analysis

Does Gigaclear’s broadband win show new direction for BDUK?

Jennifer Scott
Ezine

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Rural broadband projects across the UK are in full swing with funding from central government and local authorities turning into fibre in the ground.

But every state-funded project had been awarded to telecoms giant BT, giving rise to criticism around a lack of competition and encouragement of a monopoly within the UK broadband sector.

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This week, one scheme was ready to shake things up. It was announced on 3 March that UK internet service provider (ISP) Gigaclear had won government funding to build and run a fibre to the premises (FTTP) network in the Oxfordshire Parish of Northmoor.

The area secured a Rural Community Broadband Fund (RCBF) grant from the Department for the Environment, Food and Rural Affairs (Defra) towards the end of last year. As a result, West Oxfordshire District Council ran an open procurement process to get ISPs bidding on the contract to serve around 500 premises.

Choosing Gigaclear over BT

Gigaclear being named the winner didn’t just pave the way for work to begin on the 1Gbps network for residents and businesses – work is due to complete in September 2014 – but also made the Northmoor project one of the first government-funded contracts to be awarded to a company other than BT.

We were informed from the start that, because of its location, the parish would be likely to fall outside the area covered by the BDUK subsidy

Graham Shelton, chair of Northmoor Parish Council

With the long distance from the nearest telephone exchange and 14% of residents unable to get broadband at all, it was clear the area was in need of help. But Graham Shelton, chair of the Parish Council, explained its remote location was working against it when it came to securing money from the main Broadband Delivery UK (BDUK) fund – provided by the Department for Culture, Media and Sport (DCMS) in partnership with local authorities and BT.

“We spoke to Oxfordshire County Council and were informed from the start that, because of its location, the parish would be likely to fall outside the area covered by the BDUK subsidy,” he said. “[But] that freed us to pursue other options.

“Our district council helped us finalise our RCBF bid and find a suitable provider through an independent procurement process, ensuring the community obtained a socially-inclusive service and good value for money.”

Matthew Hare, chief executive of Gigaclear, said he was “delighted” his company had won the contract and by working with the Parish had “come up with a solution that will work for residents both now and in future”.

Crossed broadband wires

This was not the first project Gigaclear had tried to embark on when it came to providing broadband to rural areas, even if it has been its most successful.  

The ISP had been deep into the planning stages of a similar scheme in Wiltshire late last year, without government funding, and had signed up more than 80% of the residents needed to make the project commercially viable.

However, after claiming to have been "reassured" that no public money would be going into these areas as part of BDUK, Wiltshire County Council then announced the villages set to be covered by Gigaclear were at the top of its list to be served by BT's network – the only firm to have been accredited to provide connections through the BDUK project.

Within six hours Gigaclear pulled out, saying it could not compete with a publicly funded scheme.

BT claimed it was down to Wiltshire Council when it came to deciding on the areas, saying it was “not for BT to comment on why these locations were included".

The controversy reflected a similar issue in Dolphinholme, Lancashire, where local internet provider B4RN – Broadband 4 Rural North – accused BT and the council of adding the area to its BDUK plans, despite knowing the smaller ISP was already well on its way to serving the residents.

Alternative providers like B4RN and Gigaclear have claimed the issue is around the transparency of plans at the local council level. Despite BT and the DCMS admitting to holding plans down to a postcode level of where the BDUK project is rolling out, few of the parties involved have been willing to publish them.

This, in turn, leaves smaller providers unable to apply for state aid for rural broadband projects as any crossover with an existing plan breaks European state aid rules.

But BT claimed this latest project in Northmoor showed such accusations were unfounded.

“The Northmoor project clearly shows that communities can ask their council about any local plans before pursuing RCBF funding, so claims that there has been a lack of transparency are wide of the mark,” said a BT spokesman.

BT concluded with a pointed statement aimed at critics of its dominance in the UK broadband market: “We hope that the prices and levels of service provided by Gigaclear in Northmoor can match the highly competitive market elsewhere in the UK. We also hope that Gigaclear will make it easy for other suppliers to use its network so that the people of Northmoor aren’t stuck with a local fibre monopoly.”

Transparency unveils a clear winner

Communication between Oxfordshire County Council and smaller district and parish councils in the region has obviously been a triumph in this case and allowed for a promising project to get off the ground with government backing.

Claims that there has been a lack of transparency are wide of the mark

BT spokesman

But the RCBF fund is a fraction of the BDUK pot – the latter of which has all been allocated to BT – and there is no proof this level of communication is apparent in all the other regions where local providers are trying to get funding to bring broadband to their most rural areas.

It will take more than one project to silence BT’s critics, and the speed in which the firm leapt on this announcement to try to prove its transparency has fuelled cynics of its BDUK participation further.  

But one thing is for certain: more broadband players in more rural areas can only be a good thing for residents and businesses desperate to get their hands on functioning, fast connections to the internet. Come September, Northmoor will be reaping the benefits.


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