What? Broadband Delivery UK ("BDUK") has released a report on lessons learnt from the Superfast rural broadband pilots in Cumbria, Herefordshire / Gloucestershire borders, North Yorkshire and the Highlands and Islands in Scotland.
So what? BDUK is a team with the Department of Culture, Media and Sport which was established to deliver the Government's broadband strategy. Its main role is to allocate £530m of funding to support superfast broadband in the "final third" of the UK in which it is not economically viable for private sector telecoms providers to roll out telecommunications networks capable of supporting superfast broadband. BDUK allocated funding to over 40 local authorities to support superfast broadband projects earlier in 2011.
The report contains some important messages for other regions that have been allocated funding from BDUK's pot but are yet to commence their superfast broadband procurement processes. However, the preferred BDUK funding model has been put into question lately in the press in light of BT's passive infrastructure access (PIA) product upon which non-BT suppliers under the BDUK framework are likely to rely.
Many of the key findings coming out of BDUK's report relate to the procurement process and what local bodies must do to ensure a successful outcome in their regional broadband projects. These include: the establishment of a project board to oversee the delivery of the project at a strategic level including a dedicated project director, a commercial lead, a technical lead and legal support; wide stakeholder engagement; demand stimulation (i.e. work to establish the likely level of demand); setting up data rooms for bidders; the need to coordinate projects with planning authorities; and the importance of a communications strategy for broadband projects. Local bodies will find the report a useful guide on what it needs to get their regional broadband procurements underway.
The report also demonstrates that BDUK's strong preference appears to be for local bodies to follow the investment gap funding model. This is what will be supported by the framework that is currently being procured by BDUK with suppliers. It has been used for three out of the four pilots, and it has also been used in local broadband plans for Wiltshire, Norfolk, Devon & Somerset, and Suffolk, which BDUK has approved to progress procurement through the BDUK framework.
The investment gap funding model appears preferable to local bodies (and to BDUK) because it leaves key risks with the private sector. Indeed, BDUK stated that joint venture models between the public and private sectors were not as widely favoured as the investment gap funding model because, under a joint venture, "the public sector has to commit to a degree of on-going involvement in the network with the associated higher levels of risk".
However, there remains a substantial question mark as to whether or not suppliers other than BT will be able to compete successfully in the 'mini-competitions' that will be undertaken using BDUK's investment gap funding framework. Geo Networks recently withdrew from the BDUK framework procurement due to problems with its business case. It maintained that it could not compete on pricing due to the restrictions in BT's passive infrastructure access (PIA) product, which suppliers other than BT are expected to rely on to install fibre-based access networks in rural areas. It will be interesting to see if other suppliers can find a way to compete effectively with BT where Geo Networks decided it could not.
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