Beyond Phase 2
If your home or business is not covered by our new contracts with Gigaclear or Airband what happens next? There may be other potential options:
Additional investment by CDS
The good news is that there will be more money in the future that CDS will invest to increase superfast broadband coverage.
This includes public subsidy returned by BT as a “gainshare” or dividend from increased customer take-up of internet services. The sums involved are likely to be millions of pounds which will buy a lot of additional coverage for communities currently without a service.
We are currently in discussion with BT about the final amount our communities and businesses can expect to benefit from.
To get the best use out of this extra money there are things we need to know.
Firstly, where and when the private sector is planning to spend more money on new broadband connections, such as fibre and wireless, in our region — we can’t spend your tax pounds subsidising broadband coverage if the private sector are going provide it – and secondly the detailed map and timetable for the new Gigaclear and Airband networks under our contracts with them.
Both companies are hard at work right now to complete their detailed mapping. We hope to have a much clearer picture by the autumn and we will keep you informed of developments.
Our Broadband Voucher Scheme
The popular voucher scheme is currently paused although CDS will honour any existing vouchers up to the end of September, 2017. Once we know what’s happening with future private sector plans for broadband coverage, what detailed coverage Gigaclear and Airband will deliver under their new contracts with us and what additional coverage the dividend from BT will buy, we will have a good look at whether we need to re-open the voucher scheme to help plug any remaining gaps in broadband coverage. Again, we will keep you informed of developments.
Local Full Fibre Networks – £200m national fund
The Department for Digital, Culture, Media and Sport has issued a call for expressions of interest in accessing funding for local full fibre networks. The deadline is 23 August. A full application process will open in the Autumn, though DCMS is looking to test a small number of projects starting in 2017. CDS will be registering an interest.
DCMS says it will be inviting bids from a broad range of local bodies for projects in their area that will stimulate commercial deployment of full fibre networks. Local authorities are encouraged to partner with other public authorities and across the widest possible geography to develop a bid using levers such as co-ordinating public sector demand, stimulating business demand, reducing cost of deployment.
It is interesting that there is increased competition from the commercial market to provide broadband solutions even in areas which up until now the market hasn’t shown much interest.
Suppliers may be willing to offer you access to fibre or a wireless network but at an additional price to you. But if you need a connection now and you don’t feel waiting to see what CDS may be able to provide in the future is right for you then talking to suppliers about a wholly commercial solution may be worth exploring.
In certain cases suppliers may be able to offer a commercial solution for your local community if there are sufficient people interested in paying for it. Make sure to shop around to see what the best deals are.
Digital Infrastructure Investment Fund – £400m national fund
This Government intervention is designed to improve access to finance for small full-fibre network builders, which find it harder to attract capital than Openreach or Virgin Media.
Traditionally in Britain, full fibre has been difficult to finance because the industry is relatively young and a lack of certainty around future demand makes investment hard to secure.
Government’s £400 million investment will be matched by private capital. The fund will be managed and invested on a commercial basis by private sector partners, generating a commercial return for the Government.
For more information:
Universal Services Obligation (USO)
The Government’s stated intention is that by 2020 every household and business will have “the right to request an affordable broadband connection, at a minimum speed, from a designated provider, up to a reasonable cost threshold”
The Digital Economy Act 2017 established the power for the Government to introduce a USO for broadband of 10mbps. But the Government hasn’t outlined how exactly a USO would operate or who will pay for the estimated £1 billion cost. The Government has said that it is keen for the industry to pay, but it hasn’t put forward any serious proposals at this stage. These details will need to be set out in secondary legislation.
Critically, the USO isn’t actually universal, as it will be subject to a reasonable cost cap. This exists currently for the USO for phone lines (phone lines costing more than £3,400 don’t need to be installed). Ofcom says that a reasonable cost threshold of £5,000 per broadband connection would leave around 30,000 UK premises left unserved.
According to reports in the BBC and The Guardian, BT Openreach has offered to invest £600 million to ensure 1.4 million rural homes have access to a minimum speed of 10Mb by 2020.
BT’s proposal does not, apparently, including any public funding. The Guardian says BT is proposing to recover its costs through higher charges to rivals such as Sky and TalkTalk, as well as BT’s own broadband unit, to use Openreach’s national network. The BBC says the costs would be recovered through customers’ bills.
Karen Bradley, Secretary of State for Digital, Culture, Media and Sport is quoted as saying: “We warmly welcome BT’s offer and now will look at whether this or a regulatory approach works better for homes and businesses.”
“Whichever of the two approaches we go with in the end, the driving force behind our decision-making will be making sure we get the best deal for consumers.”