New BDUK Change Stalls Some FTTP Broadband Builds in Powys UPDATE

Residents in the rural Powys (Wales) village of Llangedwyn – including neighbours in Llanfihangel (and possibly others) – have complained after their long-awaited rollout of a new full fibre (FTTP) broadband network, which was due to be built by Broadway Partners, was put on hold due to the UK’s £5bn Project Gigabit scheme.

Network operator Broadway Partners (Broadway Broadband), which is being supported by an investment of £145m from London-based sustainable investment manager firm Downing LLP (here), currently has a number of gigabit-capable Fibre-to-the-Premises (FTTP) builds in rural parts of Scotland and Wales (i.e. they’re aiming to cover 250,000 UK premises by around 2028).

Many of their builds are being part funded by the Gigabit Broadband Voucher Scheme (GBVS) under the UK Government’s Project Gigabit programme, which is being overseen by the Building Digital UK (BDUK) agency. The same project also includes a major Gigabit Infrastructure Subsidy (GIS) programme, which awards contracts to network operators that can extend gigabit services to large numbers of premises.

One difficulty with the GIS and the GBVS is that they tend to focus on the same rural areas and so, in order to reduce conflicts and avoid duplicating the public investment (i.e. protect taxpayer’s money), voucher schemes that are still being developed often get disrupted (shelved/delayed) during new GIS related contract procurements. We’ve covered various examples of this over the past couple of years.

The aforementioned approach is necessary to help build up a stable picture of coverage and eligibility in each area, although there are such things as ‘Voucher Priority Areas‘ that can be used to avoid related voucher projects stalling – this applies to active projects that are in delivery at the time of the pause, as well as any projects which are at an “advanced stage of planning“.

What’s happening in Llangedwyn?

Residents in the village and surrounding areas had long been trying to get Openreach to bring fibre broadband infrastructure into the area, albeit without much success. But in 2021 it appeared as if Broadway Partners, which at the time had connected 30 properties in nearby Bwylch Y Ddar and were looking to expand, would be able to solve the problem.

Development of the project began soon after that, although progress is known to have been slow. Nevertheless, residents were left in a state of shock when they were informed, on 18th May, that Broadway’s planned FTTP rollout in Llangedwyn, and the neighbouring Llanfihangel community, had suddenly gone into limbo.

“The reshuffle of vouchers is a disaster for rural community like ours. Everything agreed, surveyed ready to go and now cancelled because of the new BDUK rules. What a comedy show,” said Steve, a local resident. The Llangedwyn Community Broadband Scheme similarly noted: “Aled Davies our County Councillor was at the meeting and was stunned by the news, and has promised a meeting with our MP, Craig WIlliams. Craig is Parliamentary Private Secretary to the Prime Minister, and it is important that we make him aware of the advanced stage of our project, which, if abandoned, would leave our communities as fibre orphans.”

Broadway’s Letter to Residents

We understand everyone is waiting to hear the latest information regarding your project and build status in your area. We’ve had to delay updates to progress lately due to us working through a significant issue that has arisen which we now have a full understanding of.

Your full fibre project is now likely to be within scope of the Welsh wide procurement exercise, run by UK Government via BDUK. What this means is that instead of providers like Broadway delivering multiple small projects, these projects have been collated into ‘procurement lots’, covering larger geographical areas. BDUK will then be asking companies to tender for these.

As a direct consequence of this decision, we have had to stop any further work whilst the tender process gets underway. Having already designed and in many cases started to build the network, we will of course be tendering for this work. However, the time scales for the tender process are yet to be confirmed but are expected to start in Summer 2023.

While we acknowledge we have been slow to deliver your full fibre network, we had begun to catch up on lost time and have already spent a significant amount to get to this point. Therefore, we have asked that your project be re-issued as a voucher protected area, meaning it would be removed from procurement. This request is under consideration, and we have fortnightly updates with BDUK and will continue to push this. It goes without saying that we’ll update you the moment we hear any news.

We are so sorry to have to give you this update but and we hope very much to be able to return and carry on our work to bring future proof, full fibre broadband to the areas of Wales that need it most.

The Co-Founder of Broadway Partners, Michael Armitage, told ISPreview that – alongside the communities – he was “obviously disappointed” that “a number of our projects have been included in the BDUK procurement process” and understood the impact that any delays would have on those concerned.

“We continue to lobby the Government to have projects taken out of procurement where we can deliver more quickly. Failing that, the tender process for the affected project areas in Wales is expected to begin later this year, and we hope that Broadway will be one of those responding,” added Michael.

The difficulty for Broadway is whether or not those larger contract LOTS are going to be too big for an operator of their size to bid on. At the time of writing, we don’t know exactly which procurement process is being adopted by BDUK for this area, as there are several different types.

However, Powys County Council (Croeso i Wefan Cyngor Sir Powys) did recently complain about BDUK’s plan to “designate all of Mid Wales as a Category C procurement area” (here), which they fear “could potentially exclude many Broadband Alternative Network Providers installing broadband schemes in the county, leaving only the largest providers capable of installing ultrafast broadband.”

Type C procurements reflect the Cross-Regional Single Supplier Framework (details), which is intended to target premises that are unsuccessfully delivered either via the usual Type A and B procurements. This may happen if, for example, no or no appropriate market interest has been received for Type A and B procurements. But the wide expectation is that only larger operators, such as Openreach or nexfibre (Virgin Media), may be able to bid on Type C.

At the same time, the Welsh Government are also known to be separately exploring a new £70m procurement, which could be used to help upgrade broadband for 84,000 premises (i.e. those that can’t yet get “superfast” speeds of 30Mbps+) in hard-to-reach rural areas (here). But little is known about precisely how that would work and where it would focus.

However, given the seemingly “advanced” stage of Broadway’s work, the hope is clearly that BDUK may be able to designate it as a Voucher Priority Area. ISPreview did seek a comment from BDUK in the middle of last week, but we’re currently still awaiting their official reply.

UPDATE 2nd June 2023

The announcement on 31st May 2023 that Broadway Partners had gone into administration adds an extra bit of context to the situation above (here), but we’ve also now had a response from BDUK via DSIT.

The department confirms that the story above only relates to the pause on vouchers introduced as a result of changes to Project Gigabit’s procurement process (i.e. the move to focus on ‘procurement lots’ covering larger geographical areas, as opposed to targeting individual providers who can deliver multiple small projects), although all of this may now be academic given the uncertain status of Broadway itself.

A Department for Science, Innovation and Technology spokesperson said:

“In early-2019, Wales’s gigabit broadband coverage stood at under 7%. This figure now stands at 62% – a huge improvement in a short space of time.

The government is moving forward with a £5bn programme across Wales and the rest of the UK, with a new phase of the project now underway. Project Gigabit will make sure hard-to-reach communities have access to the high-speed connectivity they need to benefit from the economic opportunity technology brings.”