THE company that pioneered rural broadband in the county says it’s now time for others to follow its award-winning lead – having shown the way with what could be done.

Today, allpay confirmed that after “considerable investment and resources” it was no longer viable for the company to continue with broadband provision in some rural areas.

Allpay boss Tony Killeen said he was “excited” that the company’s “Big Society in action” initiative to provide broadband to homes and business across the county was being met by the multimillion pound network being rolled out by Fastershire – the partnership between Herefordshire Council, Gloucestershire County Council and BT to build a future proof world class broadband network for the two counties.

After leading what he termed the “rural broadband breakthrough” in the county, Mr Killeen said allpay Broadband’s vision to get the county connected is set to be accelerated by Fastershire - a partnership between Herefordshire Council, Gloucestershire County Council and BT to build a future proof world class broadband network for the two counties.

Broadband provision has moved on from 2009 when Whitestone based allpay went live with the county’s very own wireless internet service.

Back then, BT believed options to link up the county’s not spots - where broadband was either unavailable, intermittent or slow - were not cost effective.

Allpay showed what could be done, spreading the word from on high with a pioneering plan that pitched church steeples as relay points for a superfast service  to the most remote locations.

In 2012, the allpay initiative – worked with the Diocese of Hereford - won a national Next Generation challenge award for Rural Leadership and Community Development.

 By September that year BT switched on to where allpay had gone backed by the award of the then Borders Broadband contract from Herefordshire Council.

According to Fastershire, by the end of 2016, around 90% of both counties will have access to fibre broadband services. The ultimate aim is that by 2018 there will be access to broadband speeds of 24Mbps and above for all who need it.

Mr Killeen said: “When we first pioneered the use of church towers to transmit an internet signal to digitally excluded households in what was a UK first, we were, off our own backs, providing a public service when nobody else was or wanted to.

“Not only did we connect communities, but we raised awareness of the issue and have paved the way for the investment that’s happening today. The pillars of allpay are built on inclusivity – whether social, digital or financial – and this ethos runs through each of the businesses we operate.”

He added that legislative changes and market forces have led allpay to the decision to decommission the service in certain rural areas from the end of July 2015, but that the majority of affected customers will be covered by the Fastershire roll-out.

The Fastershire project will benefit homes and businesses across the two counties which currently receive downstream speeds of less than 2Mbps. Fastershire, says it will make sure all premises in the project area are able to receive a minimum of 2Mbps.

Mr Killeen added that the “broadband breakthrough” led by allpay was one of his and his company’s finest achievements and that he was excited that his company’s vision to provide digital connectivity across the county was now given the recognition it deserves.

The  Fastershire contract is worth £56.6 million as a partnership between BT, the Government’s Broadband Delivery UK (BDUK) Programme, Herefordshire Council and Gloucestershire County Council.

BT is contributing £20.9m, BDUK is contributing £18.17m, Herefordshire Council £10.1m, and Gloucestershire County Council £7.5m.

The contract pitches approximately 90% of premises in the county switched on to superfast broadband by the end of 2016.

Herefordshire Council - in agreement with Gloucestershire County Council – recently approved an approach to the latest stage of the scheme – a potential extension to the contract with BT to support fibre enablement of cabinets still to be converted.

At face value this is straightforward for BT as “fibre to cabinet” is their standard technology.

Recommendations now signed off by the council effectively ask BT to provide information to help the project identify relevant cabinets serving 80 or more premises at 30Mbps and above.

Options determined for open procurement for stage 3 will be decided on by the council’s Director for Economies, Communities and Corporate Geoff Hughes and  cabinet member for economies and corporate services councillor Graham Powell.

 The recommendations also mean a “milestone” September completion date for central  Herefordshire will be reviewed in late August.

As previously reported by the Hereford Times, BT wanted the date extended to December.

BDUK has ring-fenced funding for the next stage of the  county’s broadband delivery programme for Herefordshire – the implementation of which is outlined in the Fastershire Broadband Strategy 2014-18.

To meet the ambitions of the strategy, additional deployment needs to take place beyond extending the current contract.

The recommendations, as agreed, are based on exploring options for open procurement to test the market, understand emerging technologies  and assess value for money.

While the delivery of fibre broadband is recognised as a priority for the county, progressing the project “at any cost” is seen as jeopardising the ambitions of the authority and BDUK in ensuring maximum rural reach.

Where consideration needs to be given to value for money, coverage and cost information on cabinets is essential.

For central Herefordshire (area 11 of the project) BT requested an extension of  completion date to December 2015.

Instead, the project agreed an extension to September with scope for a further review.



Herefordshire Council and Gloucestershire County Council are in an agreement to jointly contract fibre broadband delivery for the non-commercial deployment areas of the two counties – known as Fastershire.

Herefordshire is the lead partner.

In December 2012, Herefordshire Council’s cabinet agreed to enter into a contract with BT for the delivery of broadband in Herefordshire and Gloucestershire.

By the end of the procurement process, BT was the sole remaining bidder.

The contract is worth £35.42m.

Fastershire was one of a small number of pilot projects and, as such, has its own bespoke contract.

Based on a BT model, between 85-90 per cent of premises in Herefordshire should have access to fibre broadband by the end of 2016.

This figure is made up of BT’s own commercial deployment and the Fastershire intervention area created through an open market review  in 2011 to establish areas not planned  for commercial investment  and so eligible for public subsidy.

This intervention area needed to be agreed by the EU to qualify for State Aid.

BT’s Best and Final Offer, on which the contract was based, outlines fibre broadband reach to 77.8 per cent of premises.

in the intervention area for Herefordshire, providing for download speeds of 30Mbps and above.

This represents 35,424 out of  45,532 premises within the area.

In addition, every premise in the intervention area is intended to have, as a minimum, access to the Government’s Universal Service Commitment of  around 2Mbps.

This stage of the deployment is due to finish in December 2016.

The emphasis of the programme has always been on rural reach, with more populated areas better placed to benefit from commercial delivery.

Fourteen “milestone” areas were created across the two counties – seven in each - with targets and timescales applied to each as set by BT.

If BT does not achieve  coverage targets within each milestone by the target date it is liable to contractual default.

So far, some 49,000 premises have been enabled with fibre broadband across the commercial and intervention areas since December 2012, compared with around 85,000 across the county.

On average, take up of the faster broadband service across the county was 20.67 per cent - as at the end of April 2015.

But BT has said that it is unlikely to meet its  targets - as set out in the contract - due to multiple factors such as the physical challenges of delivery in rural areas, more difficult than anticipated fibre delivery to premises and the project rejecting ineligible premises.

The council will reject any premises that does not contribute toward the baseline on which the contract was set.

So BT has submitted change requests to allow more time to complete the delivery in the affected milestone areas.

By agreeing to this request BT will avoid contractual default.



Stage 1 - Commercial deployment delivered by BT at its own cost.

Stage 2  - The current Fastershire contract with BT due to be completed in Herefordshire by December 2016

Stage 3 - Potential extension to the BT contract.

Stage 4 - Procurement of project Lot 2 ( covering Golden Valley with an estimated value of £2 million) and Lot 3 (West Herefordshire with an estimated value of £1.5 million).

Stage 5 – based on targeted grant funding on demonstrated need for fibre deployment – essentially remaining premises likely to be the hardest, and most expensive, to reach.

Fastershire - Stage 3

 The council has approved an approach for Stage 3.

This stage aims to assess the potential to extend the existing contract with BT where it is economic to do so.

BT would be commissioned to fibre enable cabinets not covered in the current contract.

As the enabling of the cabinets is part of  BT’s core activity this should be straightforward to build into the current programme.

Stage 3 does not need a separate procurement because it falls within the existing value of the contract.

Also, if contracted before the end of  this month, this extension would be covered by existing State Aid cover via BDUK – with the potential for BDUK State Aid cover to be extended for a year.

If not, the project will have to apply for its own State Aid cover .

To prepare for the potential extension of the contract, a second Open Market Review (OMR) was carried out over November last year to refine the list of BT cabinets which it is believed will not be fibre enabled through either commercial initiative or the current contract with BT.

Some postcodes that were deemed to be commercial in 2011 are now eligible because they have since dropped out of the BT commercial programme.

To some extent, then, Stage 3 may target funding at areas which were already assumed to be covered and so providing further subsidy  may not lead to an incremental rise.

In accordance with OMR cabinets that are planned to be enabled through commercial programme - via BT or Virgin - have been removed from the intervention area for next stage of deployment.

The reasoning behind this is that public subsidy does not cover cabinets due for commercial deployment or “unduly impact” on fibre providers.

Value for money value is a key component of  Stage 3 to counter cost next to return.

This relates to the cost of enabling a cabinet divided by the number of premises that can be reached by 30Mbps and above.

The lower the number of premises reached by a cabinet the higher the cost per premise.

BT has been asked to provide information on service provision by cabinet to assist the contract decision process.



Herefordshire Council has a further £5.5 million coming its way to help stretch superfast broadband further.

The sum has now been allocated to the county to seek to so-called “ 10% solution” connecting communities well of the main line.

Though the council recognises a need  to work with alternatives to fibre, in Herefordshire, wireless has historically been the  more likely of those alternatives.

 But wireless doesn’t immediately attract funding.

Fastershire wants the majority of wireless elements utilising licensed frequencies and measures to mitigate against the overspill of subsidised wireless networks into areas that  already have NGA risking double funding and market distortion .

Two new procurements to increase coverage in the Golden Valley and north west of the county – where speeds range from a 4.4Mbps average to a 3.7Mbps median - go out in January next year as open to any broadband provider able to meet a 2018 completion date.

There are opportunities for bursary funding for specific communities, businesses and individuals in the remaining areas.

By the end of 2015 85% of premises in the county should have Next Generation Access (NGA) broadband providing download speeds of over 30Mbps.

Additionally, every premise will have access to the government’s Universal Service Commitment of >2Mbps.

The £250m SEP, which will run from 2015, aims to achieve 95% fibre coverage nationally.

From this programme, Herefordshire and Gloucestershire have been offered an indicative allocation of £10.98m split roughly 50/50 between the counties.

While this is one of the largest allocations nationally, it  is acknowledged that this may not enable the authorities to reach 95% coverage indicating the difficulty faced in reaching the final 10-15% in this area.

To leverage the full £11m - £5.5m for Herefordshire - which is not in the capital programme would cost approximately £350k a year to fund through borrowing.

The authorities are required to identify the same value in match funding.
During the course of the last year, Fastershire has been working to expand the  external funding available to the project both to increase the potential extent of physical access and to encourage the exploitation of broad band by local businesses.

As a result of this work, additional funds found include:

European Regional Development Fund - £657k capital funding from Department of Communities and Local Government to provide broadband grants to businesses in Hereford city centre and on the Rotherwas Enterprise Zone. 

Rural Community Broadband Fund - £620k capital funding from  Broadband Delivery UK (BDUK) to fund a contract extension to reach three additional rural communities.

Beyond 2015, the Department for Environment, Food and Rural Affairs (DEFRA) has announced that the new European Agricultural Fund for Rural Development (EAFRD) programme 2013-20 can support NGA broadband projects in the final 5%.

Broadband infrastructure and support projects have been identified in the European Investment Fund strategies of both the Gloucestershire and Marches Local Enterprise Partnership’s (LEPs).

It is hoped that the cumulative value of these funds, as well as other sources of  revenue funding, can reduce the burden on the authorities to match the SEP like for like with council cash.

The Fastershire team is involved in negotiating this flexibility with Whitehall.

Should these negotiations be successful, the requirement for cash match from Herefordshire Council may have reduced from around £5.5m to around £1.4m.


Strategically, the European Commission want to see universal access to >30Mbps  NGA by 2020.

At its simplest, the EC, through its state aid guidelines determine that NGA can only be delivered by fibre optic and must provide a step change to what is already available.

To date, state aid constraints have inhibited  subsidising alternative solutions such as wireless and mobile.

While the EC guidelines on NGA investment claim to be technology agnostic, the only real technology it provides the ability to subsidise is fibre.

There have been some changes in the treatment of wireless which enables it to be subsidised  and the National Competency Centre has stated that wireless could be treated as NGA as long as it is a lead to fibre, has
the capability to provide over 30Mbps and delivers over double the speed at a premises level than can already be achieved.

However, the business case to invest in deeply rural areas with wireless is recognised as “barely profitable”.

Added to that, the requirement to reinvest profits into fibre upgrades which were not viable to start with and the clarifications appear not to have altered the environment.

In terms of mobile, all the same issues are inherent as wireless. Additionally, the 4G market is not yet considered to be mature, so public bodies are prevented from proving that a market failure exists despite being able to estimate in which areas the market will ultimately fail to deliver.

However, there may be changes ahead which make 4G eligible for investment and it may well become a credible option.