North Skye Broadband announced today (Thursday 20 July) that it will no longer be processing an application for State Aid funding from Broadband Delivery UK (BDUK) and Community Broadband Scotland (CBS).
The community organisation stated that the application process has been "dogged by delays due to complex public procurement requirements."
Those requirements included a nine-month delay waiting for a new State Aid funding scheme to be drawn up and approved by the EU after the Phase 2 scheme expired in June 2015.
North Skye Broadband (NSB) has already undertaken two separate State Aid Public Consultations – a mandatory requirement of the procurement process – and the decision not to proceed further comes as it was due to undertake a third such consultation, which itself has been delayed for nearly six months awaiting new and more accurate “Open Market Review” data (essential for the procurement process).
Geoff Semler, Chair of NSB, explained the reasons behind the decision: “Despite recent urgent discussions with HIE, CBS, and Scottish Government, a joint statement approved by all three bodies was issued to NSB on 22 June 2017 confirming that, in accordance with EU rules, the only funding available to North Skye Broadband in excess of the €200,000 de minimis provision would be via one of the formal State Aid schemes, none of which permit any funding other than for a network that is owned and operated by a commercial provider.
"Thus the State Aid process actually precludes NSB from adding any value to the implementation or operation of the network, instead it simply uses NSB as a funding conduit to provide a commercial operator (and its benefactors) with a state subsidy. Accordingly, it was agreed that as none of these schemes meet NSB’s requirements, the formal application process should be discontinued.”
Robin Crorie, Secretary to NSB, said: “The Scottish Government’s R100 initiative has not, as yet, been fully developed. However, in its latest guidance document, published on 5 July, it provided sufficient detail to confirm that it will continue to use the existing BDUK 2016 broadband scheme, which excludes community projects such as ours, and commercial providers are being invited to register their interest on the Public Contracts Scotland web portal.
"Where it is deemed uneconomic to provide a home or business with a superfast broadband connection using any other technology, and such a connection is requested, it is highly likely that the R100 commitment will be met by providing a voucher to subsidise a satellite connection.
"However, it is clear from the interest expressed by those users within our “white” areas who are already using a satellite broadband connection that it does not meet their needs. The monthly costs of even a modest monthly data quota are extremely high, and on using up that quota, users are faced either with punitive excess data charges, or simply being cut off completely until the start of their next billing cycle.”
Elgar Finlay, who has been providing project management and support to NSB, stated: “NSB is exploring the business case for a small pilot/demonstrator network for at least 50 premises, including five business users. Of those five, three already use a satellite connection and are keen to replace these with a much cheaper, and very much faster, FTTP connection provided by NSB. Planning for this pilot/demonstrator is being undertaken in partnership with a private sector partner that is fully supportive of what NSB is trying to achieve, one that is cooperating with NSB in the development of a bid for de minimis funding from CBS to demonstrate a new paradigm for providing truly future-proof ultrafast broadband services for the benefit of, and in co-operation with, rural communities across Scotland.”