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Hopes of fibre broadband in Somerset and Devon being rolled out any time soon have vanished, thanks to CDS CANCELLING their contracts with Gigaclear.

Graham Long, BHPN’s broadband correspondent,has written to Devon and Somerset MPs and this is worth reading, CDS suggests none of this is their fault….

For the attention of Devon & Somerset MP’s:

Rebecca Pow MP, Neil Parish MP, Sarah Wollaston MP, Jacob Rees-Mogg MP, David Warburton MP, Sir Gary Streeter MP, Anne Morris MP, Sir Hugo Swire MP, James Heappey MP, Marcus Fysh MP

September 14, 2019.

Dear Member of Parliament,

On February 28th, this year, you put your name to a letter signed by Rebecca Pow MP and Neil Parish MP, calling on Liz Truss MP, Chief Secretary to the Treasury, requesting £18.7M of funding to Connecting Devon and Somerset (CDS) via DCMS and BDUK to be made available to CDS after 2020 and up until 2023 in order that CDS’s five delayed contracts with full fibre provider, Gigaclear, can be completed.

HM Treasury made the availability of this funding extension conditional on the monies being included in the 2019 Spending Review as set out on September 4 in the House of Commons by Chancellor Sajid Javid. Mr Javid made only one reference to broadband in his speech and it is not clear if this funding was included in the 2019 Spending Review.

This week however, all of this became academic when Devon County Council issued a press release on September 12, stating that CDS had cancelled all five of their Phase 2 rural broadband contracts with Gigaclear (See https://www.devonnewscentre.info/cds-ends-gigaclear-contracts/ ) . This comes after a year when CDS have withheld all funding for the five contracts from Gigaclear and no fibre roll out in the two counties under the five contracts has taken place.

The five Gigaclear contracts were suspended by CDS on September 30, 2018, because Gigaclear had failed to deliver the required number of property connections required by CDS by that date. At that time it was expected that a remedial roll out plan would be agreed in a couple of months. As of September 12 2019, no such plan has been agreed.

This is not the first time that CDS have abandoned procurement of the Devon & Somerset Phase 2 superfast broadband programme. It is in fact the THIRD TIME that CDS have abandoned their own procurement process for Phase 2. To make an error once can be considered a learning experience. To make the same error a second time can be regarded as a mistake. To make the same error a third time is generally regarded as incompetence. CDS is incompetent, and must not be allowed a fourth attempt to complete the Phase 2 rural broadband programme in Devon and Somerset. In the same way that the Head and Governors of a failing school can be replace by DfE experts, so CDS and the CDS Board now need to be replaced by DCMS/BDUK experts. The taxpayers of rural Devon and Somerset have no confidence that the current CDS Board and organisation can complete this programme on their fourth attempt. Needless to say, the overhead costs of running successive failed procurement attempts is taken out of the monies allocated to CDS by DCMS/BDUK to connect rural taxpayers.

Gigaclear yesterday stated on their website “Whilst we don’t agree with the termination we are disappointed for all parties that we are now unable to progress and are considering our future plans for the region”. This means that over 47,000 rural residents in Devon and Somerset are now back in the same position they were in, in 2012, when funding for Phase 2 was first allocated by DCMS/BDUK to CDS under EU State Aid rules, to complete the Phase 2 rural broadband programme by 2020. This is what has happened since:

  • Following the allocation of £26.75M to CDS for Phase 2 in 2012, CDS started their first procurement round, announcing an open market tendering process in Exeter on November 13, 2014. (Procurement round one)
  • In December 2014, CDS abandoned this open market tendering round after they learnt that BT Openreach (CDS’s Phase 1 supplier) would refuse to bid on an open market tender.
  • During 2015, CDS attempted to negotiate an exclusive Phase 2 contract with BT Openreach (Procurement round two), which CDS had the right to do because it would then become an extension of CDS’s Phase 1 contract with BT Openreach.
  • Late in 2015, negotiations between CDS and BT broke down with BT claiming CDS were not putting enough of the £26.75M into the contract and CDS saying BT were not prepared to put sufficient investment  into the programme.
  • By the time contract negotiations with BT collapsed in acrimony, CDS had exceeded the 2015 date for agreeing Phase 2 supplier contracts as set by the EU under EU State Aid Rules and DCMS/BDUK had to go back to Brussels to negotiate a new contract schedule for CDS with the EU. After Competition Commissioner Margrathe Vestager got involved, the EU did agree that CDS could run a third procurement round but they set special conditions as follows: (a) Superfast broadband had to be defined as 30Mbps, not 24Mbps as was the case for Phase 1 and all other Phase 2 county broadband contracts. (b) The contract for Devon & Somerset had to be divided into six contracts to encourage smaller suppliers, and (c) the required contract completion date of 2020 as set in 2012 had to still stand despite the fact that this would leave suppliers with must less time to deliver the programme than was previously the case.
  • On July 19, 2016, CDS held another “bidder day” in Taunton (Procurement round three) and at the end of December 2016 (five years after they were allocated Phase 2 funding), CDS finally awarded five of the six contracts to Gigaclear and one (North Devon) to Airband. All broadband property connections to be provided by Gigaclear would be full fibre with maximum speeds of 1,000Mbps up and down and both Gigaclear and Airband were given just three years to compete the contracts.
  • The five contracts with Gigaclear included a public subsidy of £31M from CDS along with an investment of £60.5M from Gigaclear to connect 47,810 properties in the two counties. Gigaclear further committed to invest another £67.3M to extend the publicly subsidised fibre network to connect another 43,000 premises in the two counties, making 89,810 property connections in total.
  • Laying underground fibre to 47,810 properties is by definition a major civil engineering project. The Institute of Civil Engineers say that 67% of all such contracts overrun their agreed completion date, so it should not have been a surprise when Gigaclear told CDS in July 2018 that they would not deliver the contracted number of connections at the end of September 2018. Under EU State Aid rules CDS have no authority to continue their Phase 2 contracts beyond 2020. CDS therefore suspended all contract payments to Gigaclear as of September 30, 2018 and that has not changed until CDS cancelled the five Gigaclear contracts on September 12, 2019.

The CDS Board and CDS have proved their incompetence to run this programme and must not be allowed to attempt a fourth Phase 2 procurement round. I and other rural Devon and Somerset residents call on you to request the Secretary of State for Digital, Culture, Media and Sport (DCMS) to take direct control of the CDS Phase 2 procurement process for Devon and Somerset, rather than continuing  to leave that responsibility with Devon and Somerset County Councils.

Please act with urgency.

Yours sincerely,

Graham Long
Chairman, B4RDS (Broadband for Rural Devon & Somerset)
Chairman, Upottery Parish Council
Steering Group Member, Blackdown Hills Parish Network.
Management Group Member, Blackdown Hills AONB

Tel: 01823 601382 / 07711 267607

Copies to Councillors, the Media and other interested parties.