Scottish Affairs Committee
Wednesday 28th October 2026
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09:25
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09:25
Speaker 2
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Speaker 2
So I think first of all, thank you for the question. Gigabit broadband in Scotland is continuing to improve , and it's in large part due to the the commercial investments of operators, but also the the foresight of Scottish Government and from from Westminster as well in funding both R 100 and and gigabit Project gigabit. And we're continuing to ramp up our deployment as we go through the. Scotland. As I suspect everybody in this committee knows, offers a unique set of challenges both in geography and in terms of distribution. And the engineering challenges are quite a bit different to the rest of the UK.
I've experienced building in other parts of rural UK and they're all slightly different. Broadband delivery on on paper can look like it's a point A to point B, but in reality, and particularly in Scotland, it becomes a large civil engineering project to deploy infrastructure across many, many miles of both towns, cities and out into the countryside. There are some unique challenges in Scotland now. Every provider makes use of tele telegraph poles and the rest of the UK. About 11% of telegraph poles are on private land, so therefore 90% are easy to access. In Scotland it's more like two thirds.
So therefore getting access to the infrastructure is slightly harder. And then as well, when when those poles are on private land, it means you're dealing with lots of landowners. You've also got the geography challenges of note, very dispersed people. But all those things are what makes it difficult. The reality is we have we have a successful story now in R 100, we have a successful story that's growing on gigabit. And these are solvable problems. And they're being solved through both relationships with with us and Openreach and others and the funding provided by government. So while it while it is a challenge to build, it's not an impossible challenge.
And we're making good progress now in getting through it.
I've experienced building in other parts of rural UK and they're all slightly different. Broadband delivery on on paper can look like it's a point A to point B, but in reality, and particularly in Scotland, it becomes a large civil engineering project to deploy infrastructure across many, many miles of both towns, cities and out into the countryside. There are some unique challenges in Scotland now. Every provider makes use of tele telegraph poles and the rest of the UK. About 11% of telegraph poles are on private land, so therefore 90% are easy to access. In Scotland it's more like two thirds.
So therefore getting access to the infrastructure is slightly harder. And then as well, when when those poles are on private land, it means you're dealing with lots of landowners. You've also got the geography challenges of note, very dispersed people. But all those things are what makes it difficult. The reality is we have we have a successful story now in R 100, we have a successful story that's growing on gigabit. And these are solvable problems. And they're being solved through both relationships with with us and Openreach and others and the funding provided by government. So while it while it is a challenge to build, it's not an impossible challenge.
And we're making good progress now in getting through it.
09:27
Patricia Ferguson
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Patricia Ferguson
Well, you you cite the geography and the remoteness of of parts of Scotland and you say it's not impossible. It clearly isn't. This Committee for other inquiries has visited both Norway and the Faroe Islands. And in both places, I think they'd be shocked to hear about the disparity that we have in some of our communities, particularly in remote and rural Scotland, but not exclusively there. What what is so different between Scotland and Norway?
09:28
Speaker 2
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Speaker 2
I can't comment on Norway. It's not one that I would be familiar with at all. I think the the fact that it is available to build it is it's fundamentally a time, effort and money problem. So we we, we've demonstrated across the UK that you can build fibre broadband at scale. We're both on a commercial basis and on a government supported and funded basis. The it is largely a function of how much funding and government support is available to enable us to do the build as you. As you play back to me, the engineering is possible.
It's. It's just the level of support that is required to do that.
It's. It's just the level of support that is required to do that.
09:28
Speaker 1
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Speaker 1
I think I would say that we recognise the challenge. I see I've spoken about broadband in the most rural communities of Scotland for the best part of a decade. I visited Shetland and Orkney regularly, and those were two of the geographies that were really challenged in terms of broadband. I think the impact that both the A100 programme has made to those communities is vast. The subsea cable deployment that we did in 2022, that's created the the capacity to reach the North Isles of Shetland as well as reach Fair Isle. And I know we've got a delighted school and community in Fair Isle who's the most connected place in the UK?
A small island that really nobody thinks other than what they produce. But from our point of view, it's really important that the investment is made and we're able to deliver. And that's just one one sort of strand of how we can deliver in those most rural communities.
A small island that really nobody thinks other than what they produce. But from our point of view, it's really important that the investment is made and we're able to deliver. And that's just one one sort of strand of how we can deliver in those most rural communities.
09:29
Patricia Ferguson
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Patricia Ferguson
Miss Kelly, would you like to add anything? Yes, I absolutely going to agree with my colleagues, Openreach, about the engineering difficulties. We all face that. But go fibre is really, you know, rising to that challenge. And we are actually delivering ahead of time in our two project gigabit contracts that we have. All the milestones that we have in both of those lots will be delivered ahead of time. So, you know, we are we are meeting those challenges and really delivering for the for the communities and the rural parts of Scotland that we're delivering in. We also, you know, we face the same kind of, you know, challenges, but also, you know, there are specific issues that small companies like go fibre che face because we are, we are dealing with, you know, our friends in Openreach, we're dealing, you know, the government's we have a really good relationship with both the Scottish Government and with the UK government through BT UK.
But, you know, these things are tricky and we need that subsidy in order to to meet our business case to deliver the fibre to those premises. So it's you know, there are there are plenty of challenges, but we're absolutely rising to them and delivering as fast as we possibly can. Mr. Wallace, I suppose your position is slightly different in that your company is a reaction to some of these problems. I would yes.
But, you know, these things are tricky and we need that subsidy in order to to meet our business case to deliver the fibre to those premises. So it's you know, there are there are plenty of challenges, but we're absolutely rising to them and delivering as fast as we possibly can. Mr. Wallace, I suppose your position is slightly different in that your company is a reaction to some of these problems. I would yes.
09:31
Speaker 3
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Speaker 3
I would agree with the others. I certainly say it's obviously the Highlands are a challenging area to build or a lot of Scotland is. And I can understand what they're going through. But I would say I feel like there's a lack of resource as well. There's not the engineering resource needed to deliver these projects, and that's maybe why they're being held back as well and is as as Fiona said, I think there's a lack of cooperation between providers. We could all help each other far more if we shared resource or work together in some areas, and it could be a contract related thing.
So when I say Openreach are awarding the contract, it prevents them almost from helping others, whereas we'd like to see that a bit more cooperation with others would enable a lot of areas to benefit quickly from some of these upgrades that BT Openreach apply, because they may catch up eventually. In the case of the area I operate anyway, they could certainly catch up eventually, but it would allow us to give people what they need now because for many they need the service now. Not in five years time, ten years time. They want it now. Today.
So when I say Openreach are awarding the contract, it prevents them almost from helping others, whereas we'd like to see that a bit more cooperation with others would enable a lot of areas to benefit quickly from some of these upgrades that BT Openreach apply, because they may catch up eventually. In the case of the area I operate anyway, they could certainly catch up eventually, but it would allow us to give people what they need now because for many they need the service now. Not in five years time, ten years time. They want it now. Today.
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09:32
Patricia Ferguson
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Patricia Ferguson
Would would others concur with that? I would say that there's a very specific issue that we face in delivering our project gigabit contracts and coming up against the delivery of other operators. I don't know whether the committee is aware of the open market review process, which is the process that informs the design of the intervention areas. And unfortunately, it's not the the information that comes from all the operators, including us, is not set in stone and can be changed. But of course, the procurement process follows a very specific track and a specific time scale. And so it can be the fact that at the beginning of the process, the OMR says one thing, but by the time you actually get to award the contract, everything's changed or even as the contract is starting to be delivered.
And that means a certain amount of retrenching and redesign and, and it just creates an unnecessary form of, of delay. And, you know, unfortunately, you know, we see a lot of Openreach coming in and overbuilding the networks that we were planning to build under those contracts. And we're then having to do the work to redesign, redeploy, think about it, talk to the government about how we use the funding because nobody wants to use public money unless it's really needed. And so it's really important that we make the best use of those contracts. And so I would I would say that there are there are things that can be done that could make this rollout easier for everybody.
And I absolutely agree with Ian, that that funding in Scotland is an issue because it is so much more challenging and we need to take up, we need the people to, to really, you know, help us, especially the Scottish companies like us and, and like Ian's to, to, you know, to come along and, and take up our service so that we can come and do more. Are there any other issues that would help us to close the gap? Mr. Thorburn? Mr.
Kavanagh.
And that means a certain amount of retrenching and redesign and, and it just creates an unnecessary form of, of delay. And, you know, unfortunately, you know, we see a lot of Openreach coming in and overbuilding the networks that we were planning to build under those contracts. And we're then having to do the work to redesign, redeploy, think about it, talk to the government about how we use the funding because nobody wants to use public money unless it's really needed. And so it's really important that we make the best use of those contracts. And so I would I would say that there are there are things that can be done that could make this rollout easier for everybody.
And I absolutely agree with Ian, that that funding in Scotland is an issue because it is so much more challenging and we need to take up, we need the people to, to really, you know, help us, especially the Scottish companies like us and, and like Ian's to, to, you know, to come along and, and take up our service so that we can come and do more. Are there any other issues that would help us to close the gap? Mr. Thorburn? Mr.
Kavanagh.
09:34
Speaker 2
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Speaker 2
I think just to, to, to clear on some of the things that Openreach do to support because we're very mindful of our position and our scale. So it is an obligation on Openreach is something that we offer happily, that every provider in the UK and anybody who signs up is able to use what we call our passive infrastructure, so our ducks and our poles, that is available to everybody. And in fact, a large proportion of the UK's alternative network builders would use our ducting poles. So we're we're in an area. First, the ducting is available to use.
And as we go, I think I would I would share the sentiment that this is this is at its core a. How much do we want to spend and how short a period of time. So anything that allows us to either have more access to, to funding and grant income, because these premises are not commercial to build, that is one thing, but there are things that we can do to reduce the cost of delivering. And then therefore you get more return for the opined invested and, and some of the areas in that space that we could look at is, you know, the right to access land to the telegraph poles in private land.
Also some of the land access agreements. So speeding up those processes, that's that's a if you think about the activity of building a fibre from point A to point B, anything that isn't actually building it from point A to point B, you could consider it as as a wasted effort or a wasted pound. So being able to streamline that process and some of it will always be essential and always be required now would allow all of us to get on further and build networks further and faster.
And as we go, I think I would I would share the sentiment that this is this is at its core a. How much do we want to spend and how short a period of time. So anything that allows us to either have more access to, to funding and grant income, because these premises are not commercial to build, that is one thing, but there are things that we can do to reduce the cost of delivering. And then therefore you get more return for the opined invested and, and some of the areas in that space that we could look at is, you know, the right to access land to the telegraph poles in private land.
Also some of the land access agreements. So speeding up those processes, that's that's a if you think about the activity of building a fibre from point A to point B, anything that isn't actually building it from point A to point B, you could consider it as as a wasted effort or a wasted pound. So being able to streamline that process and some of it will always be essential and always be required now would allow all of us to get on further and build networks further and faster.
09:36
Speaker 1
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Speaker 1
I think I would just echo what Fiona had said regarding certainty of of build. I think we've all been in contracts for, for quite some time from an Openreach perspective, and that is the constant. It will change. I think we recognise that we're. Commercial provision has not needed then public subsidy to intervene. Then rightly the governments make the choice to remove that build and we've seen that within our contracts quite regularly occurring. So it is challenging because it does lead to rework and a level of certainty for the supply chains delivering. It tends to be what they're looking for.
But we do recognise that where public subsidy is not needed, then that would be the recommended approach. And that's what we've been driven from both UK and Scottish Government on maximizing our own commercial investment wherever it's physically possible, and following through on our capability to deploy to avoid the need for public subsidy.
But we do recognise that where public subsidy is not needed, then that would be the recommended approach. And that's what we've been driven from both UK and Scottish Government on maximizing our own commercial investment wherever it's physically possible, and following through on our capability to deploy to avoid the need for public subsidy.
09:37
John Cooper
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John Cooper
Thank you, chair. Thanks very much for your attendance this morning. I think a story that we all around this table would understand is this the haves and the have nots. And although the overall figures are very good, something like 95% coverage is talked about, it is that 5% that's very difficult to solve. And it's very serious for that 5%. And that 5% is disproportionately remote and rural Scotland. And it always strikes me that if you go, as we've heard, to the Shetland Isles or you go to Norway, Svalbard Islands, you've got tremendous broadband coverage. But if you come to my remote and rural Dumfries and Galloway, there's a place called the Isle of Whithorn.
It's not even actually an island, but the broadband there is dreadful. So am I right in saying, and I want to misquote you, but is there something in throwing more money at this? Is that really the fundamental problem here? And also you're talking about the peculiarities of Scotland. Is there something in the difficulties of achieving wayleaves and access and things like that? Is there something that could be done about that? If we were to declare this critical national infrastructure and smash through things, would that help?
It's not even actually an island, but the broadband there is dreadful. So am I right in saying, and I want to misquote you, but is there something in throwing more money at this? Is that really the fundamental problem here? And also you're talking about the peculiarities of Scotland. Is there something in the difficulties of achieving wayleaves and access and things like that? Is there something that could be done about that? If we were to declare this critical national infrastructure and smash through things, would that help?
09:38
Speaker 2
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Speaker 2
I go first, I think, in terms of the the importance of telecoms to society. No, maybe in the 70s or 80s it was a nice to have. Now it's an essential. Every home in the UK has some sort of connected device, and the amount of device and the amount of everyday life that everybody in society uses online is almost feels like it's on an exponential increase. So the, the haves and the have nots and feel feels like it. And I would also, if you, if you wouldn't mind , say that the point around critical national infrastructure and some of the powers equally applies in repair.
We've had some bad weather in the last in the last in the last few days, and the ability to go in and act more like some other some other sectors would add value across all companies here. I've no doubt, certainly for Openreach, and that we would be able to do things more off our own direction because it's the right thing to do to provide connectivity. So I think there is value in having a conversation about the the scope of powers the telecoms companies, companies have obviously within our remit. And then again, back to my point from probably a previous question, it makes it easier to deploy.
So therefore the amount of funding required comes down and we can build further. So there is an aspect of it is, you know, if there's if the subsidies there are every organisation would be able to go off and build it. And we're doing gigabit and are 100. But if we can make it easier to build as well, that has value.
We've had some bad weather in the last in the last in the last few days, and the ability to go in and act more like some other some other sectors would add value across all companies here. I've no doubt, certainly for Openreach, and that we would be able to do things more off our own direction because it's the right thing to do to provide connectivity. So I think there is value in having a conversation about the the scope of powers the telecoms companies, companies have obviously within our remit. And then again, back to my point from probably a previous question, it makes it easier to deploy.
So therefore the amount of funding required comes down and we can build further. So there is an aspect of it is, you know, if there's if the subsidies there are every organisation would be able to go off and build it. And we're doing gigabit and are 100. But if we can make it easier to build as well, that has value.
09:40
09:40
Patricia Ferguson
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Patricia Ferguson
I think there's a lot of what Gareth said. That's true. I think from our point of view. I mean, it was interesting that he mentioned the passive infrastructure product that that we have that that's it is available. The ducts and the the poles. And we as an altnet, an alternative network provider, use those, as do a lot of our colleagues in the industry right across the country, but they don't provide it for free. And in Scotland, obviously, one of the main challenges is the distances between the properties, the distances that we have to cover to get between communities, and it's charged according to the distance.
So it is fundamentally more expensive for us to deliver in Scotland, that it might be to do a similar number of properties elsewhere in the country. So, you know, I think that's something to think about. I, I think with the land access points, I think pretty much everybody in the telecoms industry would say the same thing. But, you know, the Electronic Communications code is reasonably proactive. And, you know, we do have that. I think there are some specific issues around some of the multiple dwelling units that that we are particularly challenged in Scotland over. And I think that's something that maybe we can explore more.
But I think overall, more money. Absolutely. But perhaps a more proactive approach that's that's focused on Scotland in terms of how that money is deployed would be interesting.
So it is fundamentally more expensive for us to deliver in Scotland, that it might be to do a similar number of properties elsewhere in the country. So, you know, I think that's something to think about. I, I think with the land access points, I think pretty much everybody in the telecoms industry would say the same thing. But, you know, the Electronic Communications code is reasonably proactive. And, you know, we do have that. I think there are some specific issues around some of the multiple dwelling units that that we are particularly challenged in Scotland over. And I think that's something that maybe we can explore more.
But I think overall, more money. Absolutely. But perhaps a more proactive approach that's that's focused on Scotland in terms of how that money is deployed would be interesting.
09:41
John Cooper
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John Cooper
And if I could come to you, one of the things that the Pharos demonstrates very clearly is that depopulation is the killer for remote and rural areas right across the world. Having jobs, having connectivity in your area, is that something that you can reverse or at least slow down depopulation? Have you found that?
09:41
Speaker 3
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Speaker 3
Yes, definitely. So in the area we operate, we've actually seen population increase. And having a reliable internet has been part of that success story. So we've actually seen people come into the Small Isles. Knoydart Elgol many people are coming with new skills now. They're not coming as a joiner or say, a builder. They're coming as maybe someone who works in accounts or online based remotely, that kind of thing. So what we've done, we've seen it has stabilised population, if not enabled us to increase the population in these areas and encourage young families in as well, which has been good.
So I would like to just go back to your question as well, if that's okay, just to touch on that in your in your area as well with the, the poor internet there, I do feel with the copper telephone lines that your people in your area have, they're kind of at the end of their life now. And I just feel that with these, you hear these stories of this this hamlet with broadband is terrible. And then you go over the hill and they're fantastic. Over the next bit, you kind of hear this everywhere. And it's, it's almost like there's this lack of resource or planning when we're going through these projects to even think, well, we know these guys have got a terrible service here.
What can we do to improve it medium term? So we maybe even retain the custom because what we see is many people, especially on the Isle of Skye, they're leaving the traditional copper telephone lines or even fibre, some of them, and they're just moving to Starlink because it's a combination of unreliable service. They find it maybe expensive, or they're just fed up with poor customer service, whereas the alternative product out there seems to be reliable and doesn't give them any hassle.
And that's.
So I would like to just go back to your question as well, if that's okay, just to touch on that in your in your area as well with the, the poor internet there, I do feel with the copper telephone lines that your people in your area have, they're kind of at the end of their life now. And I just feel that with these, you hear these stories of this this hamlet with broadband is terrible. And then you go over the hill and they're fantastic. Over the next bit, you kind of hear this everywhere. And it's, it's almost like there's this lack of resource or planning when we're going through these projects to even think, well, we know these guys have got a terrible service here.
What can we do to improve it medium term? So we maybe even retain the custom because what we see is many people, especially on the Isle of Skye, they're leaving the traditional copper telephone lines or even fibre, some of them, and they're just moving to Starlink because it's a combination of unreliable service. They find it maybe expensive, or they're just fed up with poor customer service, whereas the alternative product out there seems to be reliable and doesn't give them any hassle.
And that's.
09:43
John Cooper
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John Cooper
Is that a particular issue for Britain, where we are trying to introduce a new system on top of an existing legacy system, some countries where they have effectively nothing. They've had no telephone network. Actually, they are ahead of us in the introduction of broadband because they're not trying to work with an old legacy system.
09:43
Speaker 3
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Speaker 3
I think potentially, and maybe the their networks, they've had lots of small networks, maybe. So it's maybe not so joined up, but the core infrastructure is joined up and everyone's linking into that wherever they can. And as Fiona said, with the passive infrastructure, obviously there's costs associated with we we don't use any infrastructure. BT Openreach infrastructure other than the main fibres that go from, say, Mallaig to Edinburgh or Glasgow, that core infrastructure. We would like to use more infrastructure as such as a subsea fibre that was laid in 2022 to the island of egg, but that's been dormant now for four years, and we believe it's another two years before that's going to be activated, so we can't access that.
Unfortunately, if we could, we could obviously improve experience for our customers. But at the moment it's we kind of, for whatever reasons, contracts, things like that, we just can't access that. So again, that's something where it's so frustrating for us. We can see it just can't. We just can't quite touch it yet, which is very difficult for us.
Unfortunately, if we could, we could obviously improve experience for our customers. But at the moment it's we kind of, for whatever reasons, contracts, things like that, we just can't access that. So again, that's something where it's so frustrating for us. We can see it just can't. We just can't quite touch it yet, which is very difficult for us.
09:44
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09:45
Speaker 2
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Speaker 2
Yeah, I think it was describing it more in the success of no. There is tangible outcomes. We see communities that have service that they wouldn't have otherwise otherwise have got, I think the R1R 100 programme with its three lots was one that that has caused, you know, there's different success rates in each one. What I would actually do is because you will get a less perfect answer from me, Rob who's lived and breathed R 100 for the whole lifetime of it, is a much better person to answer that, if you wouldn't mind.
Okay.
Okay.
09:45
Speaker 1
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Speaker 1
I'll try, I think. I think first and foremost, I can totally understand the 2021 commitment that was the Scottish Government commitment that everyone had access to superfast broadband, and we were proud to be partnering up with the Scottish Government on their delivery ambitions. As Garrett said, there's three contracts with different milestone dates, different requirements inside them, and the North Lot particularly has an end date of March 2028, which has always been in place. So we've been working proactively right across the highlands of Scotland, and it will include the connection of the subsea cable to the island of egg, likely next year.
On the conclusion we're working other island communities, we've built off the back of the subsea connections already in many of the communities up in Orkney, for example, Westray, Sanday, I'd. It goes on and they're all live and all connected and all gaining the benefits of broadband. That's come through the R 100 programme. And the challenge for us now is actually how we blend Project Gigabit and R 100 together. And the ask of both governments is that we do that as effectively as we can. And so that may lead to some level of manoeuvre where it makes sense and more efficient to deploy services in a combined fashion as opposed to a singular fashion.
And from our point of view, that does create efficiencies, which is what we're driving. Good example is the Western Isles. The Western Isles itself is in both contracts, both going to have amazing outcomes at the end. And I think from our perspective, that's what the focus is now on combining the programmes and maximising the investment and the efficiency that we can get from every pound.
On the conclusion we're working other island communities, we've built off the back of the subsea connections already in many of the communities up in Orkney, for example, Westray, Sanday, I'd. It goes on and they're all live and all connected and all gaining the benefits of broadband. That's come through the R 100 programme. And the challenge for us now is actually how we blend Project Gigabit and R 100 together. And the ask of both governments is that we do that as effectively as we can. And so that may lead to some level of manoeuvre where it makes sense and more efficient to deploy services in a combined fashion as opposed to a singular fashion.
And from our point of view, that does create efficiencies, which is what we're driving. Good example is the Western Isles. The Western Isles itself is in both contracts, both going to have amazing outcomes at the end. And I think from our perspective, that's what the focus is now on combining the programmes and maximising the investment and the efficiency that we can get from every pound.
09:47
Douglas Lumsden
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Douglas Lumsden
Robert, what strikes me is if R 100 and superfast broadband has been such a success, why do we have companies like Airbnb having to do their own thing? Because they probably feel abandoned. I'm not going to put words into your mouth, Ian, but probably feel abandoned by by Openreach because they haven't moved as fast as as they maybe should have. And then communities are having to do their own thing.
09:47
Speaker 1
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Speaker 1
I can fully understand that. And we set out on the ambition that we would love to cover 100% of Scotland where we could with the technology, but we recognise that alternative solution and complementary solutions are available and will be used by by customers the length and breadth of the country. I think what we are focused in on one was our commercial build programme that has driven hard and as deep as we can, and we're proud that we're one of only one of we're the only provider, really, that's thriving in rural parts of Scotland in a commercial fashion.
But secondly, in terms of the rollout, there's always a start, middle and end in terms of the rollout sequences. And I've worked closely with a number of MPs and MSPs to try and understand and deal with priorities and challenges that have gone through over the last five years, particularly. And I think my understanding is Mailbags are getting less as a result of the coverage that's coming through, but there are still challenges remaining, and we're really now working on Project Gigabit to deliver even more connectivity over the next few years in a number of your constituencies.
But secondly, in terms of the rollout, there's always a start, middle and end in terms of the rollout sequences. And I've worked closely with a number of MPs and MSPs to try and understand and deal with priorities and challenges that have gone through over the last five years, particularly. And I think my understanding is Mailbags are getting less as a result of the coverage that's coming through, but there are still challenges remaining, and we're really now working on Project Gigabit to deliver even more connectivity over the next few years in a number of your constituencies.
09:48
09:48
Speaker 3
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Speaker 3
I would say the voucher scheme for us has been successful because it's, it's more maybe more geared up for smaller old nets people that the main scheme, it certainly seems to be slow or slower than a lot we'd hoped. And there's many people still struggling with poor broadband. And I know the voucher scheme is being wound up in November this year. And there's if you look on the various websites available for broadband availability, there's there's no plan for those properties. So it may get pulled up in gigabit project gigabit. But again, that's going to be 2030 onwards before those properties are going to see any any difference in what they get.
And I like I mentioned earlier, these properties want it now today , unfortunately, which is 2030, they're going to leave whatever they currently have and go to alternate products. I suppose there's a risk that we we get the fibre out to everybody, but many of them have decided the alternative product is more than ample for them, and then has all the effort to get the fibre out to everybody. Is that going to be a wasted effort? So there may be some kind of maybe even have to draw a line to some extent that certain properties that meet certain criteria, it's it's too much effort, maybe, I don't know, but it's every area is different as well.
You can't it's very difficult to put like a one size fits all on everything with these things , because what works? See, where I operate with Hebner, we work well in our area. It doesn't mean our model will work well on another location, which is a kind of. Yeah, it's kind of the kind of the challenge and. We're kind of like a success story, if you like, of our area. But like I said, I wouldn't like to say we work here, we work everywhere. It's there are bits where you just need Openreach to put the fibre in and then, you know, the open market takes over and you get your broadband from whoever.
I think that it does need that balance of sometimes small scale, sometimes large scale to , to kind of do it. Yeah.
And I like I mentioned earlier, these properties want it now today , unfortunately, which is 2030, they're going to leave whatever they currently have and go to alternate products. I suppose there's a risk that we we get the fibre out to everybody, but many of them have decided the alternative product is more than ample for them, and then has all the effort to get the fibre out to everybody. Is that going to be a wasted effort? So there may be some kind of maybe even have to draw a line to some extent that certain properties that meet certain criteria, it's it's too much effort, maybe, I don't know, but it's every area is different as well.
You can't it's very difficult to put like a one size fits all on everything with these things , because what works? See, where I operate with Hebner, we work well in our area. It doesn't mean our model will work well on another location, which is a kind of. Yeah, it's kind of the kind of the challenge and. We're kind of like a success story, if you like, of our area. But like I said, I wouldn't like to say we work here, we work everywhere. It's there are bits where you just need Openreach to put the fibre in and then, you know, the open market takes over and you get your broadband from whoever.
I think that it does need that balance of sometimes small scale, sometimes large scale to , to kind of do it. Yeah.
09:50
09:51
Patricia Ferguson
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Patricia Ferguson
I can really only speak to Project Gigabit because obviously we're not involved in our 100. I mean, as I said, we we have made a success of Project Gigabit. We we started by doing two small contracts in the north east of England. And we were actually the first company in the whole of the UK to finish a project gigabit contract. And we've taken the learning from those smaller contracts and brought them into the bigger contracts that we're now delivering in Scotland. So we have found a way to to work with both governments and and to make a success of that.
But, you know, there are there are some challenges. And I think the fact that our 100 is still kind of out there does you know, we see areas where there are 100 properties and project gigabit properties and commercial properties, and actually we deliver commercial properties in Scotland as well, not just Openreach. So, you know, there is a little bit of a kind of perhaps a little bit of difficulty at the edges. And I understand where Ian's coming from that, that perhaps we need to have a little bit more of a kind of joined up approach.
I mean, it's Openreach are clearly really good at this. You know, they are the incumbent. They're here for a reason. But from from my point of view, I've got a ten year history working in the alternative network sector. And you know, it was it was our creation and drive in the late 20 tens that that drove the full fibre rollout to the to the point that it is, you know, Openreach were playing catch up in that they would have they would have, you know, sat back on their laurels a lot longer. And and I think that is their , you know, that is their kind of preference, really.
They do things at their own pace. And we're trying to, you know, get everything done faster. So we would like to see more support for, for companies like ours, smaller companies that are really hyper local, focused. We're doing great things in the community. We're delivering, you know, benefits beyond just the broadband that we're bringing. And we'd just like to see more support, more funding, more more interest and engagement as well.
But, you know, there are there are some challenges. And I think the fact that our 100 is still kind of out there does you know, we see areas where there are 100 properties and project gigabit properties and commercial properties, and actually we deliver commercial properties in Scotland as well, not just Openreach. So, you know, there is a little bit of a kind of perhaps a little bit of difficulty at the edges. And I understand where Ian's coming from that, that perhaps we need to have a little bit more of a kind of joined up approach.
I mean, it's Openreach are clearly really good at this. You know, they are the incumbent. They're here for a reason. But from from my point of view, I've got a ten year history working in the alternative network sector. And you know, it was it was our creation and drive in the late 20 tens that that drove the full fibre rollout to the to the point that it is, you know, Openreach were playing catch up in that they would have they would have, you know, sat back on their laurels a lot longer. And and I think that is their , you know, that is their kind of preference, really.
They do things at their own pace. And we're trying to, you know, get everything done faster. So we would like to see more support for, for companies like ours, smaller companies that are really hyper local, focused. We're doing great things in the community. We're delivering, you know, benefits beyond just the broadband that we're bringing. And we'd just like to see more support, more funding, more more interest and engagement as well.
09:53
09:53
Speaker 1
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Speaker 1
I think we're already doing it. I think it started I think the fact that we were running both contracts. So we're running the A100 contracts with the Scottish Government and we're running Project Gigabit, which is managed by the Scottish Government and interface with both the UK government and ourselves. I think we're already having these open conversations around how do we get the most of the funding that's available, because we do appreciate that capital is challenged. It's really important to maximise the coverage and reach, and we have those conversations around how far do you go and where do you have to deliver that?
There is a cost cap in mind in relation to Project Gigabit, and obviously that is something that we need to consider constantly, which is how far can we push the funding that we have available? And I'd say the key thing that Garrett said, the things that would help move things forward ultimately for us is around access and NDAs. There is a lot of NDAs within the contract areas that we're looking to cover, and the speed and execution getting into those apartments and flats is what can delay US access on land, particularly when we have to build big, long connections.
So the motorway network connecting us to a community tends to be quite far in parts of Scotland and having access to land and really quickly is what causes some of the delays that we have. And equally, when we're trying to deliver on island solutions, it's really important to have pretty much every logistics set up in advance for it. So yeah, I think from our point of view, we're working really well with both governments. There's always more we can do, but I think it's more about the evolution over the next few years, more funding coming through.
Is it enough? We would probably want more to go further, but we have to work with the funding that's available at the moment, and that's what we'd be pressed on both governments for.
There is a cost cap in mind in relation to Project Gigabit, and obviously that is something that we need to consider constantly, which is how far can we push the funding that we have available? And I'd say the key thing that Garrett said, the things that would help move things forward ultimately for us is around access and NDAs. There is a lot of NDAs within the contract areas that we're looking to cover, and the speed and execution getting into those apartments and flats is what can delay US access on land, particularly when we have to build big, long connections.
So the motorway network connecting us to a community tends to be quite far in parts of Scotland and having access to land and really quickly is what causes some of the delays that we have. And equally, when we're trying to deliver on island solutions, it's really important to have pretty much every logistics set up in advance for it. So yeah, I think from our point of view, we're working really well with both governments. There's always more we can do, but I think it's more about the evolution over the next few years, more funding coming through.
Is it enough? We would probably want more to go further, but we have to work with the funding that's available at the moment, and that's what we'd be pressed on both governments for.
09:54
09:54
09:54
Speaker 5
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Speaker 5
Thank you. We are hearing from Openreach a success story broadly, and yet you are implying that there are going to be a group of customers who are going to look for other solutions so that you're never claiming to be able to do 100%. And so there's a number of gigabyte contracts in Scotland which have yet to be awarded. And and what and why are they why is it taking so long to award them and what's causing the delays? I think all of you, if.
09:55
Speaker 3
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Speaker 3
I. Well, we certainly don't answer that. We can't apply for them. We're too small for one. And we don't have a backhaul available to be part of the project gigabit scheme. We would be able to, if we had access to our subsidy, the subsea fibre to the island. But until that happens, we're kind of out of the game effectively for gigabit Project Gigabit.
09:56
Patricia Ferguson
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Patricia Ferguson
It's tricky because we can't comment on on live procurements, but we absolutely have an appetite to to, you know, have more funding and do more. We we have very supportive funders, including the Scottish National Investment Bank. And so, yes, if, if, if there was an opportunity there, we would absolutely be interested and would want to, to apply what we're doing in the other lots in other areas.
09:56
Speaker 2
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Speaker 2
Yeah. And just for Openreach, we have the scale to be able to consume it. So we would absolutely encourage all parties to make it a fast process. And I think that when it's there, we can mobilise quickly and we can go out and we can build it. We have the supply chain there to do it, and we have engineers that work across live and work all across Scotland to do it, both with our own resources and with our partners. So I think it's if there's one thing probably from all of my contributions today, it's about speed is really important in fibre, not just for customers, but actually the speed of deployment and getting it out there and generally fast is efficient.
Efficient is is cheaper, cheaper gets more customers. So speed at every stage of the process would be one that I think we should all focus on.
Efficient is is cheaper, cheaper gets more customers. So speed at every stage of the process would be one that I think we should all focus on.
09:57
09:57
Speaker 2
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Speaker 2
I think within each of the contracts there is a start and an end date. And while everybody would love to have all customers connected on the first day of a contract, the reality is it is a civil engineering contract and some will be done at the start, some will be done in the middle and some will be done at the end. We typically go through cycles of survey and deciding what needs done, deciding the cost, checking the cost per per home, making sure it doesn't breach any thresholds, and then you get on and build. Actually building the start to finish of a build is not typically more than about three months when you decide to build it, but it's the bits around the edges that take the time to get there.
And then there's obviously a schedule to go through it.
And then there's obviously a schedule to go through it.
09:57
09:58
Speaker 2
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Speaker 2
Them on one of our contracts. As soon as we get it, we will start work on it, and then there will be a there's some process back and forth with government departments whenever we're doing these projects, but once we start build, it's about three. It's about three months before that customer gets connected. Whenever we sign new contracts, we want to get off to a flying start. We want to do it, and we want to.
We want to move. The first stage for us is getting out and survey, and we do that reasonably quickly.
We want to move. The first stage for us is getting out and survey, and we do that reasonably quickly.
09:58
09:58
Speaker 2
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Speaker 2
I think it's very understandable that everybody wants this product. Right. And for, for for all of us on the panel, I assume, and we mentioned it earlier on demand and people wanting to wanting to buy the product is, is crucial to our business and our business success. We, we are motivated to actually get people connected because that's how we get a return. We want people to buy our service too. So it's not that it's, we're holding people back and we don't want to do it. It's a, it's a commercial imperative for us to get people to connect the network.
But there's also the practical challenges of building a network at scale over, over geographies, I think is part of the both our 100 and gigabit. There are certain premises identified. There's certain premises not. The scheduling is always part of a conversation with government that maybe Robert will have some of the the insight on that. But there will always be customers at the start, the middle and the end of these projects, and that, I suspect, would be the same for every fibre broadband provider, both in the UK and the world.
But there's also the practical challenges of building a network at scale over, over geographies, I think is part of the both our 100 and gigabit. There are certain premises identified. There's certain premises not. The scheduling is always part of a conversation with government that maybe Robert will have some of the the insight on that. But there will always be customers at the start, the middle and the end of these projects, and that, I suspect, would be the same for every fibre broadband provider, both in the UK and the world.
09:59
10:00
Speaker 2
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Speaker 2
I think it's the number of companies is a is a secondary. It's the number of homes you need to do, the amount of funding that's available and the supply chain to deliver it. Now, how many legal constructs you have involved in that process, I would actually suggest probably slows it down because again, scale is important, but for me, it's about the quick procurement, the getting it out there, getting it, then having the scale of the operation to go out and deploy it. So I'm not sure the legal entities in the met would change in a huge amount, but it is the supply chain.
10:00
10:00
Patricia Ferguson
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Patricia Ferguson
I mean, I agree quick procurement is is great. The faster we can get through the early stages of the procurement phase, the faster we can deliver to the customers. I, we , we plan meticulously. We, we survey. So there are there are stages in the contract delivery that allow for that. And as you say, there are milestones that that match that requirement. And we deliver all of those milestones well ahead of schedule. The problem, as I mentioned earlier, is, is in that is in that identification of the subsidised properties, which can change if the slower the procurement is, the more change there is, and therefore it becomes a kind of self-fulfilling prophecy that that it slows the whole thing down because you're having to redesign to accommodate the delivery that has suddenly appeared out of nowhere, even though it wasn't flagged in an open market review at the start of the procurement.
So, you know that speed has a as a benefit in all sorts of ways. But absolutely, from the point of view of, of getting to those properties quicker and in a more joined up and an efficient way. Thank you. Morning, Burke.
So, you know that speed has a as a benefit in all sorts of ways. But absolutely, from the point of view of, of getting to those properties quicker and in a more joined up and an efficient way. Thank you. Morning, Burke.
10:01
10:02
10:02
10:02
Patricia Ferguson
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Patricia Ferguson
I think there's an interesting point and probably we would agree on this, that that there may be different approaches for for different levels of rurality. Because how we define rural and urban I think is potentially very tricky actually, because and in the end, we're building a network and it has to connect. I mean, I'm not going to talk about engineering when I've got Garrett here, but, you know, everything has to connect together and you have to bring it from where the, you know, the backhaul is and where the, you know, the main cables are coming from.
So it's a, it's an engineering challenge as much as anything. But I think you're right that the policy design has to recognise that and maybe adapt so that some of the, what we might call slightly easier to deliver rural properties, get a different approach to what we then might, you know, decide to call the very hard to reach properties or, you know, those those, those properties are at the edge. And, you know, obviously Ian has has experience in that. But I think there's a, I think the, the further out that we get, almost the more collaboration, the more industry wide approach we need to so that we can, you know, we can all work together on those ones.
So it's a, it's an engineering challenge as much as anything. But I think you're right that the policy design has to recognise that and maybe adapt so that some of the, what we might call slightly easier to deliver rural properties, get a different approach to what we then might, you know, decide to call the very hard to reach properties or, you know, those those, those properties are at the edge. And, you know, obviously Ian has has experience in that. But I think there's a, I think the, the further out that we get, almost the more collaboration, the more industry wide approach we need to so that we can, you know, we can all work together on those ones.
10:03
Speaker 1
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Speaker 1
To that? I would just say, just to echo just something I'd said previously, I think that there is a policy in place between the Scottish and UK governments around reaching rural in the Highlands and Islands. I think, as we've talked about, our our 100 programme in the North is predominantly driven through authorities both Shetland, Orkney, Western Isles and Highland and Argyll and Bute, and we recognise the challenges that they bring. On top of that, we've now got Project Gigabit that will enhance coverage even further in a number of those areas. And again, I highlighted the Western Isles, where as a result of the Project Gigabit, around 50% growth in coverage is going to happen as a result of the programme that we do on the island groups, I would say that's some of the most challenging build is in the Western Isles, but equally we have islands, we have mainland that that needs to be connected.
And Fiona raises a really great point in that whilst it is really important to invest in rural because of the de-population, the attraction of people to come and live and work there, we are still hearing challenges in our towns and our cities that equally should be benefiting as well and where it needs some public subsidy. So it's trying to get that balancing act really clear. But I do think there is a policy in place, and we've already seen first hand the investment being made in those rural locations and customers and people are delighted when our engineers turn up to build it.
I've got lots of fantastic emails and people saying how amazing they are feeling, both in a number of your constituencies that we've had community events. And so I think the communication angle is there and it will need more funding to go even further, depending on the capacity of governments and the subsidy available. Thank you, thank you.
And Fiona raises a really great point in that whilst it is really important to invest in rural because of the de-population, the attraction of people to come and live and work there, we are still hearing challenges in our towns and our cities that equally should be benefiting as well and where it needs some public subsidy. So it's trying to get that balancing act really clear. But I do think there is a policy in place, and we've already seen first hand the investment being made in those rural locations and customers and people are delighted when our engineers turn up to build it.
I've got lots of fantastic emails and people saying how amazing they are feeling, both in a number of your constituencies that we've had community events. And so I think the communication angle is there and it will need more funding to go even further, depending on the capacity of governments and the subsidy available. Thank you, thank you.
10:05
10:05
10:05
Speaker 3
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Speaker 3
Okay. So in terms of the voucher scheme, we obviously were planning our our build without it. And and then we became part of it. What it enabled us to do was to, rather than take several years to do some projects or upgrade infrastructure, it rather than it was more like months and a year or two. So it's enabled us to bring our network up to a standard where typically our, our fibre side of the network, we've got about 60% of our customers are on fibre. So it's radio fed fibre, but it's still fibre to the premises.
So it enabled us to get to that point a lot quicker. And we we plan to get to around 90% of our customers onto fibre over the next couple of years with the kind of tail end of the voucher scheme. So it's just accelerated what we can do and it's obviously opened up. Us. We're able to offer commercial customers products now, which wouldn't be available to them previously as well. So it helps support some of the businesses in the area do more than they would have done previously as well. So it's kind of it's enhanced our commercial side of the business as well, which helps maintain our residential kind of cost model for our customers.
So we operate on a, on a model, if you like, where we try to keep the residential cost as low as we can for that side of the business and the commercial customers pay, say a little bit more for elevated service. And that kind of subsidizes for our residential customers because it's not been touched on yet. But, but the in these rural areas as well, often the average income is a lot lower than, say, in cities and places like that. So affordability is something that's kind of important to us. So our customers pay what I would say is a very low cost for their service, but get a very good product in some areas that I've been to, which are outside of where we operate.
Unfortunately, those customers have only got, say, two options and both are expensive or above average for broadband service. But ultimately they have to have it. So we typically save our residential customers £25 a month, roughly on the average cost of broadband. So with the voucher schemes helped us is that we've not had to put up their prices as well to subsidise or to basically pay for our upgrades. So we've been able to upgrade our infrastructure through the voucher scheme, deliver them a good, good service, but maintain a low price.
So it enabled us to get to that point a lot quicker. And we we plan to get to around 90% of our customers onto fibre over the next couple of years with the kind of tail end of the voucher scheme. So it's just accelerated what we can do and it's obviously opened up. Us. We're able to offer commercial customers products now, which wouldn't be available to them previously as well. So it helps support some of the businesses in the area do more than they would have done previously as well. So it's kind of it's enhanced our commercial side of the business as well, which helps maintain our residential kind of cost model for our customers.
So we operate on a, on a model, if you like, where we try to keep the residential cost as low as we can for that side of the business and the commercial customers pay, say a little bit more for elevated service. And that kind of subsidizes for our residential customers because it's not been touched on yet. But, but the in these rural areas as well, often the average income is a lot lower than, say, in cities and places like that. So affordability is something that's kind of important to us. So our customers pay what I would say is a very low cost for their service, but get a very good product in some areas that I've been to, which are outside of where we operate.
Unfortunately, those customers have only got, say, two options and both are expensive or above average for broadband service. But ultimately they have to have it. So we typically save our residential customers £25 a month, roughly on the average cost of broadband. So with the voucher schemes helped us is that we've not had to put up their prices as well to subsidise or to basically pay for our upgrades. So we've been able to upgrade our infrastructure through the voucher scheme, deliver them a good, good service, but maintain a low price.
10:07
10:08
Speaker 3
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Speaker 3
Yes, definitely. So it would have taken us longer to implement, and we probably would have had to look at price rises to, to, to help pay for it. Move it along was because of the voucher scheme. We've had to do neither of those things because we've been able to do it as solar, and we've been able to grow the business as well as part of the whole thing.
10:08
10:08
Patricia Ferguson
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Patricia Ferguson
We we have used the voucher scheme in the past, but at the moment we are focusing really on on our project gigabit delivery. That's actually, it just suits the way that our company set up at the moment. We're really geared up to, to deliver those big contracts, but I think that's a, it's an example of what we were talking about just a minute ago about maybe a different policy approach for different challenges. And certainly if you're getting out to the to the remoteness that Ian's dealing in, then you can see that at the edge, you know, vouchers may well be the best way to, to make sure you're targeting that spending at the people who really need it.
And in, in a, in a way that where I mean, I know with voucher schemes that I've had experience of in the past, the good thing is that you're delivering to people who actually want it, you know, they're participating in the process of getting that voucher. So they're invested in, in that delivery to them.
And in, in a, in a way that where I mean, I know with voucher schemes that I've had experience of in the past, the good thing is that you're delivering to people who actually want it, you know, they're participating in the process of getting that voucher. So they're invested in, in that delivery to them.
10:09
10:09
10:09
Speaker 1
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Speaker 1
It's a matter for government to decide. Ultimately, if they're able to service customers outside Project Gigabit, like our Openreach is focused on the 100 delivery and on Project Gigabit. We have actively used vouchers previously, both with the UK government and the Scottish Government. It was successful to bridge the gap between contracts and blending communities at the time. But yeah, from our point of view, at the moment we're just focused fully on delivery of our contract infrastructure and pushing it as far as we can get.
10:09
10:10
10:10
Patricia Ferguson
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Patricia Ferguson
Well, I wonder whether it could be improved. Yes. I mean maybe it's not appropriate for the likes of Openreach to have access to the vouchers, but it's certainly appropriate for, for for Ian. So I think there's definitely a horses for courses approach there isn't there. Yes. I think it would be worth looking at.
10:10
Speaker 3
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Speaker 3
Yes. It's certainly a shame that there's nothing to replace it because there's, there's there's thousands of properties that are going to be affected by this. And it's either going to cost those households personally, they're going to have to pay extra for satellite or to ask Openreach to put a fibre to their property, that kind of thing. So it would be nice to have something to come in. And I suppose for us for Net, once we've completed our core network, there would be potential opportunity to a few other areas where we could expand our business if the voucher scheme was still active.
Whereas at the moment, once we've completed our area without a voucher scheme or any incentive, we will not go beyond that.
Whereas at the moment, once we've completed our area without a voucher scheme or any incentive, we will not go beyond that.
10:11
10:11
10:11
10:11
Speaker 3
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Speaker 3
Yeah. Ultimately satellite services, if there was more competition for satellite, it would be better. But again, that's not an easy. You can't just put lots of satellites up and offer an alternative product. Whereas obviously with fibre, you could put you could have two fibre networks in an area for competition. But yeah, ultimately for most people, it's going to be the recommendation would be to go satellite unfortunately. Yeah.
Thank you Chair.
Thank you Chair.
10:11
10:11
Kirsteen Sullivan
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Kirsteen Sullivan
Throughout this session you've all spoken about the need for more funding. So I guess my question around this current level of funding from UK government for Project Gigabit sufficient, I think I'm hearing at the moment that no, correct me if I'm wrong, please. But it also sounds as if you're maybe suggesting that there needs to be something a little bit more bespoke to reflect the very distinctive challenges that there are in Scotland. Would that be the case?
10:12
Speaker 2
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Speaker 2
I think that the how far the coverage reaches inside Scotland is ultimately a governmental decision, whether it be Scottish Government or Westminster decision. I said at the start, it's technically possible to do. It's about how much funding and support and we had a little bit of conversation there about, about, about vouchers as being one of the methods of funding but equally fully funded project gigabit to, to deliver 100% is another policy way of doing it. And I'm sure there would be others. So, so I think that's the bit for me. It's, you know, what, what does society government want to achieve?
And then what can the industry do to deliver that as quickly and as fast as possible?
And then what can the industry do to deliver that as quickly and as fast as possible?
10:13
10:13
10:13
10:13
Speaker 2
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Speaker 2
Yeah, typically whenever we respond to bids and it will be the same, I suspect for everybody. No. You're asked. No. How much is this going to cost to do and you give a price. I don't think any provider would go in and know and say they could do it for, for , for under. So I think it's part of that process. What do you want to accomplish as as government, either Scottish Government or Westminster and then what is the process? Deliver the cost from from all the organisations that take part.
10:13
10:14
10:14
10:14
Speaker 2
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Speaker 2
I think the one I would add to your list is the Multi-dwelling unit. So I think we have a few times described as Mdus, but that can be both a series of flats and apartments. It can also be multi business units. But do I think there is there is some disparity between the the legislative approach in England versus Scotland. I think there's there's work that we could do to to make that consistent so that if a if a landlord or somebody who's required to give permission is absent or we can't get in contact in England, there is a process to handle that that doesn't necessarily apply in Scotland.
So because we we are as we approach this, we can talk about, you know, people who live in a very rural environment as well. There's people in rural environments, people on the Scottish islands who live in multi-dwelling units where this could potentially be an issue as well. So I would add Multi-dwelling unit and the ability to proceed in those buildings if the landlord is absent, is one of the one of the things I would put on to the list.
So because we we are as we approach this, we can talk about, you know, people who live in a very rural environment as well. There's people in rural environments, people on the Scottish islands who live in multi-dwelling units where this could potentially be an issue as well. So I would add Multi-dwelling unit and the ability to proceed in those buildings if the landlord is absent, is one of the one of the things I would put on to the list.
10:15
Kirsteen Sullivan
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Kirsteen Sullivan
I think there has been a rightful focus on the rural areas that very often face a rural penalty in so many ways, whether it's transport or or connectivity, housing as well. But do you think perhaps we've overlooked some of the challenges in the towns and cities as well? Do you think there as well articulated?
10:15
Speaker 1
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Speaker 1
I think just as I echoed, I think we shouldn't forget about our cities and large towns as the challenges there. I think there's an expectation that commercial providers like ourselves and indeed others would just deliver that, that connectivity, and we don't need to intervene. But there's quite a lot of reasons why we do need state subsidy to intervene in your cities and large towns. And I think that's now being recognised more through the market consultations that's now going out publicly. It's including more of those locations that weren't available previously to be considered for subsidy. So I think we welcome that opportunity to now revisit areas.
It could be in Glasgow, could be Edinburgh, could be Aberdeen that haven't yet been completed commercially and are not planned to be. And they can then be eligible for public subsidy. I think that's the right decision and one we welcome.
It could be in Glasgow, could be Edinburgh, could be Aberdeen that haven't yet been completed commercially and are not planned to be. And they can then be eligible for public subsidy. I think that's the right decision and one we welcome.
10:16
Kirsteen Sullivan
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Kirsteen Sullivan
And what action do you do you want to see from government and industry to remove some of those barriers? You talked about the different legislative landscape in Scotland and England, where we might have issues in Scotland and in being able to proceed where we can't contact landlords. Is that something you would like to see change? Has that been raised with government?
10:17
Speaker 1
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Speaker 1
I think as we we welcome the sort of constitutional discussion around the leasehold Bill in England and allowing more access in England, but. But sadly, that doesn't support Scotland at all in the sense of the leasehold approach because we're freehold. So we would really encourage both governments to talk about what they can do to level the playing field around access, looking at, say, the constitutional changes that are coming through and how both governments can deliver on that. We are continuing to work and we will continue to drive hard to access any flats and apartments that we can get agreement to do.
I've got a team dedicated to do that. Every day we trap doors, we speak to customers, we are actually engaged, and I know many of the tenants who live there want the service, but it's actually sometimes blocked from being able to give them it, which is really frustrating.
I've got a team dedicated to do that. Every day we trap doors, we speak to customers, we are actually engaged, and I know many of the tenants who live there want the service, but it's actually sometimes blocked from being able to give them it, which is really frustrating.
10:17
10:17
Patricia Ferguson
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Patricia Ferguson
To that? We are absolutely support Openreach and we've we've actually we've discussed this as well. And you know, the Mdus are a challenge because of that specific different approach to, to, to those multiple dwelling units. So we would be able to get more people connected if we could address that problem. Certainly, I think from the point of view of the sort of the wider question, you know, I think I know it was Garrett or Robert mentioned earlier that kind of raising the profile of what we're doing. You know, we're bringing the connectivity and the government is supporting that in terms of the funding that it's giving because it sees the benefits, it wants the economic growth.
So it's almost a kind of if we build it, they have to come. You know, we need that that take up. We need the people to, to, to sign up to the, you know, the broadband deals that are then available to them on this, this new network that we're bringing. And, you know, from our point of view, and I'm sure Ian would agree, we want them to support their local Scottish companies as well. So, you know, we've got to see that realization that we need that connectivity to grow as a as a country.
So it's almost a kind of if we build it, they have to come. You know, we need that that take up. We need the people to, to, to sign up to the, you know, the broadband deals that are then available to them on this, this new network that we're bringing. And, you know, from our point of view, and I'm sure Ian would agree, we want them to support their local Scottish companies as well. So, you know, we've got to see that realization that we need that connectivity to grow as a as a country.
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10:19
Speaker 3
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Speaker 3
It would be, I think, for us as a smaller company, certainly we use a lot of radio links in the Highlands to overcome. Obviously, we have connections that go across water, so we use microwave wireless links. The way Ofcom is set up, it's like a it's like a standard UK model for pricing, whereas where we operate there's not really any competition as such. So it would be nice to to have a bit more flexibility with the pricing models in our area and potentially the frequency bands we could use, because it's not like a city where you're going to have lots of commercial operators that want certain bandwidth or certain frequencies.
Where we are, it's just us. So we feel like the the Ofcom model, we effectively have to pay a lot of money for something that if you lived in a town or a city, you would just have a fibre optic connection for the equivalent product. So I can give you an example for just as you can kind of understand the kind of the challenges we have for us to have an open reach fibre connection to the island of EG, that would cost us, say, £10,000 for a number, and that would give us ten, ten gigabytes, 10,000 Meg.
A microwave connection costs us over 5000, but for only one gigabyte. So you can see it's quite expensive for us for one gigabyte, whereas a little bit more money will give us a lot more bandwidth. And it's these kind of challenges where if off, if either Ofcom was cheaper or we could have access easier access to things, it would make our job a lot easier to kind of deliver faster services and things. So that's, that's one thing where we feel like, again, it's like a one size fits all to say Ofcom doesn't strictly work in rural areas, so it needs to be more flexibility maybe.
And also on the contract side for us and probably for Fiona as well. It would be good if in the contract there was a bit more cooperation built in there or common sense, because some areas I'm sure fibre will have existing infrastructure, but there may be a gigabit contract awarded over the top of that for, say, BT Openreach to deliver part of that area, whereas it would make sense with especially with government money, that these areas don't get overbuilt. So for us, for me personally, we've. Hebner, we've. We've built eg with fibre. The island of EG has full fibre to the premises through Hepnet, but BT Openreach I think, have a contract to build, say 30 connections there as part of our 100 contract.
But it seems crazy to overbuild what we've done when Openreach. They could probably build that somewhere else where someone needs it, or there's a demand or resource issues, these kinds of things. So just more, I think cooperation and the the one size fits all, it needs to be flexible. What you know, it can't a one size fits all approach can't be used for these things. Thank you.
Where we are, it's just us. So we feel like the the Ofcom model, we effectively have to pay a lot of money for something that if you lived in a town or a city, you would just have a fibre optic connection for the equivalent product. So I can give you an example for just as you can kind of understand the kind of the challenges we have for us to have an open reach fibre connection to the island of EG, that would cost us, say, £10,000 for a number, and that would give us ten, ten gigabytes, 10,000 Meg.
A microwave connection costs us over 5000, but for only one gigabyte. So you can see it's quite expensive for us for one gigabyte, whereas a little bit more money will give us a lot more bandwidth. And it's these kind of challenges where if off, if either Ofcom was cheaper or we could have access easier access to things, it would make our job a lot easier to kind of deliver faster services and things. So that's, that's one thing where we feel like, again, it's like a one size fits all to say Ofcom doesn't strictly work in rural areas, so it needs to be more flexibility maybe.
And also on the contract side for us and probably for Fiona as well. It would be good if in the contract there was a bit more cooperation built in there or common sense, because some areas I'm sure fibre will have existing infrastructure, but there may be a gigabit contract awarded over the top of that for, say, BT Openreach to deliver part of that area, whereas it would make sense with especially with government money, that these areas don't get overbuilt. So for us, for me personally, we've. Hebner, we've. We've built eg with fibre. The island of EG has full fibre to the premises through Hepnet, but BT Openreach I think, have a contract to build, say 30 connections there as part of our 100 contract.
But it seems crazy to overbuild what we've done when Openreach. They could probably build that somewhere else where someone needs it, or there's a demand or resource issues, these kinds of things. So just more, I think cooperation and the the one size fits all, it needs to be flexible. What you know, it can't a one size fits all approach can't be used for these things. Thank you.
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10:22
Speaker 1
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Speaker 1
So? Firstly, Openreach work in relation to the intervention area and available funding. So EG is available in the intervention area and was presented as part of our original bid in relation to the R 100 delivery plan. That that was funding was agreed. It also included full subsea connections of which we have funded and delivered a subsea connection directly to the island on the basis that we would bring additional connectivity to it and then extend coverage and full fibre, gigabit capable broadband to individual homes and businesses. It's not one I can comment on directly in relation to selecting islands, and not.
There's areas defined by governments that dictate where you can invest and where you shouldn't invest. So it would be a decision for the Scottish Government whether or not we deliver there, because they authorise the build of everything we deliver in relation to our 100. So I think from our end we would we've already started the journey of delivery to EG with the fact the subsea connection is connected, in effect ready to be then used to deliver full fibre services. But as I say, it's a matter for governments to decide what is the intervention area and where do you want funding to intervene.
And that is a legitimate location to intervene.
There's areas defined by governments that dictate where you can invest and where you shouldn't invest. So it would be a decision for the Scottish Government whether or not we deliver there, because they authorise the build of everything we deliver in relation to our 100. So I think from our end we would we've already started the journey of delivery to EG with the fact the subsea connection is connected, in effect ready to be then used to deliver full fibre services. But as I say, it's a matter for governments to decide what is the intervention area and where do you want funding to intervene.
And that is a legitimate location to intervene.
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10:23
Speaker 1
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Speaker 1
But as I as I've said, that location is part of our contract milestones already in place. So from our perspective, again, when we present the work to be done, it's up to the government to decide whether you go ahead with said build or you don't. And that's whether it's in gigabit or whether it's in R 100. Those decisions are taken at different points depending on the requirements of it, as Fiona mentioned, and build can be changed because of another intervention that's occurred in life. And again, we're working very closely with the Scottish Government. We're aware of sensitivities.
When we build network in locations. There may be alternative options and community solutions that have been agreed. But again, we're working on the basis of delivering to the UK, UK strategy of 99% coverage of gigabit by the end of 2032. And we just play our part in delivery.
When we build network in locations. There may be alternative options and community solutions that have been agreed. But again, we're working on the basis of delivering to the UK, UK strategy of 99% coverage of gigabit by the end of 2032. And we just play our part in delivery.
10:24
Lillian Jones
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Lillian Jones
So the the conclusion of the Project Gigabit programme, the government estimates that the hardest, some hardest to reach premises in Scotland will remain without broadband coverage. So is that a fair outcome for those communities that are affected in such areas in Scotland will remain not covered by broadband. We'll start with the parts.
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Speaker 3
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Speaker 3
It's difficult for me, so I don't think it's fair that a lot of these communities are going to miss out. I think there's some some properties are just so difficult to justify. I can understand why BT, Openreach and others maybe never get to them, but thankfully there are alternatives out there. I think it's just for me it's how is it acceptable that there's no competition for that household to choose from at the moment? All these properties that are going to get missed off, if you like , with gigabit, they're effectively the voucher properties, which are just have no alternatives.
Is it fair that they don't have a choice of service? They can get fast broadband, but they don't get to choose where it comes from and how much it costs effectively. And it's whether or not I suppose it's a government thing. If that's deemed as fair or not, I suppose it would be. It would be good that they have both options, but I think there are challenges as well for Openreach in that supporting these connections in very rural areas. Sometimes these lines could be down for weeks because of bad weather, and alternate technologies may give overall better availability to that customer.
So they could live in a rural area. But your internet may only be on for, say, 99% of the time because 1 or 2 days of the year, the bad weather knocks it off, whereas other products out there may be able to give you close to 100% availability, it may cost you a bit more, but you have the availability. And I know certainly from speaking from the islands point of view, I've had experiences where a phone line has gone off on one of the islands and it's taken weeks, if not months to get it fixed.
And if that was a broadband connection, that's just it's just not acceptable. But I appreciate the islands are not easy to get to, and it's that kind of trade off where I guess, where you live or to some extent, but maybe satellite products, they just they're not impacted so much by weather or telephone lines or power going off to, say, the telephone exchange. If the power's been off for 2 or 3 days, I think the telephone exchange will go off as well. So it's a kind of I don't think it's fair. I think it'd be good for customers to have choice, but I think there's an element of it may just may not be achievable to some extent.
Is it fair that they don't have a choice of service? They can get fast broadband, but they don't get to choose where it comes from and how much it costs effectively. And it's whether or not I suppose it's a government thing. If that's deemed as fair or not, I suppose it would be. It would be good that they have both options, but I think there are challenges as well for Openreach in that supporting these connections in very rural areas. Sometimes these lines could be down for weeks because of bad weather, and alternate technologies may give overall better availability to that customer.
So they could live in a rural area. But your internet may only be on for, say, 99% of the time because 1 or 2 days of the year, the bad weather knocks it off, whereas other products out there may be able to give you close to 100% availability, it may cost you a bit more, but you have the availability. And I know certainly from speaking from the islands point of view, I've had experiences where a phone line has gone off on one of the islands and it's taken weeks, if not months to get it fixed.
And if that was a broadband connection, that's just it's just not acceptable. But I appreciate the islands are not easy to get to, and it's that kind of trade off where I guess, where you live or to some extent, but maybe satellite products, they just they're not impacted so much by weather or telephone lines or power going off to, say, the telephone exchange. If the power's been off for 2 or 3 days, I think the telephone exchange will go off as well. So it's a kind of I don't think it's fair. I think it'd be good for customers to have choice, but I think there's an element of it may just may not be achievable to some extent.
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Patricia Ferguson
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Patricia Ferguson
I agree. Actually that's I think that's probably a consensus you'll find across the communications industry that there are just some properties at the edge that will not be reachable with fibre, but that doesn't mean that there aren't other solutions that that can give good connectivity, those properties. I think it's a it's a question then for the government as to how they look at the funding of that, how they support those customers, and how they make sure that they're not being unfairly treated by organisations outside the UK government's control. You know, there are issues with with things like satellite links, aren't there?
So I do think there are. You're right, there's a fairness angle, but there's also an engineering angle to that. And I think we need to find a solution that that serves these properties in the most reliable way that we can for the best use of public There's a fairness angle, but there's also an engineering angle to that. And I think we need to find a solution that that serves these properties in the most reliable way that we can for the best use of public funds.
So I do think there are. You're right, there's a fairness angle, but there's also an engineering angle to that. And I think we need to find a solution that that serves these properties in the most reliable way that we can for the best use of public There's a fairness angle, but there's also an engineering angle to that. And I think we need to find a solution that that serves these properties in the most reliable way that we can for the best use of public funds.
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Speaker 1
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Speaker 1
But it comes at a cost point. And I think that's really what it boils down to. We've had significant investment through the A100 programme, more than. £600 million of funding. On top of that, we secured additional. £177 million so far through Project Gigabit to deliver what we've been asked to do when we go to communities to deliver, we don't just do what we're asked, we do more. So what we're trying to do every time we reach a community is stretch the funding and maximise the coverage and reach. That's how we get closer to closing any gap that is perceived or is unexpected in relation to reaching those final few.
And there will be locations that are a challenge. But I think for us in all the contract owners in relation to gigabit and our 100 are incumbent about trying to stretch the delivery as much as they can. And I think that's what we're all trying to deliver. But Scotland is challenging to deliver on. We have a very unique topology compared to other parts of the UK and but we've demonstrated we have already delivered in .
And there will be locations that are a challenge. But I think for us in all the contract owners in relation to gigabit and our 100 are incumbent about trying to stretch the delivery as much as they can. And I think that's what we're all trying to deliver. But Scotland is challenging to deliver on. We have a very unique topology compared to other parts of the UK and but we've demonstrated we have already delivered in .
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Speaker 3
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Speaker 3
And for the foreseeable future, it is the most. reliable medium. And it provides the the speed today and, crucially, the speed for decades to come. As it's as it's upgradeable. So it is. It is a kind of think, Robert said earlier on. It's akin to building a motorway. It's a thing that exists and persists going on. So it's very. understandable that people would like it because it will allow them not only to be connected today, but into the future. I think one of the one of the aspects that we've talked about is around the competition.
And I think there's different levels of competition. There's the competition that that people pay their who they buy their, their broadband from, and no certainty in terms. One of the things we're very proud of, not only is the work we do with our passive infrastructure to allow other. organisations to build network, but actually we don't sell to customers directly. We've we've upped to 600 providers that sell on Openreach network, and people compete at a retail level for, for service. And, and that happens all over the UK so that the provider in the centre of London can offer services potentially on a Scottish island equally as well.
So I think it's I think the competition point and the reliability point.
And I think there's different levels of competition. There's the competition that that people pay their who they buy their, their broadband from, and no certainty in terms. One of the things we're very proud of, not only is the work we do with our passive infrastructure to allow other. organisations to build network, but actually we don't sell to customers directly. We've we've upped to 600 providers that sell on Openreach network, and people compete at a retail level for, for service. And, and that happens all over the UK so that the provider in the centre of London can offer services potentially on a Scottish island equally as well.
So I think it's I think the competition point and the reliability point.
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Speaker 1
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Speaker 1
Or no? I would want full fibre broadband. Again, from our perspective, I think there is lots of opportunities out there for different products and services. So I think again, driven from the policies, what's right and what's not for for a household is, is a matter for others. From our end, we are focused on delivering full fibre .
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Speaker 3
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Speaker 3
Following conclusion of the programme? It's probably impossible for for. It's probably impossible for us to say no. We. We talked a little bit about the open market review process. That is our forward looking view of the the areas that we plan to go to. But it's very much subject to change based on what happens with project gigabit procurements and the like. I think the question is probably better answered by where is there unlikely to be.
government project, gigabit funding to deliver.
government project, gigabit funding to deliver.
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Patricia Ferguson
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Patricia Ferguson
Is likely to be left out. I think that's probably true. I mean, we we are focused in the in the areas where our where our skills are based, where our people are based. And, and we're expanding up to the north east coast now and building out that network and that presence. You know, we, we are subject to, to those projects, gigabit.
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Patricia Ferguson
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Patricia Ferguson
If if more project gigabit procurements are available, then we will absolutely look at delivering those. But I think I think that's right. You need to look at the properties that are within that procurement. But you know, back to that OMR process, we need to make it. We need to make it work so that the procurements can can be quick and efficient and that we're not, you know, being overbuilt by, by .
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Speaker 6
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Speaker 6
We're trying to deliver that. connectivity as well. Yeah. In terms of I know our area, I think we're excluded from Project Gigabit, apart from the Isle of Eigg, the other five areas we cover would be effectively left outside of scope so our customers wouldn't have any options other than satellite had if we didn't exist. So that would be, say, two, two, 200. Two thirds of our area would be affected .
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10:34
Patricia Ferguson
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Patricia Ferguson
Gigabit and be left out. Yeah. Thank you. Thank you very much. Thank you. If I may just follow that particular theme up, perhaps with yourself, Mr. Thorburn. I've heard colleagues, not least my colleague Michael Crichton, who represents the Western Isles, mentioned the issue that's going to arise or is arising as copper wire stops being used and analogue systems systems are switched off. The dependence on digital that comes as a result, and that's not possible for everyone. And for some older people it's particularly challenging. So we know that weekend there were issues in some areas with the wind and the storms, and we understand that's a problem for everyone.
But what digital. resilience will providers like yourself build up in areas like that, where the wind's blowing at 70 miles an hour and the ambulance is an hour away? And so how are we .
But what digital. resilience will providers like yourself build up in areas like that, where the wind's blowing at 70 miles an hour and the ambulance is an hour away? And so how are we .
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10:35
Speaker 3
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Speaker 3
And maybe pass the gallery or the technical engineer? Yeah. So so one thing up front, the copper wire is going to be here for a relatively long time. So what is turning off is not the copper wire. What is turning off is some of the, the. electronics and the, the, in the telephone exchange that provides signals to copper wires and will still form part of it, but the voice signal will be delivered over a digital service rather than an analogue, just in case people were worried about their service working. And it's a change from from an analogue system to an IP one.
And the system that underpins it is many years old and coming to the end of life and the the services that are available and the the concerns that people would have in here is what about people with with vulnerable needs? What about healthcare? And Openreach is proud to support the. telecast service, where we go out and we work with both communication. providers and our engineers to make sure that we go in with the service and with work, and we leave with a service working , because that's the bit you wouldn't want to do it. And we've signed up to the code of conduct on that.
The reality is the digital service and the full fibre service as part of that is a much more.
And the system that underpins it is many years old and coming to the end of life and the the services that are available and the the concerns that people would have in here is what about people with with vulnerable needs? What about healthcare? And Openreach is proud to support the. telecast service, where we go out and we work with both communication. providers and our engineers to make sure that we go in with the service and with work, and we leave with a service working , because that's the bit you wouldn't want to do it. And we've signed up to the code of conduct on that.
The reality is the digital service and the full fibre service as part of that is a much more.
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Speaker 3
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Speaker 3
For those. customers than it is, than they're on today. It is a it is going to be a challenge to get customers moved over, and I would encourage anybody on that who has that concern to reach out to their communication provider in the first instance. They are the right person to speak to. Openreach provides loads of services to all the communication providers to make that.
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Speaker 3
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Speaker 3
And there's a big storm and there's an incident, the the digital system and the analogue system are have lots of parallels. And I think the conversation people would have is, what about power? I think that's the one that most people would. articulate for vulnerable customers. What you see at the at the retail end. No, the communication provider is they provide battery backup solutions that can, can, can support. customers in the event of power outages. And there will be other concerns, not just power, but it's a it's one for the communication provider, our communication provider. customers to speak to.
But the full fibre network that we're deploying is a much more.
But the full fibre network that we're deploying is a much more.
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Patricia Ferguson
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Patricia Ferguson
Not not not knowledge I have out of my head. As I understand it, the Ofcom requirement is that they have to give at least an hour worth of power. So obviously if you're aware of it, you can switch them off and switch them on and use that wisely. But I I'm not an expert either, but, you know, it's only a very, very limited and temporary solution. I do think that that, you know, this this is a general question of resilience.
And the power companies also .
And the power companies also .
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Speaker 3
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Speaker 3
Of the challenge. Yeah. It's interesting, I think in terms of more wider resilience, I mean, we we spend a lot of time and effort making sure that our networks are built to a standard that we they're, they're that Openreach has a long legacy and history know well over 100 hundred years now. we build our network to last the time. And this this is the the motorway analogy I used earlier on. We're building our network to last.
10:39
Kenneth Stevenson
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Kenneth Stevenson
And when we're building it, we're designing it with durability in mind. Thank you for that. The UK government has. indicated that a different approach, rather than full fibre, will be needed for hard to reach communities. What alternative. approaches should be considered and which are likely to be most effective? And I know you've sort of covered that. So I guess, you know, the answer might be satellite is coming forward, but I'd like to hear, you know, what .
10:40
Speaker 1
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Speaker 1
The alternatives are, if there's anything other than that, and we can maybe talk about we're also looking at innovation. So it is still linked to full fibre. But the innovation that we're delivering using Radio full fibre. So the reality is similar to what others have been doing with wireless. We're looking at deploying gigabit capable broadband, but without necessarily the need for a subsea cable. We've got one active solution going live next year in Fetlar in Shetland, and we're hoping that that solution becomes one of the options that we can deploy in Openreach, both through our contracts, but equally through the needs to upgrade communities in the future by giving them access to gigabit capable broadband.
So that's one of our innovations. Clearly, there's there's lots of things going on to try and stretch and reimagine how we deploy networks further. And I'm sure has got the t shirt in relation to exactly how much technology we can deploy. But things are changing all the time. But we're not stopping where we are. We're looking at what further we can do and to reach those harder to reach locations.
And in fact, there's a good example of a location that has no subsea cable.
So that's one of our innovations. Clearly, there's there's lots of things going on to try and stretch and reimagine how we deploy networks further. And I'm sure has got the t shirt in relation to exactly how much technology we can deploy. But things are changing all the time. But we're not stopping where we are. We're looking at what further we can do and to reach those harder to reach locations.
And in fact, there's a good example of a location that has no subsea cable.
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Speaker 1
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Speaker 1
So if it's radio, then I'm guessing it must be quite high, extremely high. And I'm not an engineer. So I'm going to beg to differ on it in terms of what the actual reality is. But my understanding is we've got a. spectrum and the backhaul capability will allow customers, the whole of the island to have gigabit capable, if they all wanted to download Call of Duty or whatever they want to do at any given time. I think the key thing, and we'd be happy to take it offline and give a further response in a little bit more .
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Speaker 1
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Speaker 1
In previous broadband rollouts? I can cover it from our side, and Garrett can add further from a technical point. So first and foremost, I think it's yeah, absolutely. We're looking from the whole solution. So outside in analogy means you've got to get to the outside. You have to build from the inside to the .
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Speaker 1
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Speaker 1
We disagree with the premise. The solution is right. And one example I can give is we've, we've done exactly that in the Western Isles where we've deployed to a location called Uig. So it's Tim's gray. And if Torkel was here, he would clarify that that's a remote. community that we've passed through a number of villages to take the network directly to that. community in grey, and then expanded it further. That was on the premise that they didn't have great connectivity. They had poor access to mobile signal, and it was seen as a necessity to deliver.
So that is an example of where we have done exactly that. But from an efficiency. perspective and from a community understanding point of view, if you're bringing engineers through villages, it's probably more likely they would expect you to build them and then move on in the sequence. So we do both. We'll look at the outside where we can directly deliver, but where there's a dependent link, i.e. the spine or the network has to build through communities to reach it.
Then we look and judge whether or not we should build as we .
So that is an example of where we have done exactly that. But from an efficiency. perspective and from a community understanding point of view, if you're bringing engineers through villages, it's probably more likely they would expect you to build them and then move on in the sequence. So we do both. We'll look at the outside where we can directly deliver, but where there's a dependent link, i.e. the spine or the network has to build through communities to reach it.
Then we look and judge whether or not we should build as we .
10:44
10:44
Kirsteen Sullivan
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Kirsteen Sullivan
Forward, or whether you start a new work backwards. So that seems quite contrary to what this committee heard. When we visited the Western Isles, we spoke to. many local. residents who said that years ago, BT had offered. reassurances that they were going to start with a more difficult to reach areas. But again, that does not seem to have.
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Patricia Ferguson
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Patricia Ferguson
Miss Kelly? You're nodding your head there. It's it's a it has been a theme throughout the you know, for as long as we've been talking about the fibre rollout, really. I remember the original procurement of, you know, this and the outside in theory. And I, I, I can totally I can see where Openreach are coming from. There is a certain amount of engineering efficiency and building from the, you know, where you've already got network out to it. But I do think that there needs to be a focus on what you're trying to achieve. I mean, for a company like ours, we're a we're a small company.
We don't have, you know, huge access to funds. So we have to we have to target what we're building. And we have to, we have to generate enough revenue so that our.
We don't have, you know, huge access to funds. So we have to we have to target what we're building. And we have to, we have to generate enough revenue so that our.
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10:45
Patricia Ferguson
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Patricia Ferguson
You know, see that, see that return on, on the money that they're putting into this. And it's the same for the public money that we're spending. You know, the public needs to see that the connectivity is there. So I do I do think that there are things in the design of these procurements that could help that outside in approach a little bit more. And some of what we talked about in terms of the the.
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Patricia Ferguson
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Patricia Ferguson
Those harder to reach. properties do get. descoped because the funding just doesn't stack up either for our private investors or for the government investor either. And so there's definitely some flaws in the way that these schemes have been. designed from the from the outset, really, that is driving that kind of what I like to call kind of, you know, the, the hole in the middle of the doughnut, it doesn't get it doesn't get it doesn't get to those, those properties that .
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10:47
Patricia Ferguson
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Patricia Ferguson
Clearer scope that doesn't move. I, I absolutely think that the procurement process could be better done in that, I mean, we're talking UK wide here. Not this is not a a Scotland problem. This is across the country. I do think you should be talking to Ofcom about the way that they are also helping us to, to keep a level playing field and a fair, fair crack at the whip for all of us. I mean, you've heard Ian's view on that as well. And we would have similar views. We you know we do . Absolutely. Competition is is a great thing, but.
competition for those harder to reach areas is maybe not such a great thing. So, you know,
competition for those harder to reach areas is maybe not such a great thing. So, you know,
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10:48
Speaker 1
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Speaker 1
Have fallen short of the. expectations that were set. Firstly, I'm not aware of those examples of communities that have said that we haven't worked from the outside in. I think, as I say, to reaffirm the. Our 100 programme and Project Gigabit have kicked off in earnest. I was at the council meeting earlier in February this year talking through the the rollout planning for the whole of the Western Isles in front of the whole Council. Myself and a member of the Scottish Government were there presenting. I think we were able to first hand hear the challenges and difficulties across the whole of the Western Isles.
So it's not just one location. You've got multiple island groups , and I was obviously able to take the Scottish Government team out to the most remote community. I talked about being Thames Gray and Uig, who is at the end of the line, and we also looked at three communities. It was called Brenish and gone straight out of my head for a second. But the three remote communities there that weren't part of the current plan are now being included in that plan. So that's taking the outside in even further and from our end, extending coverage and reach to the most remote communities that we've got.
And I think that is why the the approach that we've got on the Western Isles is key. It's this joint effort, this joint support. So again, we'd be happy to review any specific examples, but I'm working right now in a number of areas in the Western Isles today. And we've already built more than a third of .
So it's not just one location. You've got multiple island groups , and I was obviously able to take the Scottish Government team out to the most remote community. I talked about being Thames Gray and Uig, who is at the end of the line, and we also looked at three communities. It was called Brenish and gone straight out of my head for a second. But the three remote communities there that weren't part of the current plan are now being included in that plan. So that's taking the outside in even further and from our end, extending coverage and reach to the most remote communities that we've got.
And I think that is why the the approach that we've got on the Western Isles is key. It's this joint effort, this joint support. So again, we'd be happy to review any specific examples, but I'm working right now in a number of areas in the Western Isles today. And we've already built more than a third of .
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Speaker 6
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Speaker 6
We've built the outside on the islands and we're going back and Mallaig is our nearest point of presence with the infrastructure is suitable for us. So that's our if you like, the inside for us is there and what we're building out towards that. So so it can work. And for us, it did work because we've done our fibre and it's gigabit capable, our network. But there's a couple of other points I just want to touch on quickly . As part of that outside in approach, the we use Radio Radio network and Robert mentioned BT Openreach looking at innovation for using radio links for their network.
Our radios are gigabit capable. It's not something new. And in terms of.
Our radios are gigabit capable. It's not something new. And in terms of.
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Speaker 6
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Speaker 6
It can be 100%. It just depends how you wish to arrange those radios. And it might be if you put them all in one place and the power goes off, you'll lose that if you put them in two locations, separate power, you know, you can reduce the risk of total loss of service. So typically it's 100% availability on these radios. So it's not a lesser service to fibre. And that's what we use currently.
We'd like to use fibre. But again we wouldn't use subsea fibre as an.
We'd like to use fibre. But again we wouldn't use subsea fibre as an.
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Speaker 6
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Speaker 6
Because that's not immune to problems. I think the one in Tiree was eight weeks. That was off with no radio back up. So that highlights where you still need to have radio or microwave. connections and subsea fibre connections to help. balance the risk, if you like, to the customers. So it's there's a lot of things to consider and, you know, rural areas and this should maybe be part of builds or contracts now that certain elements of resilience are built in as standard was maybe with Tiree, maybe that's not built in. I think the mobile phone operators don't necessarily build in as much resilience as they could with their networks either.
So again, that could be something that could be addressed. I think you mentioned about the copper telephone lines being switched off or risks with that. I think you obviously have mobile phones now, which you didn't have in, say, the 1980s with copper telephone lines. So there's a mixture of technologies. We just need to at least one of them be available in some. description in that area. So at least if there's certain.
So again, that could be something that could be addressed. I think you mentioned about the copper telephone lines being switched off or risks with that. I think you obviously have mobile phones now, which you didn't have in, say, the 1980s with copper telephone lines. So there's a mixture of technologies. We just need to at least one of them be available in some. description in that area. So at least if there's certain.
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10:53
Speaker 6
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Speaker 6
Experience of engaging with Openreach to secure a connection? So we typically see with Openreach, I think they said they have. 600 suppliers effectively like so. So BT or Vodafone would would we would order through one of those companies to access Openreach. So we don't deal with Openreach directly. The only direct dealing we've had is around a subsea fibre on egg and our. I guess our experience has been. It was okay, but we didn't get what we wanted from it yet. We know speaking to local. engineers and other people involved, we know that the product is potentially available.
The cables there and available for service. There's no mechanism to get through the front door of Openreach to enable that for us. So my experience has probably not been what I wished, and I would I would say others have .
The cables there and available for service. There's no mechanism to get through the front door of Openreach to enable that for us. So my experience has probably not been what I wished, and I would I would say others have .
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Patricia Ferguson
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Patricia Ferguson
How has your experience compared? So we use the. Openreach Poland. network to to build our network, to deliver that fibre, as a lot of providers do across the country. So our interaction with Openreach is absolutely daily. It's it's a very, very well set up product that they're operating. You know, that's and it's regulated by Ofcom. I think we've had we've had some issues with it in that they you know, if they they want to change their pricing or their approach or their commercial terms, you know, there's a process. And, you know, we had recently the Telecoms access Review that Ofcom published back in March, there was a lot of input into that to persuade Ofcom to, to, to stop Openreach from increasing the prices on what we call the, the dark fibre product, because that would have.
massively affected the. costs that we would face then bringing some of that connectivity to the remoter places. And of course, you know, we did get together as as the alternative networks and and lobbied Ofcom. But, you know, we, we haven't all individually got that kind of resource that we can constantly be checking that we're, you know, we're on top of everything. So, so, you know, there are it is a bit of a David and Goliath in the industry. And as I said earlier, you know, the Pia, the physical infrastructure access, that's the product that we access in order to use the ducts and the poles, which is the most efficient and cheapest way for us to get that connectivity out to rural areas.
It's not for free, and it's more. expensive across the longer lengths of, of delivery that we have to, to, to get them, which is, you know, it's delivering in Scotland. So .
massively affected the. costs that we would face then bringing some of that connectivity to the remoter places. And of course, you know, we did get together as as the alternative networks and and lobbied Ofcom. But, you know, we, we haven't all individually got that kind of resource that we can constantly be checking that we're, you know, we're on top of everything. So, so, you know, there are it is a bit of a David and Goliath in the industry. And as I said earlier, you know, the Pia, the physical infrastructure access, that's the product that we access in order to use the ducts and the poles, which is the most efficient and cheapest way for us to get that connectivity out to rural areas.
It's not for free, and it's more. expensive across the longer lengths of, of delivery that we have to, to, to get them, which is, you know, it's delivering in Scotland. So .
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Speaker 6
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Speaker 6
Had on your businesses and customers? You go first. Yeah. So so for us, we've we we had one. project which as a result of not accessing the, the subsea fibre on egg, it cost us more money. Capital expenditure was increased. So we had to spend more money on that. And at the moment it's, it's kind of capping what we can offer our customers as well. So from a business point of view, we can't really plan ahead. until at the moment. March 2028 is when the BT website, BT Openreach website says the egg work will be complete, and that's the only date we can go off.
So we can't really offer any additional services to our customers until that date, unless we go down the the radio microwave route, which which is fine, but it's very expensive. And that's for us as a as a business, we're only small, so we can't afford to spend ten, 20. £30,000 a year for, say, a 5 or 10 gigabit radio link when we're only potentially going to utilise 10% of that. So we need to manage our costs versus our bandwidth.
Whereas for for a lot of bigger.
So we can't really offer any additional services to our customers until that date, unless we go down the the radio microwave route, which which is fine, but it's very expensive. And that's for us as a as a business, we're only small, so we can't afford to spend ten, 20. £30,000 a year for, say, a 5 or 10 gigabit radio link when we're only potentially going to utilise 10% of that. So we need to manage our costs versus our bandwidth.
Whereas for for a lot of bigger.
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Speaker 6
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Speaker 6
They can afford, and obviously they're working in more built up urban areas. They can afford to have surplus connectivity or surplus bandwidth, sat there doing nothing and paying for it. But for us as a small operator in a rural area, we need to be mindful of we don't want to pay for lots of lots of bandwidth, but only use a small percentage of it. So whereas. accessing like dark fibre, for.
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Speaker 6
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Speaker 6
That that gives us the opportunity to have more bandwidth. And again, with the dark fibre specific to Hepnet in this case, I think where we are, we could use dark fibre to the island if Openreach were to allow us, but we'd have to get written consent from them because we would be using it to deliver fibre to the premises on egg itself. Whereas if you use a wireless link in your network, say to rum or muck, we would be allowed to use dark fibre without consent from BT Openreach, but we would need their consent in our case because there's a mixture of fibre to the premises on egg and radio links was ultimately we're in a rural area with no.
competition and no option for people, so we feel this is this is an Ofcom thing. So it's not Openreach, this one. We feel that Ofcom, again, the one size fits all approach, doesn't really work when you get into rural areas. So .
competition and no option for people, so we feel this is this is an Ofcom thing. So it's not Openreach, this one. We feel that Ofcom, again, the one size fits all approach, doesn't really work when you get into rural areas. So .
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Patricia Ferguson
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Patricia Ferguson
Of gives you our okay. We're not I mean absolutely defer to Ian who's really, you know, in in the weeds of the engineering on this. But it is about cost ultimately. I mean, we're very, you know, making as best use of the product as we can. But it doesn't matter how many customers we've got on the end of it, we're paying the same amount for that, for that access ultimately. And so it's not necessarily the most cost effective way of, of, of, of delivering the network, but it's even more expensive to dig your own and create a new network from scratch.
So we're kind of, we're stuck with it really as it is. And so we do rely on, on Ofcom to, to regulate it as best they can. And as, as Ian says, it's, it's not a one size fits all. We've got to have a sensible approach to some of the more.
So we're kind of, we're stuck with it really as it is. And so we do rely on, on Ofcom to, to regulate it as best they can. And as, as Ian says, it's, it's not a one size fits all. We've got to have a sensible approach to some of the more.
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10:59
Douglas Lumsden
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Douglas Lumsden
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Speaker 3
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Speaker 3
Their their own broadband services. And I go first. And so I think I mentioned earlier on with 600 providers on our network, any telecommunications company can register as a as an organisation to be number 601. There's a process to go through. And that involves then a direct relationship with Openreach. That would have been what Fiona and Go Fibre have been through. So there is actually the option of doing it. But we we operate under a we, we under a, we under under a series of regulations. And some of the fundamental tenets of that are around equal.
treatment and treating everybody, treating every provider the same. That's how we operate. So whenever we are answering a question on one. specific one of the, one of the key thoughts in our mind is how are we being consistent to being equal across the whole of the UK? Because that's the. regulation and the onus that is on us. So anybody who'd be interested, I mean, certainly we'd be able to help with the establishment process for us dealing with. But once somebody deals with a communication. provider and we heard a few, few described, the answer that we give to to one company is the same to everybody.
So that's, that's the fundamental tenant of Openreach. And part of the reason why, why we.
treatment and treating everybody, treating every provider the same. That's how we operate. So whenever we are answering a question on one. specific one of the, one of the key thoughts in our mind is how are we being consistent to being equal across the whole of the UK? Because that's the. regulation and the onus that is on us. So anybody who'd be interested, I mean, certainly we'd be able to help with the establishment process for us dealing with. But once somebody deals with a communication. provider and we heard a few, few described, the answer that we give to to one company is the same to everybody.
So that's, that's the fundamental tenant of Openreach. And part of the reason why, why we.
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Speaker 3
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Speaker 3
, access review. I'm not used to saying that out loud. It's tar in my in my language, but in the tar, obviously there's lots of puts and there's obviously lots of conversations back and forth with Ofcom. I think it's ultimately an Ofcom framework that we operate inside. And it's landed on a series of of. pricing and conditions associated with our .
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Speaker 3
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Speaker 3
We should have in here to answer some of those, some of these questions. I wouldn't use the language tied. Openreach operates within a framework and we deliver services effectively to all corners of the UK. We provide services to over 600 providers and we do that on a fair and equal basis, and that the. telecommunications full fibre roll out of the UK is one of those very few. success stories where it's ahead of schedule, it's under cost, right? So the the framework that's enabled by that, that. regulation is a success story now for UK infrastructure deployments.
But we do we are a regulated industry. We do have a regulator. And, and certain aspects of our of our business are dictated by what .
But we do we are a regulated industry. We do have a regulator. And, and certain aspects of our of our business are dictated by what .
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Douglas Lumsden
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Douglas Lumsden
You show a bit of flexibility in that? No, that's equal treatment and by definition okay is that, you know, obviously at the end of the day, it's, it's, it's businesses and, and home consumers who are suffering because they haven't got a decent internet connection. And it seems that you're just treating these people who are doing a service that you guys are, it's probably not cost efficient for you to do. It's, it's, you know, you're not, you're treating them just like the same as everyone else. But, you know, when I might be, you know, I'm lucky I live in a city.
I could probably, you know, I've got an option, probably .
I could probably, you know, I've got an option, probably .
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Speaker 3
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Speaker 3
You know, I think local communities do not have that option. I think in the context of this, I would suggest there's a tiered. So there's the retail level. No, like the, the, the. providers that that we've had described. And then there's the, the organisations that deal with us directly. The they are, they are treated differently through those. So I would suggest if there's a more direct conversation required, a bit like go fibre, they work directly with us.
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Speaker 6
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Speaker 6
You know, you're providing a service to Openreach can't provide. Exactly. I think in our case, we go for a like a reseller of Openreach products, like one of the. 600 because they do work elsewhere. So we work with them. So we don't deal with Openreach directly. But in our case, I feel that there's nothing stopping Openreach from allowing our. supplier to access or provide products where we are on egg. I feel like it's a. contract or the computer says no and they won't let us do it because it's not been updated on the computer side, because we're not asking for special discounts or anything like that.
We're just asking for a connection and everything's there to do it. It's just there's something in the .
We're just asking for a connection and everything's there to do it. It's just there's something in the .
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Douglas Lumsden
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Douglas Lumsden
Households could have. But equally, they may also be able to choose the net solution as well. It just seems like there's been a huge amount of government subsidy into this, you know, hundreds of millions. And it just seems surely there should be a bit more flexibility in working together to actually provide what .
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Speaker 3
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Speaker 3
Explanation for that, how that might happen? Yeah, I think this is something that you'd hear a lot. And people, I think, make a link to the power industry that when you see a line outside, you can tap into it and you can bring into your home. The reality is that's not how the technology of fibre works. That's it. Fibre being in proximity to your home is an enabler to you being able to get connected. So there will be instances in the in the UK and in Scotland and in your. constituency where there's fibre in proximity to people's homes and they do not do it.
It's also if we if we talk about the the outside in approach, it's no, the fibre is going past to go somewhere for for service and that area will not IP build. But there is a bit of the. No. Is every home on the route of that fibre connected yet? It's unlikely to be. I think that would be the same for for all providers. Sometimes that fibre acts a bit like a motorway and apologies for using that, that sort of language, but it's going to a point. And then what hasn't happened is it hasn't dropped off everywhere along the way, but it would be an indicator that fibre at those constituents or those homes is more readily .
It's also if we if we talk about the the outside in approach, it's no, the fibre is going past to go somewhere for for service and that area will not IP build. But there is a bit of the. No. Is every home on the route of that fibre connected yet? It's unlikely to be. I think that would be the same for for all providers. Sometimes that fibre acts a bit like a motorway and apologies for using that, that sort of language, but it's going to a point. And then what hasn't happened is it hasn't dropped off everywhere along the way, but it would be an indicator that fibre at those constituents or those homes is more readily .
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Patricia Ferguson
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Patricia Ferguson
Yeah. Okay. Thank you. Okay. Thank you very much. That concludes our questions to you today. So thank you once again for coming along and giving us your time. We really appreciate it as part of our wider inquiry. And just to reflect on, I think it was Mr. Lumsden's question about whether we should be speaking to Ofcom on some of these issues.
We will be at a later .
We will be at a later .
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