Ministerial statement: Enhancing Scotland’s Digital Connectivity

Minister for Connectivity Paul Wheelhouse

9 January 2020

Presiding Officer, this Government is committed to transforming Scotland’s digital connectivity and delivering world-class digital infrastructure.

We have made significant progress already in this regard, despite telecommunications being an entirely reserved matter and all legal and regulatory powers sitting with UK Ministers.

Through the £400 million Digital Scotland Superfast Broadband (DSSB) programme, we met our target of providing access to fibre broadband to 95 percent of premises across Scotland on time and on budget.

In fact, we exceeded that target.

Now, over 943,000 premises can access fibre broadband, which is around 103,000 more premises than was originally anticipated.

We are also going where others would not invest.

Before the DSSB programme, there were no plans for commercial fibre broadband roll out in Orkney, Shetland or the Western Isles. Now, over 80 percent of premises in these areas have access.

We have also seen huge increases in coverage in much of rural Scotland from the Borders to Argyll and Bute to the Highlands.

And as the DSSB team has announced, take up of broadband services on DSSB funded infrastructure now sits at over 60%, when it was expected that take up would only be around 20% - and that higher take-up further enhances investor confidence, too.

Through a contractual mechanism known as Gainshare, this better than expected take-up has resulted in additional funds being available, ensuring build continues and that there is no gap between DSSB completing and our Reaching 100% programme – or R100 - beginning.

Indeed, we now have a strong foundation upon which to “reach 100%”. Since 2014, superfast broadband access has increased by 35 percentage points in Scotland (from 59% to 94%), compared with a 21% increase from the UK.

Presiding Officer, I am aware that belatedly the UK Government has woken up to its responsibilities in this area.

As part of his leadership campaign last summer, Boris Johnson pledged to “deliver full fibre to every home in the land by 2025”.

By the December UK election, that promise had been watered down to “roll out gigabit broadband across the country by 2025”.

The UK Government has also been slow to invest in digital connectivity beyond its contribution to DSSB.

Currently it is contributing just £21 million of the £600 million this government has committed to R100. The UK Government is providing a miserly 3.5% with the balance of £579 million being fully funded by the Scottish Government.

However, I expect Scotland to receive our fair share of the £5 billion announced by the UK Government for extending gigabit-capable connectivity – and I would welcome Parliament’s support to achieve this.

This is why over recent years, in light of large areas of rural Scotland continuing to experience very poor or non-existent broadband coverage and poor speeds, we could not wait for UK Ministers to fulfil their responsibility to deliver broadband infrastructure for all.

We have therefore forged our own ambitious digital agenda, committing to deliver access to superfast broadband to every home and business in the country through the R100 programme.

Presiding Officer, I have kept Parliament informed of developments in the procurement process for R100 throughout the past year.

Most recently, I advised Parliament that contracts covering South and Central Scotland areas have been signed and as promised, I can provide more detail today on what those contracts cover.

They will deliver £133 million of investment in the South lot area and £83 million worth in the Central lot area.

In the South lot, alongside commercial coverage, we will reach over 99% of the 26,000 eligible premises for R100, leaving in the region of just two hundred premises in this area requiring to be connected by alternative means.

In the Central lot, of the eligible 55,000 premises, the contract we have signed with BT – alongside greater than anticipated commercial build – will reach at least 47,000 or almost 87% of them. The remainder will require to be connected by alternative means that I will outline shortly.

Let me remind the chamber that our commitment was to extend superfast access to all, providing access to speeds of 30 Megabits per second or more.  

Presiding Officer, I am able to announce today that we will go significantly beyond this.

I am delighted to advise that as a result of our actions, all of the planned R100 build in the South of Scotland, and the vast majority of R100 build in Central Scotland, will use full fibre – or Fibre to the Premises – technology.   This will provide access to gigabit capable speeds - in other words, not 30 megabits per second but 1000 Megabits per second.

This roll-out of full-fibre to most parts of Southern and Central Scotland is going significantly beyond our original commitment and will deliver a truly future-proofed solution for Scotland, ahead of the rest of the UK, even though the topography of these areas means this will be one of the most challenging broadband infrastructure builds anywhere in Europe.

Of course that complexity - and the fact that the technology delivered will go beyond our original commitment - means the civil works will take time.

Engineers will reach around half of the target premises in both lots – approximately 23,000 in Central and 12,000 in the South - by the end of 2021, with the majority of the build completed by the end of 2023.

Presiding Officer, I acknowledge that this, on its own, would be insufficient to enable superfast access for all homes and businesses by the end of 2021 as promised.

That is why, in the meantime, we will provide additional support to ensure that everyone can access superfast broadband services in that timescale.

As I have previously made clear to Parliament, there was always going to be a need for an ‘aligned intervention’ to connect those premises that for technical reasons are beyond the reach of R100 contracts.  

I can advise today that the aligned intervention will be delivered through a voucher scheme funded by the Scottish Government.

And I can further advise that anyone who will not be able to access superfast broadband through the R100 programme by the end of 2021 – even if R100 will ultimately reach them – will also be eligible for that voucher scheme.

The voucher scheme will launch later this year and will provide grants to broadband customers in non-domestic and domestic premises, offering support to access a range of technologies and suppliers.

Of course, Presiding Officer, I had hoped to be announcing details of all three contracts today.

Unfortunately, as I advised before recess, the contract award for the North lot, for which we have committed £384 million, is now subject to a legal challenge from Gigaclear Limited. Until that challenge is heard and resolved, we are unable to award the contract as planned.

I am unable to comment on the litigation process itself, but I want to reassure members that we will do our utmost to ensure that people in the North of Scotland access superfast broadband through the R100 programme as soon as possible. However, in the meantime, customers in the North Lot area will also be able to access the voucher scheme when it launches later this year.

Commercial investment also has an important part to play in enhancing Scotland’s digital connectivity. Indeed, as members may be aware, Scottish Ministers cannot, as a matter of law, invest in areas where commercial investment is already proposed.

Commercial suppliers are already going further than originally anticipated, which has reduced the number of premises requiring public investment.

BT is currently updating its own modelling to reflect these changes. Once this is completed and detailed survey work has been undertaken, I will be able to share specific details of the roll-out plans down to premises level.

The fibre we deliver through the R100 programme will also help improve Scotland’s mobile connectivity – providing the backhaul needed to support the growth of 4G and 5G services, benefitting the development of Scotland’s 5G Centre and Strategy.

It will enable the movement of data across Scotland, supporting the growth of data driven industries and technologies like digital health delivery and the Internet of Things – or IoT – where Scotland is already a leader.

And it will support our ambition to establish Scotland as a green data hosting location.  

The R100 fibre will link to new international fibre connections that will connect Scotland to the rest of the world, enable data to be moved efficiently across national boundaries and open up a range of new economic opportunities for existing and emerging businesses.

Crucially, enhanced digital connectivity will support Scotland to make a just transition to the new ways of working needed to address climate change.

It will give people and businesses the tools and skills they need to harness the potential provided by digital technology.

There is no doubt that rural Scotland has perennially had to play catch-up to the rest of the UK, when it has come to digital connectivity and prior waves of telecommunications investment.

The work to date - led by this government’s approach and undertaken through DSSB - has laid foundations on which R100 will build. This will ensure that – for the first time – Scotland is ahead of the curve, not just in the UK but internationally.

The R100 programme is a prime example of how the Scottish Government is using devolved economic development powers to mitigate and resolve a market failure that has arisen in what is, for now, a reserved policy area - telecommunications.

This government will extend full-fibre broadband across the length and breadth of rural Scotland.

We will deliver a huge number of full-fibre connections, in what are amongst the most challenging locations anywhere in the UK and Europe.

And for most of those benefiting, we will greatly exceed our 30 megabits per second superfast commitment.

R100 will help deliver social, economic and environmental benefits for all of Scotland - enabling innovation and the creation of highly skilled jobs; opening up remote working, social and leisure opportunities; delivering digital health and other new public services; and reducing travel, including the need to commute.

Presiding Officer, Scotland’s enhanced digital connectivity will support our transition to a net zero economy and boost population retention and attraction.

And I am excited about what this connectivity will mean for everyone in those communities we reach through delivery of this hugely ambitious investment and commitment.

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