In June this year, DLA Piper published an update detailing the ongoing progress of Project Gigabit (the UK Government’s plan to support nationwide coverage of gigabit-capable broadband throughout the UK). Further details on the overall Project Gigabit can be found in our previous article issued in March.

In our June update, we detailed the proposed funding and subsidy regime set out by the Department for Digital, Culture, Media & Sport (“DCMS”) for investors wishing to become involved in various Project Gigabit procurements.

DCMS has now issued a ‘Summer Update’ (the “Update”) in respect of Project Gigabit.

DCMS’ Update, among other things:

  • highlights the progress made across all areas of the UK to date and sets out most recent developments to the Project Gigabit plan;
  • provides investors with details on target timelines and new proposed investments (including their range of contract values) for procurements during the rollout of Phase 1 and 2; and
  • confirms DCMS’ proposals to make funding available to existing broadband programmes, and top ups which have been made to existing voucher schemes.

In this article we summarise the key announcements from DCMS’ Update.

Commercial Developments since March and their impact on Project Gigabit

Increased commercial investment since March

Since the publication of the Project Gigabit Phase 1 Delivery Plan in March, DCMS has continued to engage with telecoms providers and investment funds to try to encourage greater commercial investment in the rollout of gigabit broadband networks.

This goal appears to have been achieved and the Update highlights a number of substantial developments.

  • DCMS note several telecoms infrastructure providers have secured commercial funding and have accelerated their plans to increase their footprint within the UK over the next few years.
  • Approximately £5.6 billion has now been committed through independent (non-Openreach or Virgin Media) telecoms providers towards the creation of up to 30 million gigabit connections by the end of 2025.
  • Openreach have increased their target gigabit coverage to 25 million connections by 2026, including 3 million premises in harder to reach rural areas. Openreach also have stated a plan to double weekly connection deployment rates from 43,000 premises every week to roughly 75,000.
  • O2 and Virgin Media have reiterated their commitment to cover up to 10 million premises with potential investments in infrastructure of roughly £10 billion. This is set to be of particular benefit to rural areas that would have required significant public intervention in order to increase coverage.
  • Since March, a number of telecoms operators are now also offering fixed wireless connectivity to hard to reach areas.

What does this mean for Project Gigabit?

DCMS note that this increased commercial investment in fibre network rollout will assist in the achievement of the UK Government’s goal of 80% of premises in the UK having gigabit-capable connectivity by 2025. Despite this positive push, DCMS acknowledge that public funding will continue to be needed in order to extend coverage further and they now aim to reach 85% of premises by 2025.

DCMS note that the input from commercial investments now requires a more targeted approach to Project Gigabit procurements, in order to only fill in gaps missed by the larger scale procurements and commercial investment. DCMS wishes to avoid overbuild in already connected areas while continuing to bring connectivity to areas without connectivity.

Project Gigabit Progress since March

As detailed in our March article, DCMS’ procurement approach involves focusing on Local Supplier Procurements, Regional Supplier Procurements, and Cross-regional Supplier framework procurements.

In the DCMS Update, DCMS has provided updates on proposed procurements for each procurement type.

  • Local Supplier Procurements: BDUK has launched the Dynamic Purchasing System which it proposed in its Phase 1 Delivery Plan to use for Local Supplier Procurements.

Seventy telecoms providers have registered their interest for Local Supplier Procurements, and DCMS encourages any telecoms provider who has not registered to do so as soon as possible. Registration will enable telecoms providers to compete for any Local Supplier Procurement call offs which are added to the Dynamic Purchasing System.

Local Supplier Procurements will start from as early as October 2021 and initially aim to target an estimated 16,500 premises. The indicative contract values of these procurements has not yet fully been established, however further information is set to be provided once the intervention areas have been better defined.

  • Regional Supplier Procurements: Lists of premises for the first set of Regional Supplier procurements have also been generated. DCMS are still engaging with the market and prospective bidders through individual engagement.

DCMS aim to publish the Find a Tender Service (FTS) Contract Notice and the Selection Questionnaires this summer followed by the Invitations To Tender in the autumn. The first Regional Supplier procurement is scheduled to start in September 2021 with an estimated indicative contract value of between £60 million and £102 million and is set to target roughly 66,000 premises. Further procurements for Phase 1a and 1b are set to follow shortly after with a minimum indicative contract value of £24 million.

  • Cross-Regional framework Supplier procurements: DCMS are currently focusing on Local Supplier and Regional Supplier procurements, and have not proposed any Cross-Regional Supplier framework procurements at this stage.

Top ups to voucher schemes, and additional funding available under Superfast Broadband programme

The current success of the project has led to DCMS and local bodies extending a number of complimentary initiatives to bolster the rolling out of Project Gigabit’s implementation phases.

  • DCMS will now look for new voucher scheme projects to complement Project Gigabit procurements. In DCMS’ initial Project Gigabit Phase One Delivery Plan, DCMS noted that vouchers would be suspended once the public review process for a procurement had commenced, but in its Update has decided that such suspension will be lifted and vouchers can be requested up to six weeks before a procurement formally starts.
  • A number of top ups have also been made to existing voucher schemes by the Scottish and Welsh governments and 15 English councils, to a value of approximately £26 million.
  • DCMS have proposed to make up to £90 million additional funding available to extend contracts awarded under the Superfast Broadband programme (which pre-dates the Project Gigabit programme).

DLA Piper continues to monitor updates and developments to Project Gigabit. For further information or if you have any questions please contact the authors or your usual DLA Piper contact.