REPORT TO: ECONOMIC DEVELOPMENT AND INFRASTRUCTURE SERVICES COMMITTEE ON 25 AUGUST 2015

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1 PAGE: 1 REPORT TO: ECONOMIC DEVELOPMENT AND INFRASTRUCTURE SERVICES COMMITTEE ON 25 AUGUST 2015 SUBJECT: BY: BROADBAND INFRASTUCTURE COVERAGE CORPORATE DIRECTOR (ECONOMIC DEVELOPMENT, PLANNING & INFRASTRUCTURE) 1. REASON FOR REPORT 1.1 To advise the Committee about the projected gaps in broadband infrastructure in Moray and what is being done to fill those gaps. 1.2 This report is submitted to Committee in terms of Section I (F) (3) of the Council's Scheme of Administration in relation to the exercising of functions that promote economic development. 2. RECOMMENDATION 2.1 It is recommended that the Committee: (i) (ii) agree that Officers continue to liaise with DigitalHI concerning its plans to close gaps in broadband infrastructure in Moray; and note that funding is projected from BroadbandUK and the Scottish Government for further broadband rollout. 3. BACKGROUND 3.1 Moray is at the front end of the rollout of superfast broadband across the Highlands and Islands. It is part of the wider Digital Scotland Superfast Broadband (DSSB) programme. The programme aims to cover a minimum of 75% of premises in all seven Local Authority areas and reach at least 84% of premises in the region. The total project cost is 146m of which 127m is public funding from UK and Scottish Governments and Highlands and Islands Enterprise (HIE). The programme is being delivered under contract by BT, overseen by HIE (Digital Highlands and Islands DigitalHI). Phase 1 roll out of infrastructure is projected to be complete at the end of At the Economic Development and Infrastructure Services Committee on 10 February 2015 (paragraph 4 of the minute refers), this Committee expressed a desire to address filling projected gaps in coverage. On 2 June 2015 this Committee received a report which recommended that the Council waits until

2 PAGE: 2 the completion of the rollout at the end of 2016 to see what gaps remain in the coverage and then investigate with HIE how gaps may be filled. However, the Committee felt it was not appropriate to wait until the end of the programme, considering it must already be known where the gaps in the roll out are likely to be and that measures should be taken as soon as possible to contingency plan to fill the gaps (paragraph 8 of the draft minute refers). 3.3 Announcement On 24 July, the Scottish Government announced through the Scottish Rural Parliament that BT has been requested to undertake modelling work as part of the planning for a Phase 2 of the programme. The modelling work to identify which areas cannot be reached by Phase 1 of the programme. This should be known by the end of the year. This knowledge will enable those communities unable to access superfast broadband through BT to work with Community Broadband Scotland (CBS) to identify alternative methods of access. The Scottish Government have advised: We recognise how important the provision of fibre broadband is to people across the country, and understand that people may feel frustration with the level of detail available to them. A postcode checker has been set up - which allows people to check the status of their area and gives an indication of when infrastructure in their area will be upgraded. It is one the largest infrastructure projects in Europe and the deployment is complex, multi-faceted and highly technical. The project is deploying infrastructure in phases, and each phase requires BT to undertake detailed site surveys before it can firm up the locations of cabinets to be upgraded. The programme aims to provide clarity as early as possible to release deployment dates for individual cabinets and areas as soon as site surveys have been undertaken. The Scottish Government has also established Community Broadband Scotland (CBS) to support those communities that won t have a fibre solution delivered by the DSSB programme. We are determined that these communities are not left to the end and that CBS supports activity in parallel with DSSB roll-out. We have asked BT to undertake further modelling, which we expect will provide clarity on those areas that they will not reach and allow CBS and the communities in question to design alternative solutions. We anticipate the results of the modelling will be available in the Autumn. 3.4 Report from DigitalHI The report attached Appendix 1 has been provided by the Director of DigitalHI and sets out the position in Moray as of the end of June. It advises by the end of 2016 some 93% of premises in Moray are expected to be connected and there has already been significant progress in reaching this goal. Already around 70% of premises across Moray are now connected to fibre broadband infrastructure, which is by far the highest coverage level in any of the Highlands and Islands Local Authority areas. The programme alone has reached over 23,500 premises. Take up is encouraging and currently stands around 20% of those premises covered by the programme.

3 PAGE: Most importantly the report confirms that as rollout continues it is not possible to be definitive about exactly how far BT s coverage can be extended and therefore there is a lack of certainty about which communities will not benefit from the BT contract. However, the announcement reported above indicates in the Autumn there will be greater clarity about which areas will not be reached by Phase 1 of the roll-out. This lack of certainty on which communities will not benefit from the BT contract is not caused by prevarication by BT but rather by the desire to see as many homes and businesses reached by mainstream, competitive next generation broadband services. HIE is therefore reluctant to say that premises will definitely not be reached by BT when there is still a reasonable chance that they may be in a later stage of the project. That said, HIE recognises that it is important that communities who are expected to be beyond the scope of a BT solution, are advised of this position as soon as possible to allow them to seek improved broadband by other means. HIE is also delivering Community Broadband Scotland (CBS), and communities worried that they will not be covered by the contract with BT can approach CBS for guidance, advice and funding. There is close liaison between the project team and CBS to make sure that they have the latest information about the BT rollout so that they are able to give the best possible advice to communities. CBS already has funding for community broadband projects from the Scottish Government and is currently applying to augment its budget with funds from the Scottish Rural Development Programme (SRDP). It is the intention that these funds will be managed by CBS and any community broadband project will apply to CBS rather than for the SRDP funds directly. 3.6 As per the report, a Phase 2 of the programme is anticipating the Highlands and Islands region would receive a proportion of the additional funding. However, with such a high percentage of coverage being provided in Moray at Phase 1, it is likely that there will be strong pressure that this funding will first be allocated to increase coverage in those Local Authority areas with much lower expected coverage (for example the current coverage for the Western Isles is only 70%). 3.7 The report states that: BT is investigating ways of installing coverage more cheaply and is trialling developments such as Wireless to the Cabinet (where cabinets are linked back to the main network by wireless rather fibre optic cable) and Fibre to the Remote Node (which uses small cabinets to reach smaller clusters of premises). These may make it possible to extend coverage in the future and ensure that more people receive superfast speeds. 3.8 At the Committee meeting on 2 June 2015, Councillor Ross referred to areas of his ward - Tienland and Inchberry - as likely not receiving coverage (para 8 of the minute refers). Using this as an example, DigitalHI advise:

4 PAGE: 4 The Teinland and Inchberry areas are covered by the Longmorn, Lhanbryde and Orton exchange areas. There is likely to be rollout in all three areas but given the dispersed nature of the premises, all homes will not be covered by the cabinets being upgraded/installed. Parts of Lhanbryde are already connected, initial rollout in Longmorn is imminent and Orton is due in Coverage in Orton is likely to cover the Inchberry area. DigitalHI and the contactor are trying to find a way of giving a greater number superfast speeds through the use of Fibre To The Cabinet (FTTC). As this requires additional planning the rollout in the exchange area has been pushed back into DigitalHI and the contactor are also investigating whether (outside the scope of the DSSB project) the exchange can be upgraded to Asymmetrical Digital Subscriber Line (ADSL) Max (up to 8Mbps) so that even those not in line for superfast see some benefit over the current 0.5Mbps Exchange Activate service. 3.9 A second example of this uncertainty during roll-out is at Glenlivet, where a pilot project developed by the Tomintoul and Glenlivet Community Development Trust with CBS is on hold pending the completion of roll out of infrastructure in the area. Tomintoul village will be covered by the roll out. Closing the gaps 3.10 The HIE Broadband programme uses public funds to provide infrastructure as far as possible beyond any infrastructure provided by existing commercial broadband providers; communities not reached by the HIE programme are eligible to be assisted by working with CBS. Logically that should just leave properties that fall beyond the reach of technologies installed via CBS. As rollout progresses, HIE works with the contractor BT to achieve as complete a coverage as possible and best value for money In the absence of clarity from DigitalHI about which areas will not receive coverage, there are clear difficulties in identifying the scope of any work which the Council might reasonably support to improve both connectivity and speed to premises in Moray. The HIE broadband programme seeks to get fibre cables to street cabinets, from there it is reaches property on existing copper cables over which speed diminishes over distance from the cabinet If the Council is minded to provide or subsidise upgrades in infrastructure to individual premises, this cost is unknown but without any idea of scope the best indication which officers can provide is that the costs would likely exceed hundreds of thousands of pounds; the Council has no budgetary provision for this. The Committee is reminded that the Council faces a challenging few years in relation to balancing its budget and is expected to need to reduce annual operating costs by 15M by 2017/ As set out above, CBS has been established to assist communities that may receive an upgrade in speed but ultimately not superfast coverage from the BT contract. In addition, BDUK are considering a Phase 3 to reach the last 5% of premises across the UK and further funding may be available to Scotland.

5 PAGE: DigitalHI state that: Fibre to the Cabinet (FTTC) will be the enabling technology for the majority of premises giving maximum speeds of up to 80Mbps download and 20 Mbps upload, although these speeds reduce as the distance from the cabinet increases. The actual speeds achieved at a house or business will depend on both the length and quality of the copper line but typically premises within 1km of the cabinet should receive at least 24Mbps download, which Broadband UK (BDUK) defines as superfast. As a line lengthens the speed will drop and by around 2.5km there will be little or no uplift in speed DigitalHI consider that the greatest challenge of the programme will be to come up with an infill solution to reach premises that are on upgraded cabinets but are too far away from those cabinets or premises which are not connected to new cabinets because they are too spread out to make it viable. BT s ability to provide an adequate service to these premises may change in the future as technology improves. In an ideal world the programme would fund Fibre to the Premises to every house but there is not the funds to do this The issues created by uncertainty about the extent and capacity of improved infrastructure have been recognised by the Convention of Highlands and Islands(COHI) and to address this, officers from BT have been asked to attend the meeting of COHI to be held in Moray in October It is expected that at that meeting they will be asked to release information about which postcodes will not receive reasonable speeds by the end of Phase 1 as an interim step. As reported above in the announcement made 24 July 2015 the Scottish Government have commissioned additional work from BT to confirm in the autumn which areas will and will not get superfast broadband through the BT roll-out. Aid 3.17 European Structural Investment Fund Priority 2 of the EU programme includes broadband development and the rollout of high speed networks. However, this funding is unlikely to be available to extend the current HIE/BT contract. Additionally, an element of the planned Moray LEADER programme includes facilitating rural broadband as a priority In the case of business, Committee is advised that Moray has been accepted to participate in the Broadband Business Voucher Scheme financed by the UK Treasury presently operating until the of March Small and medium sized enterprises can receive vouchers up to 3,000 to pay for infrastructure upgraded that would provide a leased line connect to the nearest exchange. Business simply enter their postcodes into the system at where they can either choose an off the shelf deal or get a quote from a broadband supplier for improved connection. This has been publicised on the Council website and with local media; it is being promoted to business by Business Gateway and information has been shared with the Chamber of Commerce and the Federation of Small Business for promotion.

6 PAGE: HIE is also delivering CBS, and communities worried that they will not be covered by the contract with BT can approach CBS for guidance, advice and funding. The Council can help to promote the existence of CBS to communities. 4. SUMMARY OF IMPLICATIONS (a) Moray 2023: A Plan for the Future/Service Plan/Health and Social Care Integration Moray 2023 The Ten Year Plan identifies Sustainable Economic Development as its top priority. The Plan includes it but is not limited to outcomes to increase the population, regional average wage, employment by the private sector, employability, the number of business start-ups, and the number of start-up businesses that survive beyond five years and the percentage of premises that have access to Next Generation Broadband. The Ten Year Plan includes a target to that 95% of premises will have access to Next Generation Broadband by The report outlines an approach to addressing projected gaps in broadband coverage post On 10 February 2015, this Committee identified securing broadband and mobile phone networks was a Tier 1 economic development priority (para 4 of the miunte refers). (b) Policy and Legal The Council considers support for economic development issues on their merits, against the objective to facilitate sustainable economic growth and the desired outcomes of the Ten Year Plan. (c) Financial implications If the Council is minded to pay for or subsidise improved broadband connection from cabinets to individual premises the Council has no budgetary provision for this. The Committee is reminded that the Council faces a challenging few years in relation to balancing its budget and is expected to need to reduce annual operating costs by 15M by 2017/18. (d) Risk Implications If the Council was to set up its own programme to close gaps in coverage there is a high risk if duplication of effort and resources to those of CBS until such time as white areas are identified. (e) Staffing Implications

7 PAGE: 7 Beyond staff continuing to research and liaise with HIE &CBS, there are currently no direct staffing implications from this report. (f) Property There are currently no property implications. (g) Equalities There are no equalities impacts arising from this report. (h) Consultations Consultation has been undertaken with Stuart Robertson, Director of Digital Highlands and Islands (DigitalHI); Rhona Gunn (Corporate Director (EDP&I), Jim Grant (Head of Development Services), Don Toonen (Equal Opportunities Officer) regarding any Equalities implications; Aileen Scott (Legal Services Manager), Moira Patrick (Democratic Services Manager) and Lorraine Paisey (Principal Accountant Financial Services), in regard to the budgetary information. Any comments have been incorporated in this report and they are in agreement with sections relating to their area of responsibility. 5. CONCLUSION 5.1 At this point in the rollout of broadband infrastructure in Moray, it is too early to know with certainty which areas will not be served by HIE s contract with BT. It is recommended that staff continue to liaise with DigitalHI to inform the Council where coverage is unlikely to be available after the completion of the BT contract, whilst pressure is applied nationally via COSLA and also via COHI on the issue of coverage and contingency planning to meet any gaps. Author of Report: Gordon Sutherland; Background Papers: Report from DigitalHI June 2015 Ref: Broadband