amount also.<\/p><\/blockquote>\n

3. At around the same time as the R100 programme was starting to award its first contracts to BT (Openreach<\/a>), the new UK Government under Prime Minister Boris Johnson was proposing an additional \u00a35bn to help the final 20% of hardest to reach premises (mostly rural) gain access to \u201cgigabit-capable<\/em>\u201d broadband.<\/strong><\/p>\n

The PM\u2019s investment formed part of an overall aim to get every home covered by gigabit connectivity in time for the end of 2025. Arguably the existing \u00a3600m investment via R100 is already enough to do the vast majority of the job, although Scotland still seems set to gain a slice of the new \u00a35bn fund.<\/strong><\/p>\n

How much of that \u00a35bn do you think Scotland should receive and, once received, could it be used to replace some of the existing R100 funding sources or be put toward separate complementary projects?<\/strong><\/p>\n

ANSWER:<\/u><\/p>\n

There is some nuance here \u2013 R100 is a superfast programme and its intervention area is comprised of premises currently not receiving superfast. The 20% \u201cGigabit\u201d intervention will sit on both sides of R100 i.e. addressing premises that are both more and less remote.<\/p>\n

We are pleased that the outcomes of the two contracts we have awarded thus far for R100 have primarily been a full fibre deployment \u2013 which aligns with both governments\u2019 forward looking policies. This goes way beyond original ambitions. But isn\u2019t able to deliver 100% full fibre and contracts won\u2019t get to all premises. There will be large number of premises that can already access superfast but where there will be no commercial plans for full fibre. That is where new UKG investment will be important.<\/p>\n

As the R100 outcome was primarily FTTP<\/a>, that\u2019s\u2019 job done\u2019 for both Governments\u2019 objectives. As to how much to do the rest? Crudely \u201cas much as it takes\u201d.<\/p>\n

The UK government is currently designing the procurement approach and state aid regime which will channel the \u00a35Bn as subsidy into the market. We (Scotland) are inputting into that process with our experiences of reaching 100% and, as you\u2019d expect, designing an optimal scheme for Scotland. That\u2019s not just about commercial approach but also about tactical, potentially demand-led interventions that take over where gap subsidy no longer works.<\/p><\/blockquote>\n

Please flick over to page 2 for the rest of this interview..<\/p>\n


\n4. Keeping on the subject of that \u00a35bn investment, the UK Government has previously suggested that any funding supplied under their new gigabit programme may not go toward central devolved governments (possibly due to concerns about past delays).<\/strong><\/p>\n

Instead the funding could be either managed more directly (e.g. local authorities may have to bid for it from the UK Gov \/ DCMS \/ BDUK) or be generally distributed to local authorities for them to manage.<\/strong><\/p>\n

What approach do you think is best for Scotland and why?<\/strong><\/p>\n

ANSWER:<\/u><\/p>\n

This is really for politicians to sort out advised by their respective policy units. That said I\u2019ve worked in Scotland for a many years and seen at first-hand what has been achieved here. I firmly believe the excellent results of public sector investment in Scotland (nearly 950k premises connected via DSSB \u2013 out of 5.2m across UK) is a result of scale. Any telecoms investor will tell you scale is critical.<\/p><\/blockquote>\n

5. The R100 procurement and tender process covered three LOTS – LOT 1 (North Scotland), LOT 2 (Central Scotland) and LOT 3 (South Scotland). Excluding the issues with LOT 1 (covered below), what challenges did you have in awarding the other two LOTS and was there any concern over the fact that BT was the only bidder for those?<\/strong><\/p>\n

ANSWER:<\/u><\/p>\n

That BT was the only bidder statement is a bit misleading \u2013 we had three bidders for most of the dialogue process and the final tender process was started for all lots with two bidders \u2013 the BT bids for Central and South were created under competitive tension. It was only when no other bids were present when we \u201copened the envelope\u201d was it clear only BT had carried through to the end of the process for two of the lots.<\/p><\/blockquote>\n

NOTE:<\/strong> It was the Scottish Government who revealed last year, as part of their announcement<\/a>, that BT was the “only bidder<\/em>” for LOT 2 and 3.<\/div>\n

6. Initially it appeared last year as if BT had also secured the contract for LOT 1 (North Scotland), which we understand was the only LOT to see bidding from several suppliers (e.g. BT, Axione UK and Gigaclear<\/a>).<\/strong><\/p>\n

The project, which at this point was already running a fair bit behind schedule, then suffered a blow after Gigaclear lodged an unspecified legal challenge against the LOT 1 award. We\u2019re aware that you are unable to share any specifics about the case itself, but can you tell us at what stage the legal process is at, what you expect the next steps to be and when it might be resolved?<\/strong><\/p>\n

ANSWER:<\/u><\/p>\n

This is hugely frustrating for us we felt we had got such a great result \u2013 and you are right, I can\u2019t comment.<\/p><\/blockquote>\n

7. Looking more closely at the award of LOT 2 and 3, the vast majority of this build is expected to use \u201cfull fibre\u201d (FTTP) technology. Under LOT 2, of the eligible 55,000 premises, the contract with BT \u2013 alongside greater than anticipated commercial build \u2013 is expected to reach at least 47,000 premises or almost 87% of the original plan.<\/strong><\/p>\n

Meanwhile, in LOT 3, some 99% of the 26,000 eligible premises will be reached by the roll-out (only c.200 premises have been missed off). The proposal for the remaining premises is to offer a new voucher scheme (expected to be launched later this year), but do you think this will be enough to plug the areas missed under LOT 2 and 3 (many people aren\u2019t even aware when voucher schemes are introduced) or will the Scottish Government need to go further in the future (e.g. new contracts etc.)?<\/strong><\/p>\n

ANSWER:<\/u><\/p>\n

This is a good opportunity to clarify. There are now about 2.9 million premises in Scotland and about 250,000 cannot receive a superfast service (that\u2019s about 8%). Of these, there are about 100,000 that have commercial plans from a range of operators, large and small. This leaves 150,000 for the main intervention. Once we have a resolution for the North lot and finished detailed plan for Central, we will know exactly which premises will be not delivered to under the main procurement \u2013 hence which will need the voucher scheme \u2013 this will operate in parallel with main intervention.<\/p>\n

A feature of the procurement which supports effective planning is that it is defined at an individual premises basis. We know exactly which and where every premises we will connect is \u2013 and whether it will be connected by the main contracts or by our voucher scheme or where there is an intention to be connected commercially.<\/p>\n

We will assist operators accepting vouchers by providing tools that show where these premises are so that they can plan infrastructure build to groups of premises rather than individual premises. Within my team our deployment managers will work to manage the main contracts, optimise the use of vouchers on the ground and monitor\/encourage the commercial build we rely on to get to 100%.<\/p><\/blockquote>\n

8. The UK Government\u2019s new focus on \u201cgigabit-capable\u201d broadband, rather than a pure \u201cfull fibre\u201d vision for deployment, has opened up the possibility of other technologies being used to achieve the target (e.g. Virgin Media<\/a>\u2019s hybrid fibre coax, Fixed Wireless Access (FWA) and 5G<\/a> networks).<\/strong><\/p>\n

Do you think this is the right approach or should we in the UK be laser focused on a pure full fibre future?<\/strong><\/p>\n

ANSWER:<\/u><\/p>\n

As R100 is a superfast programme, any premises being served by a 30Mbps service is out of scope. That said most of the Gigabit access infrastructure in the UK is currently only offering ultrafast type services (max 300-ish Mbps download) which seems fast enough for most predicted home and SME use. So, am I fibre purist? No, not as the only solution for good, usable broadband. However I firmly believe fibre is the future because investment is predicated on the low Opex it enjoys, particularly for GPON.<\/p>\n

Virgin\u2019s investment in Gigabit Docsis<\/a> allows them to compete in the war of headline speeds, but I think as an industry we\u2019ve lost the argument with the consumer of speed over quality.<\/p>\n

Finally, on this point I\u2019d wager there is no CATV networks serving the 20% of premises in the 2025 target intervention area \u2013 though inevitably there is wireless which may be the only cost effective solution.<\/p><\/blockquote>\n

9. In keeping with the above, Ofcom<\/a> has begun to consult on some of the changes that might be needed in order to help facilitate investment in new full fibre and gigabit capable broadband networks. Many of the proposals relate specifically to Openreach, but some – such as migration processes for full fibre networks (moving away from copper), a new Dark Fibre product and regulation that varies by geographic area \u2013 may also affect other providers.<\/strong><\/p>\n

What are your thoughts on Ofcom<\/a>\u2019s proposals and do you think that they need to make any other changes in order to help the investment case and roll-out of such networks?<\/strong><\/p>\n

ANSWER:<\/u><\/p>\n

I\u2019m not sure this answers your question, but I think that access to infrastructure on a basis that works for the access seeker is essential. I\u2019m not just talking Duct and Pole Access [DPA \/ PIA] from Openreach \u2013 there are pervasive non-telecoms networks all over the country which could be used for telecoms – power, transport, water.<\/p>\n

This requires a joined up approach from the respective regulatory bodies and also a charging regime that recognises the challenges of geography \u2013 i.e. should an access-seeker pay the same charge for a piece of passive infrastructure if it allows connections to 5 or 500 premises?<\/p><\/blockquote>\n

10. Commercial competition between full fibre providers in urban areas has become increasingly aggressive. Indeed over the past few months we\u2019ve started to see more examples where three providers have all built networks in the same area (overbuild).<\/strong><\/p>\n

The Government\u2019s 2018 Future Telecoms Infrastructure Review made clear that “at least a third (with the potential to be substantially higher) of UK premises are likely to be able to support three or more competing gigabit-capable networks<\/em>.”<\/strong><\/p>\n

On the one hand this gives consumers extra choice and a better chance of getting a good deal. On the other hand locals suffer more disruption from multiple builds, while overbuild does little to improve overall UK coverage and can also make it harder for providers to attract investment by stretching the payback period \/ risk. What is your position on all this?<\/strong><\/p>\n

ANSWER:<\/u><\/p>\n

I\u2019m interested you use the term \u201coverbuild\u201d to describe what I would call competition at an infrastructure level which is good for consumers. My area of expertise tends to be for areas where there are no networks, let alone competition. For R100 we are dependent on commercial build for the vast majority of coverage and the UK Government expects 80% of Gigabit capable infrastructure to be delivered commercially.<\/p>\n

Existing and new infrastructure providers are finding their own areas of focus \u2013 targeting areas where they see an acceptable return. These cases are long term vehicles for private investment generally and there will be a natural distribution (I accept there will be some duplication\/competition). Within the programme we were very excited that, although Axione decided not to bid, they did see the commercial opportunity within Scotland and are deploying their own fibre network.<\/p><\/blockquote>\n

11. Fears have been raised from a number of quarters, including privately by some other ISPs, that the rush by various companies to build full fibre networks may be putting a strain on the supply of skilled engineers (i.e. demand outstripping supply). Is this a concern in Scotland too and, if so, what sort of impact can it have and what do you think needs to happen in order to resolve it (should the Government be making any changes to facilitate this)?<\/strong><\/p>\n

ANSWER:<\/u><\/p>\n

Yes, it is a concern we are managing. A key mitigation in Scotland is the fact that the DSSB programme has mobilised a large workforce based here and we are working to ensure this is kept fluid and will move forward onto R100 build.<\/p><\/blockquote>\n

12. The Government recently decided to ban Huawei\u2019s kit and services \u2013 as well as other high risk vendors (e.g. ZTE) – from being deployed into core UK broadband and mobile networks. At the same time they imposed a cap on the amount of non-core kit that could be deployed from the same suppliers.<\/strong><\/p>\n

What are your thoughts on this and do you expect it to have any impact on the R100 roll-out (BT has signalled that compliance with the new rules could cost them c.\u00a3500m)?<\/strong><\/p>\n

ANSWER:<\/u><\/p>\n

I\u2019m not particularly well sighted on the technical details of the UK Government\u2019s rationale for this. Though I believe the main concern is around core network technology and 5G<\/a> kit. With regard to R100 UKG requirements will be handled by BT.<\/p><\/blockquote>\n

13. Finally, is there anything else you\u2019d like to say or add about the R100 programme?<\/strong><\/p>\n

ANSWER:<\/u><\/p>\n

With regard to my role \u2013 it is fascinating and challenging in equal measure \u2013 which makes it hugely enjoyable. High value complex programmes which affect large numbers of people are not easy to get right \u2013 and we make a point of trying to do the best for most people. The hard bit is that it is not always possible to do the best for all people \u2013 although if you have a premises in Scotland you will be getting at least a 30Mbps broadband connection because of the programme.<\/p><\/blockquote>\n

We’d just like to thank Clive for taking the time out of his busy schedule, especially during the COVID-19 crisis, to answer our questions.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Programme Director for the Scottish Government’s \u00a3600m R100 (Reaching 100%) programme, Clive Downing, has kindly provided ISPreview.co.uk with some insight into their approach toward the planned extension of “superfast broadband” into some of the hardest to reach premises across Scotland.<\/p>\n","protected":false},"author":1,"featured_media":21730,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[2716,1],"tags":[474,471,55,56,69,38,89],"class_list":["post-21700","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-interviews","category-uk_isp_news","tag-bt","tag-bduk","tag-fttc","tag-fttp","tag-bt-openreach","tag-politics","tag-scotland"],"share_on_mastodon":{"url":"","error":""},"yoast_head":"\nInterview - Scotland's R100 Boss Talks Future Broadband Plans - ISPreview UK<\/title>\n<meta name=\"description\" content=\"The Programme Director for the Scottish Government's \u00a3600m R100 (Reaching 100%) programme, Clive Downing, has kindly provided ISPreview.co.uk with some\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ispreview.co.uk\/index.php\/2020\/05\/interview-scotlands-r100-boss-talks-future-broadband-plans.html\" \/>\n<link rel=\"next\" href=\"https:\/\/www.ispreview.co.uk\/index.php\/2020\/05\/interview-scotlands-r100-boss-talks-future-broadband-plans.html\/2\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Interview - 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