Scotland’s R100 Broadband Contract Delayed Until End of 2019

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The Scottish Government’s Minister for Connectivity, Paul Wheelhouse, has confirmed that contracts for the £600m Reaching 100% (R100) superfast broadband project won’t now be signed until the “end of the year,” which suggests that the rollout may be unable to complete by the end of 2021 (March 2022 financial) as planned.

At present the existing £400m+ Digital Scotland (DSSB) project with BT (Openreach), which has been rolling out a mix of hybrid fibre FTTC and full fibre FTTP technology, is already very close to achieving nearly 95% coverage of “superfast broadband” (24Mbps+) but that contract is due to complete by September 2019.

The SG has thus developed the R100 follow-on programme to tackle that final 5% of predominantly rural premises, which raises the definition of “superfast” to 30Mbps+ and originally aimed to achieve near universal coverage by the end of 2021; or March 2022 as a financial year (here and here). In reality this probably won’t reach every single remaining property but it will take them a lot closer to universal coverage.

Under the original plan the first contract(s) were due to be awarded by the end of 2018 but this was later delayed and we were advised that the final bids for R100 would instead be submitted during January 2019, followed by a contract award in March 2019. This didn’t happen but an SNP backbencher, Stewart Stevenson MSP, has now managed to get an update from Paul Wheelhouse and it’s not good news.

NOTE: There are understood to be three “credible bidders” still involved in the R100 negotiations (originally it was BT, Gigaclear, Axione and SSE Enterprise Telecoms).

Paul Wheelhouse, Scottish Connectivity Minister, said:

“We are determined that R100 programme delivers the best possible value and benefit for Scotland and have designed a procurement process to achieve this. Key to doing so is to ensure a highly competitive process that results in the £600 million funding for this programme delivering on our commitment to provide access to superfast broadband to every home and business in Scotland.

The procurement has therefore been structured, following internal and external advice and statutory and regulatory requirements, with defined dialogue cycles and submission dates. An Invitation to Participate in Dialogue was issued last Spring which resulted in four bidders being short-listed. Following the initial round of dialogue, a request for an extension of six weeks was granted to enable bidders to prepare initial submissions. Subsequently, a complaint was lodged, by one of the bidders, with the National Competency Centre, (managed by the UK Government as State Aid leads) citing a breach of the Code of Conduct by another bidder. This was resolved satisfactorily but resulted in a necessary pause in the procurement with a corresponding six week delay.

Ahead of the next key milestone we were required to provide a revised intervention area (listing all eligible premises). This update was necessary to allow the final stages of dialogue to be based on the most up-to-date picture, taking into consideration commercial coverage plans and changes to planned Digital Scotland Superfast Broadband (DSSB) deployment. Additional premises were added back into the R100 intervention area, in part due to direction from UK Ministers that future Gainshare activity be focused on full fibre solutions. This resulted in greater than expected changes across the country; and bidders requested extensions to enable them to remain in the process and provide competitive bids. We considered these requests carefully and balanced the wish to adhere to our timetable against the risks associated with not allowing bidders more time and our determination to provide the best possible outcome for Scotland.

We have therefore provided the bidders with the extension sought, giving them more time to remodel their solutions. This will see the procurement timeline extended, with the appointment of a preferred bidder or bidders anticipated by the end of September 2019 with contract signature by the end of the year.”

The news probably won’t make the Scottish Government’s Rural Economy Secretary, Fergus Ewing SNP, terribly happy because he has previously pledged to quit if he couldn’t complete the roll-out project by 2021/22 (here). If contracts are signed at the end of 2019 then it’s hard to see how the SG could possibly achieve their 2021/22 target, unless they opt for a quick-fix by using inferior GSO satellite services for the most remote communities.

John Lamont MP told ISPreview.co.uk:

“Given the radio silence from the Scottish Government, this news isn’t much of a surprise, but it is still hugely embarrassing for the SNP. R100 has been touted as the solution for everyone in the Borders, but the reality has proved to be very different.

There are still far too many homes and businesses in the Borders struggling with a poor internet connection. The UK Government has provided more funding per head to Scotland than any other part of the UK for broadband, but the Scottish Government have failed to deliver on the ground.

This is exactly what happens when the Scottish Government stops focusing on the day job and it is people in the Borders who are set to suffer.”

In fairness Scotland, not unlike Wales, faces a difficult task because many premises in the remaining 5% live within some of the most difficult to reach areas (for civil engineering), particularly given the focus on expensive “full fibre” technology that takes a long time to deploy. Equally we suspect that Scotland could be running into the same problem as Wales (here), where making a viable subsidised model that normal commercial operators can support has become much harder (past a certain point it may simply be too expensive).

At this point it’s worth reminding readers that the responsibility for improving broadband in Scotland is reserved to Westminster. On the other hand it’s still fairly normal for other local bodies around the UK to contribute their own funding toward such efforts, which has helped to spread the coverage of superfast broadband much further than would have otherwise been possible.

In the meantime isolated communities will from March 2020 gain access to request the new 10Mbps+ Universal Service Obligation (USO), although most of that is expected to be delivered via EE’s 4G network rather than FTTC/P (full details).

On caveat is that “premises will not be eligible for a USO connection if they are included in a publicly funded broadband rollout plan within the next 12 months” and there may be some overlap while R100 sorts its plan out (i.e. once a supplier has been chosen then it often takes a little longer to finalise a rollout plan).

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