Consultation outcome

East Sussex Public Review closure notice

Updated 12 December 2022

New procurement to extend coverage of gigabit-capable broadband across the East Sussex region.

1. Introduction

The government’s ambition is to deliver nationwide gigabit-capable broadband as soon as possible. We recognise that there is a need for government intervention in the parts of the country that are not commercially viable; this is why the government has committed £5 billion for the hardest to reach parts of the country, ensuring that all areas of the UK can benefit. This will be spent through a package of coordinated and mutually supportive interventions, collectively known as Project Gigabit.

We wish to work collaboratively with industry to maximise efficiency, minimise market distortion and achieve our objectives within a tight time frame. To do this, we first identified the areas that were not commercially viable through the Open Market Review (OMR) and Public Review (PR) stages. This allowed us to understand from suppliers if there were any current or planned investment over the next three years in broadband infrastructure (Next Generation Access broadband, ultrafast and gigabit-capable) in the identified geography. For this Lot, the identified geography lay within the East Sussex region.

The box below shows the order of processes, from OMR to procurement.

1. OMR

2. Pubic Review

3. Determine intervention areas for procurement

4. Procurement

Through these stages, BDUK classifies premises as eligible/ineligible for subsidy on the basis of their existing or planned qualifying broadband infrastructure. Details on the classification system of White, Grey, Black and Under Review and methodology can be found in section 3.2 BDUK Classifications and methodology for this PR.

Premises categorised as White by BDUK during OMRs and PRs (ie eligible for subsidy) are grouped into Intervention Areas (IAs). IAs list those premises that will be targeted for subsidy in any potential procurement to follow this PR. To be clear, not all eligible premises may have been targeted for subsidy. The finalised IA will be issued to the market at the Invitation to Tender (ITT) stage of procurement so that suppliers can bid for subsidy to support delivery to this IA.

Further information on the OMR/PR process and how we reach our conclusions can be found in the Subsidy Control Guidance document.

2. Outcome of the preceding Open Market Review

Preceding the current PR stage, BDUK conducted an OMR for East Sussex (Lot 16) from 20 October to 22 November 2021. This OMR requested information from suppliers regarding current and planned broadband infrastructure within the next three years.

All meaningful responses to the OMR were considered and where necessary used to determine eligible premises. Suppliers who responded to the OMR were informed of the classifications applied to the existing and planned infrastructure relevant to their submission.

The key findings of the OMR are presented in the postcode-level map showing eligible premises identified through the OMR for East Sussex, and a list of eligible postcodes can be found on our website.

3. Outcome of the Public Review

3.1 Background

The PR for East Sussex (Lot 16) ran from 29 March to 29 April 2022. During the PR, BDUK invited stakeholders (including broadband infrastructure operators, internet service providers, the public, and businesses) to provide feedback regarding which areas were made up of eligible premises.

Furthermore, BDUK carried out market engagement to seek feedback from suppliers about the design of the IA and Lot design, the procurement type (A - local supplier, B - regional supplier or C - cross-regional supplier) and also the capacity of the market to bid for a potential procurement.

The PR stage aimed to validate the outcome of the preceding OMR to ensure that it correctly represented the information provided by suppliers over the course of the OMR.

Suppliers who missed contributing to the preceding OMR, had no definitive plans and/or evidence base on which to substantiate claims at that earlier stage, or had subsequently updated their plans had a final opportunity to notify BDUK before final determinations were made on premises eligibility. All meaningful responses were carefully considered and where necessary used to determine eligible premises. BDUK also sought feedback from East Sussex County Council. The finalised postcode-level map showing eligible premises is shown in Annex A of this PR Closure Notice. See postcode-level map.

A finalised list of postcodes showing White, Grey, Black and Under Review PR outcome has been published. A list of eligible (White/Under Review) premises is also available to suppliers upon request.

The proposed IA shown in Annex B has been submitted to BDUK’s National Competence Centre (NCC) and obtained approval to proceed. The finalised IA will be available to bidders at the forthcoming ITT stage.

Changes to the Lot area

Please note, Lot areas are not fully aligned to Local Authority (LA) boundaries. Specific Lot boundaries (and IAs) may flex during the OMR, PR and Pre-Procurement Market Engagement (PPME) processes to enable an optimum procurement to be put to the market.

Following the PRs for Lot 1 (West Sussex), Lot 16 (East Sussex) and Lot 29 (Kent) BDUK went out to the market for Soft Market Testing (SMT) to share a view of Lot 1 (West Sussex), Lot 16 (East Sussex) and Lot 29 (Kent) IAs in July 2022.

The supplier feedback received during SMT was then used to update the IA with a view to move forward to PPME. A proposal to combine Lot 1 (West Sussex), Lot 16 (East Sussex) and Lot 29 (Kent) into a bigger contiguous Type B procurement that spanned across all three regions was put to the market.

It was decided that BDUK would initially only consult on Type B contracts for these areas as a result of strong indication of interest received in exploring Type B procurements across the three regions. A combined Type B procurement covering the three Lot areas was shared during PPME with the market.

However, following the conclusion of this PPME exercise, BDUK has taken the decision based on findings, to proceed with a single combined Type B procurement for Lot 1 (West Sussex) and Lot 16 (East Sussex) and a second single Type B procurement for Lot 29 (Kent).

This is instead of the larger Type B contiguous area procurement, which would have combined Lot 1 (West Sussex), Lot 16 (East Sussex) and Lot 29 (Kent).

Since the PR closed on 29 April 2022 there have been changes made to the proposed Lot Boundary Area. These changes can be seen in the East Sussex PR outcomes provided below, and shown in Annex A. This is consistent with the revised Lot Boundary Area shown in this document in Annex B which includes the combined West and East Sussex Lot boundary.

To be clear, the changes made during the PR to the Lot Boundary Area are as follows:

• Kent was removed from the contiguous Lot to stand alone as a Type B
• West and East Sussex to proceed as one single combined Type B Lot

The decision was made to take forward the single combined Lot covering West and East Sussex. This approach is in line with our wider strategy of focussing on fewer and smaller procurements where no market interest is indicated. This further builds upon our PPME findings where the market indicated a combined procurement would be more attractive for these geographic regions.

Please note, BDUK are expecting at least a 0.08% change to the proposed IA due to updated information. The finalised IA will be issued to the market at the ITT stage of procurement so that suppliers can submit a tender for targeting subsidy within Lot 16’s IA.

West and East Sussex Councils collaboratively supported this approach further reinforcing our thinking that this procurement type is the right approach for this area.

3.2 BDUK Classifications and methodology for this PR

During the PR, BDUK categorised premises as gigabit White, Grey, Black or Under Review.

Subsidy control classifications are set out below:

• White - indicates premises with no gigabit network infrastructure and none is likely to be developed within 3 years^{[footnote 1]}
• Grey - indicates premises where a single qualifying gigabit infrastructure from a single supplier is available or is to be deployed within the coming 3 years^{[footnote 1]}
• Black - indicates premises with two or more qualifying gigabit infrastructures from different suppliers being available, or will be deployed within the coming 3 years^{[footnote 1]}
• Under Review - indicates premises where suppliers have reported current or planned commercial broadband coverage, but where claimed current gigabit coverage has not been verified, or, in respect of planned build, where evaluators are confident that gigabit infrastructure will be delivered, but some risks to delivery remain, or there are some gaps in evidence

BDUK will only provide subsidy to target premises that have been designated as White. Premises which have been designated as Under Review may be included within the Deferred Scope of a procurement. Where this is the case, a further review will be undertaken to confirm whether they are Grey or White before they are released for build.

In accordance with the OMR/PR processes, supplier data submitted during the OMR and PR has been mapped using a methodology that protects commercially sensitive supplier data. To reflect this sensitivity, we will only release White and Under Review Unique Property Reference Numbers (UPRNs).

3.3 Summary of PR findings - premises eligibility

For presentational purposes only, postcode-level mapping has been used to present the map showing eligible premises (NB we will only subsidise build to premises which have been designated as White - postcodes are not used to determine IAs for subsidy).

For this purpose, postcodes have been classified as follows:

1. A postcode is White if any White premises are present.
2. A postcode is Under Review if any Under Review premises are present.
3. A postcode is Black if all premises in the postcode are classified Black.
4. A postcode is Grey if all premises are Grey or a mixture of Grey and Black.

A postcode-level map summarising these premises classifications is provided in Annex A. Suppliers - please note that this map does not show which UPRNs have been determined as White and Under Review.

The outcome of the PR is summarised in terms of White, Grey, Black and Under Review postcodes and premises below:

Postcode Classification	Number of Postcodes	Number of Gigabit Black Premises	Number of Gigabit Grey Premises	Number of Gigabit Under Review Premises	Number of Gigabit White Premises
White	5,090	793	16,444	25,408	45,214
Under Review	12,625	10,060	62,201	213,224	0
Grey	3,950	10,657	59,811	0	0
Black	572	12,090	0	0	0
Total	22,237	33,600	138,456	238,632	45,214

3.4 Forthcoming procurement

During the PR stage for East Sussex (Lot 16), BDUK sought responses from the market and other stakeholders to validate the Annex A Subsidy Control map (showing Gigabit White, Grey, Black and Under Review determinations).

BDUK also carried out market engagement to seek feedback from suppliers about the design of the proposed IA and Lot, the procurement type (A - local supplier, B - regional supplier or C - cross-regional supplier) and also the capacity of the market to bid for a potential procurement.

The total public funding investment has been based on the final number of premises requiring subsidy. BDUK will confirm a budget drawn from public funding for this area within the forthcoming tender documentation. Details of any restrictions on the use of public subsidy will be explained within the tender documentation.

Indicative funding allocated to the combined Lots 1 and 16 procurement is as follows:

Type B - (Total of 62,188 UPRNs) approximately £100,635,800 split as follows:

• Initial Scope: 45,686 UPRNs approximately £80,204,800
• Deferred Scope: 16,502 UPRNs approximately £20,431,000

The procurement type selected for West and East Sussex (Lots 1 and 16), following engagement with the market and other stakeholders, is anticipated to be a single Type B regional supplier contract. A premises level map detailing the proposed IA can be found in Annex B.

The regional supplier contract includes two categories of intervention: Initial Scope, where the regional supplier should build as quickly as possible and Deferred Scope where we wait and see whether commercial plans or voucher projects translate to delivery, but could then build if not.

For premises that are included in the Deferred Scope of contract, we will seek a price from the regional supplier, but will not authorise build unless and until they are re-classified as White. We will always either descope Under Review premises or defer build to them and we will always descope Grey or Black premises.

West and East Sussex’s (Lots 1 and 16) forthcoming procurement will be carried out in accordance with the Public Contracts Regulations 2015 (PCR2015). BDUK procurement approaches are designed to address the scale of the individual procurements. West and East Sussex’s (Lots 1 and 16) procurement will be conducted in a transparent and non-discriminatory manner.

The Authority, BDUK, reserves the right to amend or withdraw the procedure for the competitive sourcing process at any time. Any amendments will be done in line with the Procurement Regulations.

Suppliers acknowledge and accept that by issuing this document (PR Closure Notice) BDUK shall not be bound to progress or conclude any related procurement activity.

Under no circumstances shall the Authority incur any liability in respect of the information contained in this Closure Notice or supporting documentation.

Timescales

The following table summarises the indicative timescales for the procurement:

Activity	Date
Procurement start date (SQ Launch)	January 2023
Estimated contract award date	July to September 2023

See Project Gigabit procurement timelines for more information.

3.5 Summary of PR findings

• There are 45,214 White premises (out of 478,139) where the market does not intend to build, indicating there is a strong commitment from active suppliers in East Sussex to reach a large proportion of premises in the county.

• The combined East and West Sussex IA was designed to address areas outside of where we expect the commercial sector to build to, prioritising footprints where there is an appetite for BDUK to go further, faster.

• We contacted all known national and local suppliers to ask them to respond to the OMR and PR. This included working closely with East Sussex LA to ensure active and prospective suppliers were aware of the OMR and PR and could feed in their responses.

4. Conclusion

A key output for the OMR/PR for East Sussex (Lot 16) is the map showing premises that are eligible for subsidy.

From this map, BDUK developed the IA which was proposed to the market during the PPME phase. Annex B sets out the draft IA map at UPRN level.

This identifies the areas where premises are eligible for subsidy. A full list of White and Under Review UPRNs is available on request to suppliers via ukgigabit@BDUK.Zendesk.com.

5. Annex A – Map indicating locations of eligible premises

The postcode level map below indicates areas where those premises eligible for subsidy are located ie White areas. These eligible premises may be included within the IA.

Black, Grey and Blue (Under Review) areas indicate where those premises ineligible for subsidy are located.

East Sussex (Lot 16) level map (showing subsidy control classifications at a postcode level)

6. Annex B – Map of Proposed Intervention Area

The map below highlights the IA that was approved following completion of the PPME exercise.

Please see section 3 above for information on BDUK’s findings, contextualising how eligible premises were included in the proposed IA.

The above premises level map indicates eligible premises that form the proposed Type B procurement.

Those premises which are highlighted in orange (45,686 premises) are referred to as the ‘Initial Scope’ premises that will be targeted for subsidy.

Those premises which are highlighted in blue (16,502 premises) are referred to as the ‘Deferred Scope’ premises, which will not be targeted for subsidy unless they have been determined to be eligible (White) as part of BDUK’s monitoring process.

This map is accompanied by a list of UPRNs that fall within the IA, clearly demarcating which premises are within ‘Initial’ or ‘Deferred Scope’ which suppliers can request via ukgigabit@BDUK.Zendesk.com.

1. There may be occasions where credible plans extend beyond a 3-year period, in that case, these may be taken into account. ↩ ↩² ↩³