Dolphinholme debate raises questions over BDUK rural broadband funding

We examine how one tiny village in Lancashire has pitted BT, the government and alternative providers against one another

The village of Dolphinholme in Lancashire is a typical English country location. With around 150 houses, The Fleece Inn pub, a local school and a church, you may not think it could become the centre of a row about superfast broadband.

But arguments about the village between a small broadband provider, the government and BT are a prime example of the complex issues surrounding rural broadband roll-out and why BT has faced such vocal criticism from campaigners.

The wider county is home to a local internet provider called B4RN – Broadband 4 Rural North. It is a community project seeking funds from locals towards a 1Gbps fibre to the home (FTTH) network, which will be available to residents and businesses for a flat fee of £30 per month.

The organisation published its first plans in 2011, detailing the areas it wanted to target, and in November 2011 submitted an expression of interest (EOI) to receive government funding as part of the rural broadband community fund (RBCF).

To be eligible for RBCF funding under EU rules, the area B4RN was planning to cover could not be served by an existing commercial roll-out or by other government-funded schemes such as BDUK, the flagship scheme to bring superfast broadband to areas considered not otherwise commercially viable.

The Department for Environment, Food and Rural Affairs (Defra), which is in charge of the RBCF, wrote to B4RN in March 2012 deferring its application. It said there was a concern following Lancashire County Council signing a BDUK-backed contract with BT in early 2012 that covered some of the postcodes where B4RN was applying for funding – although neither Lancashire County Council nor BT would share said postcodes with B4RN – meaning funds could be duplicated and EU State Aid rules broken.

However, the game changed again in November 2012 when Defra wrote to B4RN to say the council had pulled out of those areas so B4RN's EOI had been endorsed with conditions.

Crossed wires

In B4RN’s initial 2011 plans, seen by Computer Weekly, Dolphinholme was one of the areas set to be covered. The plans detailed that works would begin in 2013 during the second phase of its project. 

There was still no clear data from BT or Lancashire County Council about which postcodes they would be building in, but with the reassurance from Defra and its plans having been in the public domain for almost two years, B4RN decided to begin its build.

Skip forward to January 2014. There had been hold-ups through the B4RN project due to terrible weather conditions, but the village of Dolphinholme was on track to getting FTTH, with the majority of digging completed and a working cabinet installed.

Dolphinholme may only be a small rural village, but questions over the funding of broadband projects have given rise to much debate about whether every side is playing by the rules

But residents – who had paid into the B4RN pot – noticed BT engineers in the village installing a cabinet. When questioned, the engineers revealed BT was planning its own FTTH roll-out in the village. The likelihood of this being part of the firm’s own commercial roll-out was slim due to the lack of return on investment, but in a meeting attended by a Computer Weekly source, the council was said to have told BDUK it was a private project, not supported by funds from BDUK.

When Computer Weekly contacted BT to check, the tables turned again. BT said Dolphinholme was part of its planned BDUK roll-out in partnership with Lancashire County Council and this had been in the public domain since the summer of 2013.

“Our fibre roll-out in the area should come as no surprise as our plans have been in the public domain for several months,” said a BT spokeswoman. “We have been fully transparent, while the council also provided B4RN with a map of our deployment plans for the area in October 2012.

"BT and Lancashire Council included the village in the plans for jointly funded fibre access following an Open Market Review (OMR) process conducted by the council. All interested parties had the opportunity to participate by submitting their commercial deployment plans, and the review concluded that Dolphinholme was not due to be covered by commercially funded fibre broadband. BT's roll-out in the area complies with State Aid rules."

In response, B4RN claimed the only map it received was “a crude sheet of A3 paper”, where the areas said to be covered were badly defined, with no information on what technologies would be used and what speeds could be expected. 

B4RN claimed the local council would go no further than saying it planned on covering 97% of the area, but with B4RN’s project being so small its postcodes could have fallen into the 3%.

Computer Weekly contacted the Department for Culture, Media and Sport (DCMS), which is in charge of the BDUK project, asking it to clarify the timescales.

The first response from DCMS said B4RN did not confirm its plans until November 2013 and the areas it wanted to build in did not include Dolphinholme.

Returning again to B4RN with this information, the company strenuously denied it. B4RN again provided its published plans from 2011 and claimed it took part in the meeting with the OMR team on 10 May 2012, and even though it had already shared the business plan with the council, emailed another copy to ensure it had it – a plan which clearly stated Dolphinholme as an area B4RN planned to serve.

Computer Weekly contacted DCMS again to ask if it needed to revisit its dates.

“We understand that the Dolphinholme area was not declared by B4RN as part of its project in response to Lancashire’s public consultation undertaken in December 2012 into January 2013, which led to BDUK’s conditional state aid decision in January 2013,” said a DCMS spokesman.  

“This conditional decision required Lancashire to undertake further work with B4RN to confirm its funded coverage plans, which it provided in November 2013. This was the basis on which our State Aid assessment was made for Lancashire. B4RN’s response did not include plans for coverage in Dolphinholme. Having conducted two OMRs, the county council is confident it has demonstrated a clear commitment to complying with State Aid legislation.”

In response, B4RN again claimed Dolphinholme had been part of the plans from the outset and had therefore been present in the plans provided in November 2013.

Bending the rules?

The local provider claimed this controversy will not stop its roll-out. It has the support of the village and is carrying on with its own money, so will deliver the 1Gbps speeds as promised. However, the confusion between all parties raises questions about the BDUK project as a whole.

A lawyer familiar with EU State Aid rules has seen all the documents and statements Computer Weekly has received, but felt unable to comment on the specifics of Dolphinholme.

However, he pointed out that if at the time the Lancashire County Council project was entered into there was existing planned commercial investment by B4RN, this would mean that Dolphinholme would not be a “white area” and therefore would not be eligible for funding under BDUK, and any such funding would be in breach of EU State Aid rules.

Lancashire County Council has since released another statement, again denying B4RN’s protestations.

“B4RN did not respond to either of the OMRs and all other operators which responded detailed Dolphinholme as out of scope for commercial investment plans,” it said. “Based on this market-led intelligence, the OMR determined Dolphinholme to be classified as ‘white’ under State Aid rules and therefore eligible for public sector intervention.”

UK telecoms regulator Ofcom said the situation does not fall into its remit and referred queries to DCMS for further clarification.

The European Commission, which makes the rulings on EU State Aid funding, has been sent copies of the various documents by Computer Weekly and said it would examine them. But no response is yet forthcoming because, as the Commission rightly pointed out, it is a complex scenario.

Dolphinholme may only be a small rural village, but the question marks over the funding of broadband projects and the confusion over the timelines have raised further questions about the complexity of the BDUK project, and given rise to much debate about whether every side is playing by the rules.

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