Superfast broadband in Scotland: reaching 100%

4. Proposed Intervention

In the absence of premise level data from broadband infrastructure operators Scottish Government has mapped areas as white, grey or black at a postcode level, using the following criteria:

For basic broadband,

• A postcode is turned grey if there is only one broadband infrastructure operator providing basic broadband services (with speeds greater than 2 Mbps) to that postcode.
• A postcode is turned black if there are at least two broadband infrastructure operators providing basic broadband services (with speeds greater than 2Mbps) to that postcode.
• All other postcodes remain white.

For NGA,

• A postcode is turned grey if there is only one broadband infrastructure operator providing NGA services (with speeds greater than 30Mbps) to that entire postcode.
• A postcode is turned black if there are at least two broadband infrastructure operators providing NGA services (with speeds greater than 30Mbps) to that entire postcode.
• All other postcodes remain white.

In addition, the proposed intervention area includes a number of "under review" areas (coloured blue on the map). These areas have previously been indicated to have planned commercial coverage for NGA broadband (i.e. mapped as grey or black NGA), but those plans have been reported through the OMR as being 'at risk' (or have otherwise been deemed by Scottish Government as being 'at risk') of not being completed. These areas will be subject to continued monitoring and verification of supplier plans within the 3 year period by Scottish Government and in the event that these commercial plans fall away these premises will be mapped as white NGA and form part of the proposed intervention area and eligible for intervention via this aid measure. ^[5]

The mapping analysis of existing and concretely planned coverage (within the next 3 years) has identified significant remaining 'white NGA' areas. The outcome of the OMR is summarised in terms of NGA White, Grey, Black and 'Under Review' premises below.

Scottish Government intends to procure coverage to target the remaining 'white NGA' areas by conducting a new procurement under the 2016 NBS (and in accordance with the Public Contracts (Scotland) Regulations 2015);

As noted above, if commercial plans fall away in the 'under review' areas then these will be considered as eligible for intervention and considered as 'white NGA' areas.

If it is possible, Scottish Government intends to make coverage information available at a premises level within the identified white postcode areas to bidders to ensure that bids can target those premises without NGA broadband coverage efficiently. This will include information at a premises level received in response to this consultation.

It should be noted that whilst this consultation includes mapping of basic broadband coverage, the procurement will not deploy basic broadband technologies. The intention is to provide bidders with details of all the areas where there is basic broadband coverage so as to ensure, so far as possible, that these areas are only overbuilt by NGA broadband infrastructure where the premises will receive over 30Mbps or at least a doubling of speeds, in accordance with the requirements of the 2016 NBS. Where doubling is not possible, the supplier will be obliged to demonstrate that the design is optimised to limit the overbuild of existing basic broadband networks with speeds that are below 30Mbps.

4.1. New Procurement

Scottish Government commenced extensive market engagement and warming between September 2016 and June 2017 and has issued its outline requirements to enable feedback from potential bidders to be taken into account in the design of the scheme and to understand the capacity and capability of the market.

Scottish Government has also considered the ability of the private sector to deliver the project, available resources, and its own capacity and capability to develop its approach to intervention. It has decided that the project will use an investment gap funding approach to procure an infrastructure provider.

The procurement will be carried out in accordance with the Public Contracts (Scotland) Regulations 2015 and EU Public Procurement Directives. The tender is most likely to utilise the Competitive Procedure with Negotiation and will be conducted in a transparent and non-discriminatory manner, as required by the 2016 NBS.

The procurement will be designed to meet the specific requirements of the 2016 NBS, which recognises the need to optimise the number and quality of bidders, in particular by reducing the hurdles to participation in procurements by smaller suppliers and encouraging collaboration between larger and smaller operators so that a range of appropriate solutions can be brought forward. This was also a key objective of the market engagement exercise. When the procurement is launched, the white areas are likely to be sub-divided into a number of lots or areas to promote this. However, Scottish Government does not discount the possibility that some or all of these lots may be aggregated if this represents the most economically advantageous approach to meeting the requirements set out in its Invitation to Tender.

Scottish Government's priority will be to ensure that the available public funding is used most effectively by ensuring coverage of premises currently getting relatively slow broadband speeds. However, areas with higher speeds may be targeted, subject to the need to provide a 'step change' in broadband capability (as outlined above). In addition, through Citydeal funding, Scottish Government is seeking to target certain NGA white areas to provide ultra-fast broadband capability with speeds well above 100Mbps and it should be noted that the areas to be targeted with ultra-fast broadband are most likely to be areas with a higher concentration of SMEs and businesses.

A range of public funding sources will be utilised in support of R100 procurement activity - the Scottish Government, UK Government, local authorities (including through City Regional Deals) and the European Union. We anticipate that, in total, £400-600 million may be available for investment via the forthcoming procurement(s).