The Gainshare sum is part of the BT contract held by CDS. Future ‘clawback’ sums will be invested through an open and competitive process. The Gainshare sums will deliver a wholesale open access network, which will be available to other retail service providers not just BT retail.
Take Up levels on the BT contract have exceeded the base set by BT in their bid of 20 %. This means that less subsidy should have been needed to support the delivery of the contract. The contract sets out a process for a rebate from BT known as ‘Clawback’. BT have chosen to provide an advance against these sums known as ‘Gainshare’.
The contract held with BT for phase 1 is based on a gap funded model, where public subsidy is used to fund the gap between what the private sector believes the cost of delivery to be and what they are prepared to invest from their own resources. Part of the decision on the level of investment from the supplier is based on the baseline and forecasted levels of take up and revenues generated by the supplier. Where this baseline is exceeded, a clawback provision was set out in the contract for excess subsidy to be paid back to the local body. This “Clawback” is calculated at the end of the deployment phase of the contract (years 1-3) and then subsequently every two years, with a final year calculation.
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%. BT chose to make an early offer to each local body up to an agreed value of £129m across the UK against the future pot of clawback owed to each local body. In the case of CDS the confirmed amount offered is £4.8m based on the Total Homes passed and Take Up levels for the programme in March 2016. This early clawback is Gainshare.
CDS is seeking to deliver a wholesale FttP solution.
CDS have a confirmed Gainshare sum of £4.8m from BT. BT calculated this based on 30% take-up for the build completed by June 2014 for the full duration of the contract. There is the potential to increase this by a further £2m dependent on a take-up review, giving a potential total of £6.8m for reinvestment in coverage.
CDS must first confirm the areas which do not have Next Generation Access (NGA) broadband infrastructure delivering at least 30Mbps, or where there are no credible and declared commercial plans over the next three years. These are described as “white NGA areas”. This will be carried out in the form of a public consultation and its purpose is to enable all interested stakeholders – the public, businesses and telecommunications providers – to comment on the proposed white NGA areas before further coverage is committed. Once these areas are confirmed, in line with European State Aid regulations, only current white NGA postcodes which were in existence pre-2012 will be considered for Gainshare. The limited Gainshare funds available will be sufficient to provide a superfast service to a portion of the identified white NGA, pre-2012 postcodes. Therefore, though 30Mbps is considered the minimum speed for a superfast service, CDS has chosen to focus on delivering to communities which are receiving a significantly slower connection speed of sub-15Mbps. CDS will work to target those communities with sub-15Mbps speeds and a significant degree of social deprivation.
An area is considered socially deprived if residents have exceptional difficulty accessing public services or other societal benefits. Societal benefits would include employment, education, reasonable income levels, quality housing, good health, and low crime rates.
Social deprivation is measured using the English indices of multiple deprivation (IMD). Please find a link to more information on the IMD here: https://www.gov.uk/government/statistics/english-indices-of-deprivation-2015.
CDS has recognised an opportunity to work to alleviate the extent of social deprivation in areas of Devon and Somerset. By increasing broadband connection to areas with high social deprivation we can work to reduce digital exclusion in these areas, spurring local business development, and creating access to employment & training opportunities. With limited Gainshare funds available, considering the degree of social deprivation in an area is a meaningful way of deciding where to direct spending for maximum public benefit. Value for money will also be considered in determining the final agreed deployment plan.
Yes. 4G and satellite technologies are not recognised NGA compliant solutions. Premises will be assessed for Gainshare funds based on the speeds they receive over NGA compliant networks. NGA technologies are defined by European Union regulation as “wired access networks which consist wholly or in part of optical elements and which are capable of delivering broadband access services with enhanced characteristics (such as higher throughput) as compared to those provided over already existing copper networks”.
CDS has adopted an approach of supporting those areas with the poorest levels of speed. These areas tend to be in the hardest to reach parts of Devon and Somerset and are least likely to benefit from a commercially delivered solution in the near future. The approach to target investment predominantly in these areas continues to support this strategy. Whilst the Government has made a commitment to deliver a Universal Service Obligation where people can request a 10Mbps service, there are no firm plans to deliver this or clarity on how it will be funded or launched leaving these areas with no certainty of improved broadband. Until the Gainshare consultation process is complete, and CDS and BT have agreed the final solution, CDS cannot confirm the exact communities that will benefit from 30 Mbps connectivity. There may be an element where areas with higher current speeds but below 30 Mbps benefit due to the technical design of the solution.
The consultation will run for a minimum of a calendar month. Its purpose is to test that CDS has identified accurately commercial operator plans through its regular review of these proposals. Members of the public, businesses and other stakeholders are also able to provide comments on the consultation through the CDS website. The final agreed solution will seek to demonstrate value for money as well as supporting the priorities to support areas with the lowest speeds and within areas of deprivation. Unfortunately the level of available investment is not able to cover the whole of Devon and Somerset and CDS are keen to work with communities to consider other options and solutions.
PUBLIC CONSULTATION & TIMELINE
No. The available Gainshare sums are not sufficient to upgrade every premise in the consultation area.
Premises not included in the defined consultation area are believed to be either in a commercial operator’s declared plans, or may be within a publicly funded contract already. If you believe you do qualify and are not in the defined consultation area please respond to the consultation with your reasons.
The consultation went live on the website on the 26th March. The consultation process will run for a minimum of one month, and so currently concludes on 30th April.
Indicative timescales suggest the target areas for Gainshare will be agreed by late 2018.
At this stage the timescales for the new deployed services are unknown and not agreed. As soon as the deployment plan is approved this will be communicated through the CDS website and other communication channels. An estimated timescale for the plan will be included as part of this, in agreement with BT. It should be noted that timescales will remain indicative until survey and initial engineering work begins, and will be subject to change. CDS will endeavor to update on changes to the planned deployment working in partnership with BT.
Having been included in the Phase 1 rollout will not exclude a premise from benefitting from Gainshare. Where the download speed remains below 30Mbps and where there are no credible and declared commercial plans. CDS are targeting areas below 15 Mbps in areas of significant deprivation. Until the Gainshare consultation process is complete, and CDS and BT have agreed the final solution, CDS cannot confirm the exact communities that will benefit from 30 Mbps connectivity. There may be an element where areas with higher current speeds but below 30 Mbps benefit due to the technical design of the solution.
Not necessarily, as your property may be included in a declared commercial plan. Only properties not included in the Phase 2 rollout are being considered for Gainshare. However, not all properties that aren’t targeted under Phase 2 will benefit from Gainshare. To find out whether your property has been included in the Phase 2 rollout search your postcode using our coverage checker: https://www.connectingdevonandsomerset.co.uk/.
Our Broadband Voucher Scheme:
The Voucher Scheme is currently paused to applications. However, we expect to relaunch this soon. This may provide an interim solution for a home or business. CDS will also be seeking other solutions and funding opportunities to address its ambition to secure superfast coverage for the whole area, including encouraging commercial investment, considering the investment of future ‘Clawback’ sums and options for community solutions.