Broadband News

North Skye Broadband backs out over State Aid problems

18 months of frustration and effort by North Skye Broadband and the hopes of a full fibre community network appear to be dashed for those on the Isle of Skye that were not likely to see VDSL2/FTTC via the BT/Scottish Government projects.

A press release from North Skye Broadband cites that it will no longer be progressing an application for State Aid from BDUK and Community Broadband Scotland. The complexity of having already having to undertake two consultations and reported difficulties with the Open Market Review where North Skye Broadband say that time was wasted waiting for more accurate information existing plans with apparently many postcodes with 30 to 40% error rates.

NSB has, from the very start, planned for this to be a community-owned network, broadly following the approach taken by Broadband for the Rural North, a very successful community benefit society operating in the North of England. By minimising costs and utilising community resources wherever possible – including, for example, seeking free wayleaves from landowners to lay high-capacity optical fibre across their land to establish the long-distance “backbone” network – NSB is seeking to narrow the “digital divide” caused by operators only offering high-speed broadband in denser urban areas and ignoring the needs of fragile rural communities, where many residents and businesses only have the choice of inferior broadband via obsolete technologies, or (often) no Internet connection at all.

It has been clear to NSB throughout that a wireless-based trunk network is wholly inappropriate for our needs. Not only does the harsh environment on Skye present challenges to the erection of masts and aerials, but HIE’s own figures demonstrate that even if such a scheme can be profitable, the business case simply does not generate sufficient surplus revenue to finance the technology refresh that will inevitably be needed to meet the everincreasing demand for bandwidth. The existing State Aid schemes are not fit for purpose because they are designed to support the provision of as many wireless networks as possible, as cheaply as possible, and as quickly as possible.

The State Aid rules also require that such networks should be “future-proof”, but in our opinion they are clearly anything but. Ironically, until the Chancellor’s 2016 Autumn Statement and the establishment of the Digital Infrastructure Fund, BDUK would not approve any State Aid application that specified optical fibre as the network medium. Now, they are crying out for commercial providers to build fibre networks, but continue to refuse to fund community-owned networks.

Geoff Semler, Chair of NSB (North Skye Broadband)

The final paragraph is a little odd, since full fibre operator Gigaclear has now won a number of local authority contracts under the BDUK umbrella and in Scotland even BT has areas lined up for full fibre (GEA-FTTP) roll-out as part of the two projects running in Scotland.

The battle between commercial and community operators thus seems set to continue, the rules around State Aid are incredibly frustrating for the community operators, but many decades of public procurement scandals across many countries are what has produced them, and they exist to try and avoid the creation of white elephant projects that line a few peoples pockets with profits. The downside is that it makes applying for Government funding more complex and can add to the overall cost of a project.

All is not lost there are hints of a small 50 premise demonstrator network which is in the planning stages and is advancing in co-operation with a private sector partner, so in time this may bear fruit and might even be used to make the case for public money to expand further.

B4RN is the community broadband scheme that many aim to emulate and they have been incredibly successful but reproducing this is likely to reliant on getting a core of people as dedicated as Chris Conder and Barry Forde who will work hard to overcome obstacles and are able to win over lots of community support. Perhaps a key component is that while frustration is often sounded at the lack of public money to help them, they've never let that stop them and have ploughed on.

Our maps show the problems facing those on the Isle of Skye (orange under USO, red, yellow, green are VDSL2 speeds) in that while VDSL2/FTTC is arriving in the more populated areas that there are many postcodes with premises that are still under 10 Mbps (and most of these are under 2 Mbps too) for fixed line services.

Satellite broadband does fill a gap in the broadband circle but as usage levels increase it is becoming more expensive to use, or restrictive, in time once low earth orbit (LEO) clusters are in place and operational this may improve since the lower orbit will mean much better latency and bandwidth availability may improve, but for people wanting better broadband yesterday saying something is on the way is unlikely to calm people down.


50 premises

  • Thumper
  • over 3 years ago

"The final paragraph is a little odd, since..."

Those companies probably didn't SPECIFY that their core network would comprise fibre. We didn't want to waste anyone's time and effort by pretending that bidders could use a wireless delivery network, but BDUK blocked specifying fibre. "You can't blackmail an honest man", but all bar NSB were happy for £47,000 of taxpayers' money to go to the private companies providing consultancy services to put together a State Aid application for a 15/30/30 superfast network, even though everyone knows such a network is not "future-proof".

Enough said.

  • NorthSkye
  • over 3 years ago

@NorthSkye - not sure what you are saying. BT have a lot of fibre in their "core network" and won many bids. But then you start to talk about bidders using wireless - what has that got to do with them blocking fibre? Can you point to the BDUK documentation/policy that says providers couldn't use fibre or was this part of a specific bid?

  • ian72
  • over 3 years ago

It's a sloppily worded sentence by North Skye. What I suspect they meant is that BDUK would not provide funding for any project where the ITT requirement specified the network must be fibre as the tenders are meant to be technology neutral.

It's clearly nonsensical to say that BDUK won't approve spending on fibre networks and the claim that Gigaclear and BT wouldn't have specified the technical nature of their networks as NorthSky claims is clearly ridiculous.

That the BDUK process doesn't support community-owned networks, except as bidders is surely the key point.

  • TheEulerID
  • over 3 years ago

@TheEulerID - Re 2ndpa ragraph... it would be "nonsensical" and "ridiculous" but I didn't say either of those things. However, I agree with the 3rd paragraph whole-heartedly.

@ian72 - The relevant document is: "2016 National Broadband Scheme - State Aid that Guidance - Overview of the Scheme", available from Gov.UK, and the EU document dated 26/5/2016 confirming the Scheme complies with Article 108 of the Treaty on the Functioning of the European Union. BDUK stated the NSB tender specification for bidders would not be approved by the BDUK National Competence Centre because it required FTTP.

  • NorthSkye
  • over 3 years ago


Really? The following is a quote from your comment earlier

"Those companies probably didn't SPECIFY that their core network would comprise fibre."?

If that isn't a claim that BT & Gigaclear never made it clear their core network is fibre, then what on earth is it?

Also, "BDUK would not approve any State Aid application that specified optical fibre as the network medium" sounds a lot like BDUK won't approve network solutions which specify fibre when it's actually that the ITT requirement specification must be "technology neutral" and tendered solutions evaluated on their merits.

  • TheEulerID
  • over 3 years ago

Set aside sparring over precise wording, the point is that BDUK/DCMS will not allow the customer receiving BDUK money to specify (directly or indirectly) that FTTP must be provided but bidders for the contract can offer it.

The sad irony is that DCMS has simultaneously set up a digital infrastructure fund specifically to provide soft loans for "full" fibre. In addition, they offer a period of rates relief. Clearly this is state aid in any real sense of the term. The whole issue is largely an exercise in bureaucratic handwaving, mostly applied in a rigid and absurd manner.

  • gah789
  • over 3 years ago

From the suppliers point of view what is often not appreciated is that if the procurement process as well as the implementation is challenged and found in breach (remember also includes procurement process) then it is not the authority that has to pay back the money it is the recipient - something which tend to make potential bidders very cautious.

  • Gadget
  • over 3 years ago


As I pointed out. The issue is that the whole BDUK process was not set up to enable community provision. Community providers were essentially just seen like any other bidder for a contract. It was never set up to provide grants to community provision groups for whatever technical solution they favour.

I'm not sure what issues there would be with EU legislation over direct grants to community groups, but the BDUK programme was predicated on putting the downside risk on suppliers (which meant suppliers had to be financially sound and credible).

  • TheEulerID
  • over 3 years ago

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