Wales in negotiation for who pays to activate stranded broadband assets
Knowing what has and has been delivered via the BDUK projects is not always straightforward and it is taking the Welsh Assembly a number of months to determine with a high degree certaintity what has been delivered and which premises Openreach has invoiced for at a £300 each.
Julie James AM who looks after the digital infrastructure portfolio in Wales addressed the Welsh Plenary on 15th May and we recommend a read of the transcript where Julia James outlines three outstanding issues (jump to 17:45:38 in the transcript).
- Consideration for how Welsh Government can work with BT complete areas that have part build infrastructure e.g. fibre tubing coiled up on poles awaiting connecting together and fibre blowing and installation of splitters and manifolds. A decision on how to proceed is expected by end of May 2018.
- Work to go through all the invoices presented by BT in the last five years to clense and confirm the final premises count for those premises that gained access to 30 Mbps services via the projects intervention.
- Closure of the delivery phase means that the books can be balanced and there are several months work underway to ensure BT is not benefiting from any oversubsidy.
An very interesting point is the statement BT has delivered a significantly larger volume of premises than either party anticipated at the outset of the project, though no specific figures are given but this does have implications for what happens with the next phase which nominally has £80 million of funding available via three contracts. The nominal is because apparently around £62.5 million will go towards delivery of infrastructure via intervention, the other £17.5 million is being held back for use on bespoke community arrangements.
When the tenders for the next phase of work in Wales was announced there was in theory 88,000 premises split across three contracts covering North West Wales, East Wales and South West Wales. Our latest figures for Wales suggests 82,000 premises still only have access to a sub 30 Mbps option and this includes cabinets that only went live in April and scattered bits of FTTP that we are still spotting.
To outsiders it may seem simple to resolve the invoices against what has been delivered, but the complexities of some VDSL2 cabinets overlapping with Virgin Media cable access and what date the cabinet went live versus when cable broadband became available will make getting a 100% accurate figure difficult, add to this the fact that the number of premises is not static and over a five year period there will have been new premises added to cabinets originally delivered via the Superfast Cymru project. A major concern should also be what is the cost in terms of labour to re-check five years of invoicing and if as suggested some anamolies are only being made aware to the Welsh Government when they visit different areas paper based exercises may always have errors.
We're having a complicated conversation with BT around the connection of the stranded assets. There is a complex commercial—'negotiation' is the only word I can think of—going on about who should pay for them. So, BT have sunk an enormous amount of capital into the ground. They haven't got a penny from us for that, because they've over-bulked the programme. The conversation is: who should pay for the last bit of the connection? That's a complex commercial conversation that is ongoing, and as soon as we've reached the end of it, I'm more than happy to report it here in the Chamber. But I make no apology for the fact that, obviously, what I want to get out of it is the maximum number of premises for the least cost. So, quite clearly, where we're coming from is we want as many of those assets connected as possible for as little part of the gain share as is humanly possible.Section 503: Julie James AM addressing Welsh Plenary
The situation particularly around FTTP (full fibre) which saw a number of areas drop back from in construction to no plans is the most difficult for residents and businesses affected, hence why we have included the word for word quote. Clearly Openreach and BT have expended labour and resources if there are part built networks, so the question around who pays to finish it, or whether (if BT win the next contract for an area) these are given priority in the next contracts are open for debate.
On the size of what has been delivered we believe there are 3,238 VDSL2 cabinets (note: additional cabinets for capacity upgrades are not in this figure) that have covered some 685,000 premises attributed to the Superfast Cymru project and superfast (30 Mbps and faster) broadband is available to 93.2% (638,000) of these. There is the additional FTTP footprint to consider where across Wales as a whole we have 62,200 premises on our books but some of that will be commercial and for the overall figure there is the question of the 6.8% overlap with cable broadband to be taken into account.
If one works to the assumption of £300 per premise and we ignore the cable overlap and that some of the FTTP is commercial we get a figure of £210 million, which is very close to the gap funding total of £205 million talked about back in 2012, there was some additional funding added part way through the contract if we recall correctly to add to this. We suspect the public funding though for FTTP areas is going to be higher than £300 but this may be balanced out by the removal of cable premises.
|thinkbroadband analysis of Superfast, USC, USO and Full Fibre Broadband Coverage in Wales|
with national rural/urban split and two selected 'county' areas
figures 16th May 2018
|Area||% fibre based|
30 Mbps or faster
100 Mbps or faster
|% Under 2 Mbps download||% Below USO|
10 Mbps download
1 Mbps upload
|Under 15 Mbps download|
4.7% (all ISP)
|Urban Wales (66% of premises)||98.7%||98.1%||37.2%||
|Rural Wales (34% of premises)||94.1%||85.7%||13.0%||
|Urban Ceredigion (21% of premises)||96.9%||96.5%||1.9%||
|Rural Ceredigion (79% of premises)||86.5%||73.1%||21.6%||
Urban Powys (13% of premises)
|Rural Powys (87% of premises)||88.9%||76.4%||19.6%||19.6%||
The above coverage figures are unusual in that we have split out the rural and urban areas for a couple of areas of Wales, this is to help illustrate that coverage is far from uniform and for those in rural areas missed out by the initial contract the rural area figures probably give a better idea of the situation. In terms of full fibre KCom with its City of Hull Lightstream converage is leading the local authority race at 76.9%, but in terms of purely Openreach FTTP Cornwall is the leader at 32.7%, followed by Anglesey 17.8%, Powys 17.6% and Ceredigion 17.4% but Powys is almost double the premise count of the other two areas. As someone is bound to raise it there are also the London Borough of Waltham Forest is in there at 20.4% and Spelthorne District Council at 27.4% which is part of Surrey, but Spelthorne is not a county like the others and Waltham Forest is purely commercial footprint, so as always when doing 'best of' lists how you define the list is important.
Back in 2012 Powys and Ceredigion both had no superfast coverage and are now in the top 10 council areas in the UK for full fibre coverage.