Broadband News

Devon and Somerset running gainshare consultation

Connecting Devon and Somerset has a public consultation running on where it should be spending its gainshare money as a result of the phase one contract it has with BT. The consultation has two aims, learn about plans from providers in the area that cover the next three years and for members of the public to make sure that anomalies that they know about locally are conveyed to the team that might otherwise not be obvious. The consultation runs until 26th April and details including a long list of postcodes is on the CDS website.

The FAQ reveals that the £4.8m to £6.8m (upper figure represents an extra £2m that may be available once another check of the phase one take-up levels has took place) and that full fibre (FTTP) connectivity is what CDS is aiming to provide via a roll-out of native GEA-FTTP by Openreach.

The priority will be given to areas where connectivity is sub 15 Mbps currently and the usual value for money criteria, so the money might deliver 2,800 to 4,000 premises if cost to deliver is £1,700 but the number of premises could rise if small villages rather than more spread out premises are service, so maybe we could see an extra 7,000 premises.

For those passed by the phase one contract but distance to the cabinet means connections speeds remain under 15 Mbps even when you have upgraded to VDSL2 (FTTC) then you will still be considered in this roll-out.

Our map of the current Openreach FTTP footprint in Devon and Somerset has been growing steadily, with a mixture of finishing off phase one work and new premises being built with access to FTTP. Remember that Gigaclear has a number of contracts to deliver full fibre in the CDS area so those locations will be excluded, and similar for the AirBand fixed wireless contract areas.

Comments

@thinkbroadband Why is BANES and North Somerset not included?

  • @Somerset01
  • comment via twitter
  • 8 months ago

Good grief !! Saw this in the CDS FAQs:

"BT’s bid was based on a 20% take up level which has already been exceeded, with the current Take Up across the programme standing at 43%"

To say that's more grist to the mill that public money should never have gone in.... Takeup over double what BT told the Government its estimate was. Talk about cheap money for BT to build its infrastructure out.

  • mpellatt
  • 8 months ago

@mpellatt "Talk about cheap money for BT to build its infrastructure out." Hence the gainshare money which is being paid back by BT and being used for further expansion.

  • MCM999
  • 8 months ago


@MCM999 This misses the point that BT's network expansion would normally have been funded with risk capital. Being risk-averse, BT didn't seek this route. Instead, the expansion has been funded with taxpayer cash. I don't believe for one moment (knowing how competent Government's procurement "professionals" are) that the gainshare payback properly reflects the discounted additional future revenue accruing to BT from the excess takeup.

  • mpellatt
  • 8 months ago

Yeah - serious underestimate on the takeup.

However, if a competitor came in with a tender that assumed 43% in the first place, they'd have won by a country mile, being able to cover more premises.

Bid with too low a takeup estimate, and BT ran the risk of losing the bid. Bid with too high an estimate, and BT ran the risk of never breaking even. It's a fine balance.

The implication is that if BT were risk-averse, so was everyone else.

IIRC, phase 2 ran with higher estimates.

  • WWWombat
  • 8 months ago

As BDUK was a government initiative, they set the rules for the whole process. You can't blame a company for de-risking the process with more conservative assumptions, especially when the (as the NAO report stated), the downside was all on the supplier.

Of course it was always likely that the 20% target on phase 1 (the same assumption used in the commercial business case) was conservative, and it was upped on later phases. What the NAO also note, was that the vendor had to take the downside risk of future price regulation undermining the business case - which has come to pass.

  • TheEulerID
  • 8 months ago

"especially when the (as the NAO report stated), the downside was all on the supplier."

I thought that was the entire point of "partnerships" between the public and private sector - transfer of the financial risk.

Of course, that's a total fallacy as the risk of service failure, which would follow if the risk leads to failure, isn't transferable. See Carillion for the latest example.

  • mpellatt
  • 7 months ago

@mpellat

Tell me, how is the fact that it's ultimately the shareholders that will lose all their investment not carrying the downside risk? In this case, BT were contractually obliged to meet the targets whatever the cost to them.

As for Carillion, then that is a daft example. Carillion went broke, the investors lost all their money and the public sector picks another supplier (or runs it themselves). The only way that the public sector loses out is if the new contracts have to be placed at a higher price (which might have been the real economic one in the first place).

  • TheEulerID
  • 7 months ago

@mpellatt =not sure if you are aware of the contract mechanism - the money supplied from external sources in BDUK contracts only brings the business case back to the risk which the operator was prepared to take in commercial rollout. Even then if the take-up is better then the authority contribution is reduced, if the costs are lower then only the actual costs can be claimed

  • Gadget
  • 7 months ago

Ask again - Why is BANES and North Somerset not included?

  • Somerset
  • 7 months ago

Why is Bath and North East and North Somerset not in it, no idea, a question for the council.

  • andrew
  • thinkbroadband staff
  • 7 months ago

Not expecting a quick answer.

  • Somerset
  • 7 months ago

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