Guidance

Question 1

1. Before you start: forming a community group and deciding on the best solution

Accepted Answer

Before undertaking a community-led approach, we would recommend giving consideration to the advice below.

1.1 Forming a local group

The first step common to any eventual approach is to form the local group through which the resources and efforts can be focused. This typically consists of three activities:

Identifying local leader(s). It may be someone with some technical know-how or just an enthusiastic local resident.
Gauge/generate local support. Maintaining a high level of enthusiasm within the community is vital for success.
Identify the local and external key stakeholders and supporters. The base of individuals – local and external – that collectively have the drive, skills and influence that will ‘make things happen’.

1.2 Define the problem

As a first action, it may be helpful to contact your Local Body directly for information on planned infrastructure upgrades in your community, this map lists all Local Bodies

Broadband availability is influenced by local geography, demographics, the legacy telecommunications infrastructure, accessibility to electricity, and planning requirements. These factors may also affect the relative suitability of the various possible solutions. Therefore defining the problem is an important first step for any community group. This exercise may include the following components:

Confirm the scope of the Local Body plans

This will determine whether the community is currently inside or outside an existing broadband scheme, and the proximity to the new infrastructure being built under existing schemes.

Determine the area size and density

Define the boundary of the community. This may be an existing administrative boundary, or defined by a subset of contiguous or non-contiguous postcodes, or defined at address-point level, across one or more communities.

The community’s needs

Talk to individuals and businesses to understand their requirements and expectations for now and the future from the broadband solution. This may also involve speaking to publicly funded institutions in your area, such as schools, doctors’ surgeries and the local Parish Council, who may also have an interest in upgrading the community’s broadband infrastructure.

Existing local telecoms infrastructure

How are existing voice and data services currently provided? For example, identify which exchange(s) and cabinet(s) serve the premises, the types of services that are available from that exchange, and the approximate length of the lines from the premises to the cabinet serving it (or to the exchange for lines that are not connected to a street cabinet). Are there alternative access providers in the area or nearby? Local Bodies may have recently conducted a mapping and public consultation exercise to document existing service availability.

Funding and other contributions

What funding is available to the community – can it raise some equity or will the project rely entirely on external funding support? Would community members be willing to commit to take up services in advance? Would they be willing to offer benefit-in kind contributions, e.g. digging part of the route? For more information on funding, visit the Funding Options page.

Identify key landowners and potential infrastructure that could be leveraged

Commitment from landowners and site/asset owners to the project improves the feasibility of an own-dig project or supplier’s solution.

Any community-led approach is likely to require significant interest across the community to be successful. Free to use online survey tools such as Survey Monkey (or numerous available alternatives) may be a good way to establish demand in the local community, and the appetite for demand aggregation schemes or raising community funding.

It may also be helpful to review Cybermoor’s Broadband in a Box guidance before proceeding, in particular the ‘Getting started’ section.

Question 2

2. Advice on feasibility work to undertake before deciding on a solution

Accepted Answer

Technical knowledge within community groups is likely to vary from community to community. Unless members of your community are very confident in understanding broadband infrastructure, a preferred option may be to run a competitive tender for a partner who could deliver a feasibility study, and advise on the selection of build and operating partners. Potentially, this could subsequently lead to project management of the whole project from start to finish.

A typical feasibility study might include the following:

A technical appraisal of different solutions, including both the access, backhaul and power requirements. For more information on different technologies see the broadband technology options page
Percentage of the community that would be able to access the solution
Cost estimates, including materials, civils, installation, operations and project management
Requests for Proposals to potentially go to tender for suppliers
Financial model
Service provision
Key risks and issues
Key activities and dependencies.

It may be helpful to review Cybermoor’s Broadband in a Box guidance before proceeding, in particular the ‘Study phase’ section.

Question 3

3. Possible legal structure for a community group

Accepted Answer

A community group undertaking work and funds to improve broadband infrastructure will need to give consideration to which business structure would best suit its needs. The choice of business structure will ultimately depend on the needs of the community’s project. Typical structures may include:

It may be helpful to review Cybermoor’s Broadband in a Box guidance before proceeding, in particular the ‘Getting started’ section.

Question 4

4. Technology options for broadband

Accepted Answer

Broadband infrastructure consists of a number of different elements, and different technologies can be used for each of these elements. The network infrastructure is in three main parts:

National Backhaul is required to bring internet access to the local exchange.
Local Backbone brings internet access to the specific community area.
Access Network provides the final distribution to individual properties within the community area.

Below is an example of how a typical terrestrial broadband system in the UK currently works:

Listed below are the main options for access network technology currently available in the UK. Each of these technologies is well established and currently provides services to hundreds of thousands of customers across the world. You can also visit this link for a list of suppliers utilising these different technologies.

4.1 Fixed line broadband:

Fibre to the Premises (FTTP)

This is where optical fibre is run directly to each premises, allowing for a fully future proofed internet connection. Speeds offered over FTTP are far above the national average - typically up to 1 gigabit per second. Very high upload speeds are also offered, which is particularly useful for businesses or those working from home.

Cable (hybrid fibre coaxial)

This is a form of superfast broadband infrastructure in the UK, where fibre is installed to a cabinet and then coaxial copper cable connects premises in the vicinity. Coaxial cable can typically handle download speeds of up to 200 megabits per second.

Fibre to the Cabinet (FTTC)

This is the most widely available form of superfast broadband infrastructure in the UK, which uses the existing copper telephone network. Fibre is installed to a nearby cabinet, connecting the remaining distance to each premises with the existing copper line. FTTC connections can typically handle download speeds of up to 80 megabits per second, but this speed will decrease the further a premises is from the cabinet.

4.2 Fixed Wireless Broadband:

Fixed wireless broadband is a way of achieving connectivity in premises without the need for a physical (wired) connection. A small dish is attached to the side of the property, which can be purchased outright or rented by the consumer, and then links to a local transmitter which is connected to the fibre network spine. Fixed wireless can typically achieve speeds of up to 50-60Mbps.

4.3 Satellite Broadband:

Satellite broadband is a way of achieving connectivity to premises, without the need for a physical (wired) connection. A satellite dish is installed onto the property, which can be purchased outright or rented by the consumer, and a satellite internet package can then be bought by the consumer. There are few geographical limits on satellite broadband availability and typical speeds offered to UK consumers are currently up to 22 megabits per second. Additional considerations to be aware of are that satellite packages currently tend to be more expensive for consumers than fibre or fixed wireless packages, regardless of data limits per month, and that the latency of satellite services can affect the quality of certain internet applications.

4.4 Mobile Broadband:

The four mobile network operators (Vodafone, EE, Three, and O2) provide widespread coverage of mobile broadband through their 4G and 3G networks. This does not require a physical (wired) connection. Consumers purchase a “dongle” that plugs into their computer, they then tether their mobile phone to their computer, or sign up for tablet services direct, and will then have access to the mobile network of their choosing. Ofcom provide postcode level data on service availability from each of the four mobile network operators. 4G is due to be available to 98% of UK premises by the end of 2017. One consideration to be aware of is that at any given data limit per month, mobile packages currently tend to be more expensive for consumers than fibre or fixed wireless packages.

Question 5

5. Funding options for communities page

Accepted Answer

There are several potential funding sources open to communities seeking to raise money for broadband infrastructure. Each section below outlines potential sources for funds. A project may require a funding mix comprised of two or more separate sources, including potentially both public and private funding. A number of the case study projects have used a mix of both public and private funding sources.

The inclusion of public funding sources in the mix may trigger State aid and/or public sector procurement rules, either of which would add complexity to a project. Using only private sources of funding has the advantage of allowing communities to avoid this complexity.

5.1 Public funding sources

Local Bodies’ initiatives to grant funds or offer loans to community projects.

Local Bodies’ initiatives to grant funds or offer loans to community projects Some Local Bodies offer (or may be planning to offer) initiatives to match fund community broadband projects. Others offer loans or loan guarantees to support community broadband projects. Contact your Local Body for more information.

For example, in Scotland, help may be available to communities from the Community Broadband Scotland website, including access to funding for community broadband projects. Visit the Community Broadband Scotland website for more information.

Access Broadband Cymru: In Wales, the Welsh Government’s Access Broadband Cymru scheme can provide grants to fund the installation costs of new broadband connections to those currently with sub-superfast speeds. The scheme cane offer £400 for each individual towards the cost of a 10Mbps service, and £800 towards the cost of a 30Mbps service. Visit this website to check if you are eligible.

Gigabit Voucher Scheme Scheme

In March 2018 the Local Full Fibre Networks programme launched its £67m Gigabit Broadband Voucher Scheme. Small to medium sized businesses can claim a voucher worth up to £2,500, and residents can claim a voucher worth up to £500 as part of a group project. Businesses and local community groups interested in requesting a voucher can find details of suppliers in their local area on our website at: https://gigabitvoucher.culture.gov.uk/.

Public Works Loan Board

In England and Wales, Parish Councils and authorised Parish Meetings can apply for long-term low interest rate loans from the Public Works Loan Board in order to invest in community infrastructure, including improvements to broadband infrastructure. One of the case studies featured on this website involves a project that plans to finance broadband infrastructure through the Board. Visit the Public Works Loan Board website for more information.

European grant funding

European funding via the European Regional Development Fund (ERDF) and the European Agricultural Fund for Rural Development (EAFRD) may also be available to your community, either as direct grant or via a Local Body scheme. Contact your Local Body to see if this is possible in your area.

European Investment Bank (EIB)

The EIB has substantial funds available for investment in infrastructure projects including broadband, under the European Fund for Strategic Investment (EFSI). More information can be found on this website. The EFSI is unlikely to be suitable for small projects.

Better Broadband Scheme

Where premises do not have access to speeds of at least 2Mbps, they are eligible for a subsidised broadband installation through the Better Broadband Scheme (see the BDUK Guidance notes). A subsidised installation can only be provided through suppliers registered on the scheme, usually via satellite broadband but also through wireless or fixed broadband networks in some areas. Some suppliers may be able to aggregate the subsidies that are available for a group of neighbouring premises to help support the costs of providing a broadband service.

Follow this link for a list of suppliers who may be able to provide improved broadband connectivity for individual premises or local communities.

BT’s Fibre Community Partnership is an approved supplier to the Better Broadband Scheme. The following form can be used to coordinate interest here. If you are starting a BT Community Fibre Partnership and your local community is not listed on this form, please email better.broadband@culture.gov.uk with your details.

5.2 Private funding sources

There are many options for raising private finance for undertaking a community broadband project. The list below is not exhaustive, but does contain a number of common methods for raising private funds. Visit the case studies page for more information on the sources of finance for each project.

Crowd funding platforms for donations

Some local businesses and residents may be willing to make donations to help fund community broadband initiatives. Crowd-funding platforms might be used for this purpose. There are many platforms available to support broadband infrastructure investments, including – but not limited to – Spacehive and Buzzbnk.

Crowd funding platforms for investment

Crowdfunding allows you to issue regulated investments such as shares, loans or bonds in a scheme which offer a variety of returns including interest and dividends. Bonds can be of varying terms (up to 20 years in some cases) depending on the scale and nature of the project.

Crowd-funding platforms can be used to raise Enterprise Investment Scheme-compliant investment funds (more information on the Enterprise Investment Scheme and other related schemes below). There are many platforms available to support broadband infrastructure investments including – but not limited to – Abundance Investment and Crowdcube. The UK Crowdfunding Association is the trade body for the crowdfunding industry and has a list of around 40 platforms who may also be able to help with funding requirements.

It is important to be aware that issuing a crowdfunding investment is a regulated activity and can only be carried out by companies authorised by the Financial Conduct Authority.

Loan finance – commercial, private, bonds

Loan finance is one way for community-led projects to self-finance. However, the availability and cost of loan finance is dependent on the level of risk from the project and many lenders are currently unfamiliar with long-term investments in broadband networks. This can increase loan rates and in doing so reduce the viability of a project. For example, the Cybermoor Market Test Pilot was quoted interest rates of 8-12% by investors.

Alternatively, project sponsors might consider raising loan finance from local residents and businesses who would be direct beneficiaries of the investment, as they may have a different perspective on the balance of risk and reward, and therefore the rates of return required from the loan. For example, local investors might accept a much lower rate of interest on any loan given the additional benefits they will enjoy in the form of faster broadband and enhanced property values

Some local bodies are considering plans to issue local or municipal bonds to support infrastructure investment. Retail Bonds have also been successful as a means of raising funds for green energy projects, and a number of organisations are evaluating their appropriateness for broadband infrastructure projects.

Social investors invest in projects for both a financial and social return on their investment. As such, they tend to favour investing in financially viable projects that will provide long-term social benefit to communities. However, experience from the government’s Market Test Pilot programme suggests that social funding does not always offer a cheaper alternative to a commercial loan, and that despite their underlying ethos, social investment funds are not always able to accept the associated risk with this kind of community project. They will, however, generally lend over a longer term than commercial banks.

The social investment market is becoming more established and several brokerage organisations are operating in the market. The Enterprise Investment Scheme and other related tax allowances are raising the attractiveness of social investment (including in rural broadband projects) both to philanthropic major investors and local investors in individual communities. The The Social Stock Exchange offers a platform for companies to raise funds from Social Impact investors, and a number of member organisations (such as Broadway Partners) are active in this area.

Community shares

Community shares offer a way for individuals to invest in enterprises which serve a community purpose, and are one of the fastest growing forms of ethical investment. Many community broadband projects such as Cybermoor and B4RN have successfully used community shares as a way of raising funding. The Community Shares Unit webpage provides guidance and advice on raising community shares. As with crowd funding and social investment, the Enterprise Investment Scheme is again relevant here, and is set out in more detail below.

The Enterprise Investment Scheme, Seed Enterprise Investment Scheme and Social Investment Tax Relief (known as EIS, SEIS and SITR) are well suited to raising funds for investment in broadband schemes – the tax benefits to investors are generous, ranging from 30% to 50% allowance against income tax, as well as offering capital gains tax concessions. The minimum three-year lock-up requirement also matches the likely cashflow profile of a typical broadband project. See www.eisa.org.uk and Enterprise Investment Scheme for more information.

It may also be helpful to review Cybermoor’s Broadband in a Box guidance before proceeding, in particular the ‘Funding’ section.

Question 6

6. State aid information

Accepted Answer

State aid is any advantage granted by public authorities through state resources on a selective basis to any organisations that could potentially distort competition and trade in the European Union and the European single market.

The definition of State aid is very broad because ‘an advantage’ can take many forms. It is anything which an undertaking (an organisation engaged in economic activity) could not get on the open market.

See the government’s State aid page for more information.

6.1 BDUK approved State aid scheme

Broadband Delivery UK (BDUK), part of the Department for Culture, Media and Sport, is responsible for UK government public funding to support the delivery of better broadband and mobile connectivity to the UK. BDUK has recently secured a new State aid scheme approval to provide public funding for broadband rollout up to 2020. This is an ‘umbrella’ scheme where BDUK will be the national authority that will grant State aid clearance to individual local projects, provided that they are able to meet certain technical and commercial conditions.

If your project has secured access to public funding, and/or you have any State aid-specific queries, please email the following address: stateaidforbroadband@culture.gov.uk

6.2 Other State aid routes

There are two other State aid routes in which public funding can be allocated to Broadband rollout, although both have limitations compared to the BDUK State aid scheme:

De minimis funding

Aid given to a single recipient that is lower than €200,000 over a 3 year fiscal period is considered to have negligible impacts on trade and competition and can therefore be considered to be De Minimis. However, this €200,000 ceiling must take into account all aid awarded on a De Minimis basis to a recipient from UK public funds over a 3 year period and not just that received in relation to broadband.

General block exemption regulation (GBER)

Broadband, along with certain other sectors of the economy, can, in principle, be covered by the GBER. However, all the provisions need to be respected without possibility of derogation, and it does not provide the same level of flexibility as the BDUK State aid scheme.

Question 7

7. Support available to communities

Accepted Answer

The process of developing a community broadband scheme can be complex and will be unfamiliar to most communities. As well as consulting the guidance available on this BDUK website, it is worthwhile to seek support from organisations with specific experience supporting broadband projects.

The following organisations may be able to support a community design and deliver different aspects of a broadband project.

Note that DCMS has provided the links to the organisations below with their permission to assist communities in the potential development of community-led broadband projects. However, DCMS does not endorse the organisations listed above others who may provide this information, and does not warrant the accuracy of all the information on any of these links.

Other organisations and sources of specialist advice:

INCA: Alternative supplier marketplace
Social Investment Business - The Social Investment Business offers a range of loan and grant funds to help charities and social enterprises deliver social impact.
Community Shares Unit - The CSU’s objective is to support enterprises, promote good practice and raise awareness of community shares as a sustainable funding mechanism for community enterprises.
Office of the Regulator of Community Interest Companies - Comprehensive information for people who want to form a community interest company (CIC), other stakeholders and those giving professional advice about CICs.

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