7. 6. Statement: Superfast Broadband in Wales

Part of the debate – in the Senedd at 4:58 pm on 11 October 2016.

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Photo of Julie James Julie James Labour 4:58, 11 October 2016

Thank you for that series of questions and comments, Russell George. A day is not complete in my ministerial office without a letter from you on Superfast Cymru; so, I very much appreciate your interest on behalf of your constituents in this matter. I’ll try and get through all of them. The contractual obligations point: we’re not relying on clawback as a result of failure of BT to get the money we’re talking about. We have a gain share written into the contract. So, if take-up in any area where Superfast Cymru has arrived is more than 21 per cent, we get a profit share back of that. So, that’s the money we’re relying on. I do expect BT to meet its contractual obligations because the contract carries heavy financial penalties for them if they do not. So, it would very much not be in their interest to get into that position. The money that I talked about is not from clawback, as you put it; it is from a gain share that’s written into the contract. So, we’re already talking to BT about the use of that gain share and how we can get to the premises that are not included in it as a result.

In my statement I did talk about another open-market review, which we will do in the autumn, because, again, it is a market intervention, so I have to make sure that I’m not going anywhere where there is going to be commercial roll-out. So, the best way to do that is to ask the commercial operators for their final analysis of where they are going to go, so that we can go to the places that other commercial operators cannot reach. Sorry, I couldn’t resist that. I am confident that we will get there.

In terms of identifying those premises early, he will know that I have been pushing BT for a very considerable period of time to tell us the premises that they know definitely that they won’t get to. We have now got around 1 per cent of those, and the website is slowly changing over this week and next week to reflect that. Some of your constituents, when logging on to the website, will now get the message ‘out of scope’. They will also then get something to say what we are going to do for them. In some ways, they are the lucky ones because it means that we can get to them fast, whereas the people who are still ‘in scope’ but with no build date will have to wait until June 2017 for us to see whether BT gets there. The reason for that is this: we run this project as an all-Wales project. BT can go to any premises in Wales that they want to and get it to 30 Mbps or more, and we will pay them for that. So, we do not control where they go. They go where they can get to. It’s obviously in their interests to get to as many premises as possible as fast as possible because that’s what gives them their income. So, as the technology changes—and, indeed, it has changed over the sequence of this contract—. For example, re-capacitising—if that is a word—the cabinets that are already at capacity is one route to them getting more premises engaged up to 30 Mbps. As I say, it’s important for Members to realise how strict we are about that. They do not claim it and we pay them. We check the speeds on a premises-passed basis, and that’s how they get paid. So, it’s very strict, and we monitor it very, very carefully.

In terms of the planning and mobile issues, mobile, as you know, is not devolved to Wales. [Interruption.] Yes. The Cabinet member for planning and I have already met and discussed the issues here. We have some officials doing a piece of work for us on what can be achieved in terms of permitted development, what can be achieved in consultation with things like the national park authorities, for example, and so on. There are restrictions that people will want to see. But as always with these things, it’s a trade-off: do you want very high mobile connectivity in your national park, or do you want no masts? I’m afraid that you can’t have both of those things, so it will be for local people to make those choices. It’s a matter for them which of those choices they want to make, and we can facilitate that choice for them.

In terms of getting everywhere with what speed, the Member will know that the UK Government currently has a digital Bill going through Parliament and that that has a universal service obligation in it. That universal service obligation is currently at 10 Mbps, which is very considerably lower than where we want to be. We are pressing them to up that and to put an accelerator into it. It’s also not clear quite how universal the universal service obligation will be. Members will be familiar with how that works, for example, with telephones. There’s an amount of money that the telephone operator will pay to connect you to a landline, and after that you are expected to pay the rest yourself. Clearly, we are not happy with that because it disadvantages people in rural communities that are a long way from anything. So, we are putting a lot of work into understanding from them what exactly it is they mean, what those cut-off marks might look like, and what we can do as a Welsh Government to fill in the gaps for people. People left out of that universal service obligation will obviously be at a disadvantage unless we can fill those gaps in, and that’s very much what the gain share money is for.

Lastly, in terms of their response, we’ve only just taken that in-house, and I’m afraid the team is taking a little while to get sorted. But I assure you that the response speeds will be back up to normal—I hope this week, but very soon. On marketing, we took it in-house because we wanted to target it specifically at areas with high take-up and at businesses that are vital to our economy. We wanted the local and regional Assembly Members to be involved in that marketing campaign. Because as I said, the higher the take-up, the more the gain share and the more money we have to reinvest in the programme.