Broadband rollout ahead of schedule, at last

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The report on The Superfast (Rural) Broadband Programme gives an overview and update on the progress so far of the rollout of faster broadband to rural areas.

Broadband Delivery UK (BDUK), a unit within the Department of Culture, Media & Sport, has three phases for this rollout, focusing especially in rural areas.

Superfast broadband coverage was scheduled to have reached 90% of UK premises by December 2016, but looks to be well ahead of time. Phase two should extend this coverage to 95% of premises by December 2017.

During the third phase BDUK say they will be exploring ways to extend broadband coverage beyond 95% with pilot projects pencilled in for completion by March 2016.

None of this comes cheap. Phase one requires £530 million of Government funding, phase two will cost the Government a further £250 million, and phase three about £10 million.

The average broadband speed in the UK is 18.7Mb according to Ofcom figures from October 2014. BDUK define superfast broadband as exceeding 24Mb, a speed they hope will become achievable across the entire country.

However, Ofcom's figures show that the average broadband in rural areas can drop as low as 13Mb. The Superfast (Rural) Broadband Programme aims to address this digital divide ion the next few years, following a number of delays.

BT to lower its costs

The main contractors for the rollout are BT. While working with local agencies on the rollout, it's been BT that's had to shoulder the risk of any overspend.

BDUK say BT have added contingency costs of between 5% and 8% to their bids, but following analysis of actual expenditure during phase one so far, they've agreed to lower their costs - which means a reduction in the amount of public funding required.

But BT look like the best bet for the project, as BDUK say that in a trial cost comparison study from consultants Atkins, "in January 2015... BT had charged the public sector approximately 20% less than the estimated cost for an alternative supplier".

In addition, in September 2014, BT's total spend on phase one was £142m below the original estimated price. BDUK admit there are possible further costs that BT haven't charged for yet - but it's reckoned BT will still have spent around £92m less than predicted.

There had previously been criticism of BT's involvement in the rollout, and the fact that they won all 44 contracts - boosting their plans to spread their broadband services.

Minister for Culture, Communications and Creative Industries Ed Vaizey defended BT's winning of the contracts late last year when providing an update on the programme.

He said BT had the necessary capacity and national network to carry out the scheme.

"The big national players either fell down because they didn't have the capacity to take on these contracts, or didn't want to share their networks," said Vaizey, adding that there was still some competition out there.

"I did not come to this saying: 'Let's give it all to BT.' I would have welcomed the competition, and I do still think the consortium led by Fujitsu in the early days did help keep BT's feet to the fire," he said, referring to Fujitsu's 2012 plans to connect up to five million rural homes.

Next areas for coverage

In the meantime, a number of areas in the UK have already reported back on the successful arrival of faster broadband under the BDUK scheme.

Rural areas of Norfolk will be among the next to benefit from the rollout of superfast broadband. The contract, worth £17.9m, will service 25,000 homes and businesses.

BT are contributing £5.9m to the cost while the government and the New Anglia Local Enterprise Partnership make up the remainder of funding.

While the project is focused on rural areas, Norfolk County Council's George Nobbs says:

"The whole county stands to benefit from the knock-on effect, with at-home learning and working and rural entrepreneurship among the opportunities that will be unlocked."