Broadband Delivery UK (BDUK) is responsible for delivering the Superfast Broadband Programme. This is on track to provide 95% of homes and businesses in the UK with access to superfast broadband by 2017. And thanks to the additional investment available from the contractual gainsharing arrangements, BDUK expects to be able to extend coverage to a further 1% of the UK by 2020. In addition, key suppliers (BT Openreach and Virgin Media) have announced significant new investment in commercial rollout.
BDUK also recognised the need to look for ways to meet the demand for superfast broadband services in the hardest to reach and least commercially viable parts of the UK. It therefore commissioned seven Market Test Pilots to run from June 2014 till March 2016 with a budget of £8 million. The Pilots were set up to look at different ways to deliver superfast broadband in some of the UK’s most sparsely populated rural areas, to test alternative technologies and commercial and operational models, and to better understand the capabilities of alternative suppliers to BT Openreach and Virgin Media.
The seven Pilot projects include Avanti and Satellite Internet, who are using superfastcapable satellite; Airwave, Quickline and AB Internet, who are using fixed wireless; and Call Flow and Cybermoor, who are using a mix of fibre and fixed wireless technologies. The Pilots have now been running for over a year and are successfully providing good quality superfast broadband services to some of our more remote households across the UK.
BDUK and the Pilot suppliers have systematically evaluated progress at every stage of the project, generating new information about how to design and deliver the infrastructure to support superfast broadband services in these areas. We have also been asking the customers for their views. On the basis of this information, the Pilots have shown that:
- Non-fibre based technology suppliers can deliver reliable, superfast-capable broadband speeds and a quality of broadband service that satisfies the vast majority of customers. All of the technologies being used, including satellite and fixed wireless, have demonstrated that they are capable of providing superfast speeds. Initial feedback from customers revealed that most were positive about their new broadband service. The satisfaction rating was consistently high across fibre, fixed wireless and satellite technologies.
- Suppliers can successfully mix technologies to deliver cost-effective superfast broadband solutions in hard to reach areas. Call Flow and Cybermoor have mixed fibre (FTTP2 and FTTC3 ) and fixed wireless technologies to achieve very high coverage of hard to reach areas at relatively low public subsidy per premises. Call Flow, for example, will achieve more than 96% coverage of three entire rural exchange areas for less than £800 public subsidy per premise passed. Cybermoor, in an even more challenging rural area, will achieve 100% coverage in their area for £1,220 public subsidy per premises passed.
- Smaller suppliers can bid for, win and deliver open public procurements at competitive costs, including meeting the necessary EU-wide State aid requirements for receiving public funding. Eleven smaller suppliers have been contracted to deliver the BDUK Market Test Pilots and nine of the BDUK Superfast Broadband Phase 2 projects. Smaller suppliers are increasingly confident in their ability to provide services to the hardest to reach parts of the UK. Some are securing access to new sources of finance to do this. Connecting the most sparsely populated areas will always be commercially challenging; however, there is increasing investment in these areas. Infrastructure suppliers are likely to continue to require some public subsidy to deliver to these loctions.
There are now more than 40 smaller infrastructure providers in the UK, with 70% of these serving rural areas. Take up of superfast broadband services is increasing year on year and higher than the national average in hard to reach areas. The broadband market is growing rapidly, and even in rural areas suppliers are increasingly willing to invest, with some investing up to £1000 per premises passed if they can secure a 40-60% guaranteed service take up.
Communities can work together with suppliers to create viable commercial conditions for small projects.
- Creating a standardised offer for communities can make this easier. Key learnings have come from projects such as B4RN in the north of England, as well as the large number of less successful community broadband projects. Cybermoor has been looking at community funding models as part of their work in Northumberland and are developing standardised offer known as “Broadband in a Box”, which can be promoted to new communities interested in commissioning their own projects.
- Community engagement is most effective when an area already has a strong sense of identity, such as a village. A local champion can also provide impetus to support a project. Communities have generally engaged enthusiastically with the Pilots; however, the Pilots have shown that projects in sparsely populated areas do not always have a natural community to engage with, or can cut across communities.
New partnerships have been fostered, including with other network providers such as Janet , Network Rail Telecom, and new installation partners, which will lead to new opportunities to deliver services once the pilots have ended.
- The suppliers have all demonstrated flexibility and innovation to find ways to overcome barriers to delivery. These are all influenced by local circumstances and have ranged from small, beneficial deals with landowners on wayleaves or equipment to new relationships between suppliers and public sector infrastructure owners such as Janet, Network Rail Telecom.
- New commercial relationships have also emerged which are likely to be sustained after the Pilots end. For example, Call Flow and BT Openreach have worked together to trial the deployment of new cabinets at locations requested by non-BT suppliers. If this new sub-loop unbundling product proves viable, it could provide significant new cost-effective FTTC opportunities for suppliers in hard to reach areas.
- Local Authority support for a project can really drive successful delivery. Their support can help suppliers across a range of areas, including funding, planning permissions, community engagement, local marketing and political support.
- Compared to the majority of the UK, customers of the Pilot suppliers have had a limited choice of Internet Service Providers (ISPs). However, several of the suppliers are investigating wholesale open access platforms that would offer greater ISP choice and potentially enable partnerships with top-tier ISPs at scale.
The flexible and bespoke delivery models suppliers have used on these small projects has not yet been proven on a larger scale
- The flexibility that smaller suppliers offer has yet to be proven in large scale projects. Some might need to adapt their design capacity and business models if they wish to grow their capacity in rural areas.
- However, we are already seeing increasing interest from smaller suppliers in bidding for future BDUK contracts.
BDUK is now discussing with suppliers how to ensure the long term sustainability of their projects and build momentum after completion of the Pilots, particularly in the most rural areas. BDUK will publish a final report later this year. Meanwhile it is already promoting the emerging findings, especially the benefits of working with smaller suppliers, within government and the commercial sector.
From "Emerging Findings from the BDUK Market Test Pilots", Department for Culture, Media & Sport