Officer Delegated Decision – 4 August 2017

Report title: Myatts Field North Estate Fibre Optic Broadband

Wards: Vassall

Portfolio: Cabinet Member for Housing and Environment: Councillor Jennifer Brathwaite

Report Authorised by: Sue Foster: Strategic Director for Neighbourhoods and Growth

Contact for enquiries: Stephanie Hudson, PFI Client Manager, Housing Commissioning, 020 7926 3727, [email protected]

Report summary To consider the options for provision of high-speed fibre optic broadband to the Myatts Field North Estate, with the proposal to grant BT Openreach the necessary wayleaves in order to connect all council-owned properties at Myatts Field North to enable residents to access high speed fibre optic broadband.

Finance summary There would be no cost to the council resulting from the implementation of the recommendation. All costs of installation will borne by the provider.

Recommendations

1. To approve the waiver to the Council’s Contract Standing Orders which require a competitive tender process, in order to grant BT Openreach a Concession, to access Myatts Field North estate for the installation of fibre optic broadband.

2. To grant BT Openreach the necessary wayleaves, in order to connect all council-owned properties at Myatt’s Field North to fibre optic broadband.

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1. Context

1.1 There is no explicit Lambeth policy on the provision of broadband to housing estates.

1.2 The original design for the redeveloped Myatt’s Field North estate under the PFI scheme contained provision of CAT5 cabling to all new homes. However, this requirement was deleted under Value for Money cost saving exercise in 2011 after changes were made by the new government elected in 2010.

1.3 BT Openreach advise that internet connectivity to the estate is currently provided via three ‘green cabinets’. Two of these are already connected to the exchange via fibre optic cables (“fibre to the cabinet” or FTTC) and provide high access speeds to the properties served by those two cabinets, largely in the refurbished areas of the estate. The third, however, which serves the majority of the new build estate, is connected to the exchange with traditional copper cabling, which results in very low internet access speeds.

1.4 BT Openreach have confirmed that they have no plans to upgrade this third cabinet to fibre optic connection.

1.5 This is a Waiver Procurement Report. The proposed award is through grant of a Concession (see 9.3 below), where there will be no cost to the Council for installation and maintenance of the fibre optic infrastructure.

2. Proposal and Reasons

2.1 This request is driven by residents who have been complaining since late 2015 about their slow internet speed and difficulties some have experienced who work from home. Local ward councillors have raised this issue repeatedly on behalf of residents at meetings and during email correspondence with officers.

2.2 BT Openreach have confirmed that they have identified the estate as a “not spot” with poor connectivity. Therefore, they would prefer to provide fibre direct from the exchange to individual properties (“fibre to the property” or FTTP), rather than upgrade the existing cabinets, as noted above. In their unique position as infrastructure owner of the national broadband and telephone network, they can proceed to provide fibre connectivity to individual homes without any further permissions being required, as BT Openreach have existing wayleaves over the estate for the provision of land line telecommunications. However, to provide this to flats within blocks (which would include upper maisonettes), they would require a wayleave to enter each property. The fibre optic cables would be run to blocks using existing ducting and use internal risers (subject to survey) to connect to close to each individual property. There should be no damage to the properties or the estate landscaping. Should there be any unforeseen damage, this would be covered by the liability and indemnity clauses in the wayleaves. All of the relevant blocks are out of the defects period, bar one set of four maisonettes which will be by the end of June 2017.

2.3 Another company, Hyperoptics, has also requested the Council to grant it the necessary wayleaves to provide fibre optic connectivity to residents and has been actively marketing its potential service to residents. Their offering proposes fibre optic connectivity to a number of nodes around the estate, with CAT5 (or similar) cabling from there to individual properties. Some of this cabling would have to be run externally to buildings. Each node would require the installation of a cabinet with its own power supply.

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2.4 There are other companies similar to Hyperoptics in the market, and we also understand that Pinnacle, the current incumbent housing manager on the estate, are also launching a fibre broadband service. As they do not have access to the BT Openreach ducting, their proposal would involve trenching works across the soft landscaping of the estate.

2.5 BT Openreach have advised that they currently have agreements in place with two smaller internet providers (Andrews & Arnold Ltd and Zen Internet), as well as BT themselves. They advise that negotiations are in progress with Sky and TalkTalk to add them to the network, enabling residents choice over their internet provider. The other infrastructure providers offer limited choice and usually require customers to sign up to their service offer. Due to issues arising in connection with the service provided by another ‘monopoly’ provider on the estate we are keen to ensure that residents are not tied in to a single supplier and to provide choices for residents who want to improve their broadband speed using fibre optics.

2.6 It should be noted that wayleaves may be granted to more than one provider, but consideration would have to be taken to capacity within risers and other visible signs of infrastructure on the estate e.g. cabling, junction boxes.

2.7 The Council can only provide wayleaves to blocks that it owns i.e. not the private leasehold blocks. However, in order to provide consistency across the estate, we would liaise with the headlessees of these blocks to ensure that a single solution is provided for all residents. Similarly, we have requested BT Openreach to hold on any direct provision to stand-alone houses, while we determine the process for implementing a provider for the whole estate.

2.8 As a result of the foregoing and in the light of the concerns noted at 5.1 below, given the unique position of BT Openreach as the national telecoms infrastructure provider, and as the exisitng provider for areas of the estate already connected, it is proposed that they be granted the necessary wayleaves to access all Council properties on Myatt’s Field North Estate.

3. Finance

3.1 There are no financial implications arising from granting wayleaves allowing providers access to properties for the provision of fibre optic broadband at Myatt’s Field North. All broadband providers will install the fibre optic broadband for no charge and any damage caused as a result of undertaking this work is covered by the indemnity clauses within the wayleaves themselves.

3.2 The Council could consider charging providers a fee to enable them to install the fibre optic broadband and generate an income but this is not common practice and would need to be negotiated.

4 Legal and Democracy

4.1 The Council has delegated the authority to award this contract to the Strategic Director for Neighbourhoods and Growth.

4.2 Where the Council makes its property available to third parties for commercial purposes, it is effectively letting a concession contract. The Concessions Contracts Regulations 2016 require that contracting authorities competitively procure such contracts where the estimated value exceeds the threshold of £4.2m. For such contracts, the 2016 regulations limit the term for concessions contracts to 5 years, unless there are compelling reasons to grant them for a longer term. Such reasons would be linked to the time that a concessionaire would need to recoup the investment made plus a profit. If the value is below the threshold, the Council would be bound only by the 3

requirement to act reasonably, proportionately and transparently when evaluating and selecting persons or organisations to be given the opportunity to use Council assets.

4.3 The text of any wayleave proposed by BT Openreach would be subject to review by LBL internal legal advisers.

4.4 The Council’s Constitution requires that all key decisions, decisions which involve resources between the sums of £100,000 and £500,000, and important or sensitive issues, must be published on the website for five clear days before the decision is approved by the Director or Cabinet Member concerned. Any representations received during this period must be considered by the decision-maker before the decision is taken.

5 Consultation and co-production

5.1 Residents, both of council properties as well as private leaseholders are very unhappy with the current poor broadband connectivity and are eager to see some progress. This is a view supported by local ward councillors who have also expressed their desire to see this issue be resolved quickly on behalf of residents.

5.2 Marketing by Hyperoptics and responses to resident complaints to BT Openreach have raised expectations of imminent progress.

6 Risk management

6.1 Risk that BT Openreach’s network is not opened up to a wider group of internet suppliers. We believe that the likelihood of this risk is low and that there will soon be genuine competition for high- speed broadband supply on this network.

6.2 Risk that when BT Openreach undertake their site survey, they will not be able to complete the installation as anticipated. We believe that, given that all the new build properties are constructed to modern standards, with risers running between floors, this is unlikely. We would require the survey to be completed in advance of the wayleaves being signed.

6.3 Risk that Hyperoptics (and other providers) object and/or require wayleaves also to be granted to them as well. As noted in 2.5 above, the grant of a wayleave to one organisation does not preclude the grant to others. Each case thereafter could be considered on its relevant merits, including such factors as the level of intrusion to council properties.

7 Equalities impact assessment

7.1 An EIA for the Myatts Field North Regeneration was prepared in 2012 and updated in 2015 to include actual impacts and lessons learned with a further review being undertaken in November 2016, which updated the lessons learned.

7.2 The provision of improved high speed broadband on the estate would enhance equalities, for example for low-cost access to cultural and foreign language TV programming or for children to access high-speed internet for study purposes.

8 Community safety

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8.1 No direct impact

9 Organisational implications

9.1 Environmental BT Openreach have indicated that, subject to survey, there would be no impact on the built environment from the exterior. No other environmental impacts.

9.2 Staffing and accommodation No impact

9.3 Procurement The grant of any wayleaves such as contemplated above would represent the grant of a Concession giving the grantee an opportunity to exploit our assets and residents for their commercial gain.

The grant of Concessions is also covered by EU procurement rules, but Procurement have confirmed that this project was likely to fall below the limits for these.

9.4 Health No direct impact

10 Timetable for implementation

Action Party Target Date Waiver granted in favour of BT Openreach LBL June 2017 BT Openreach undertake survey and provide BT Openreach June/July 2017 method statement. Wayleaves negotiated and agreed LBL Legal/BT Openreach July/August 2017 Installation of fibre BT Openreach August/September 2017

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Audit Trail Consultation Lambeth directorate / Date Comments in Name/Position Date Sent department or partner Received paragraph: Councillor Jennifer Cabinet Member for Housing 24/07/17 25.07.17 Brathwaite Councillor Paul Gadsby Ward Councillor for Vassall 22/06/17 22/6/17 1.2, 2.1, 5.1 Councillor Jacqui Dyer Ward Councillor for Vassall 22/06/17 Councillor Annie Gallop Ward Councillor for Vassall 22/06/17 Strategic Director for Sue Foster 22/06/17 20.07.17 Neighbourhoods & Growth Paul Butler, Group Corporate Resources 05/06/17 13/06/17 3 Manager, Finance Michael O’Hora, Senior Contracts Lawyer, Legal Corporate Resources 05/06/17 09/06/17 4 Services Maria Burton, Democratic Corporate Resources 22/0617 28/6/17 Throughout Services Lynette Peters, Lead Neighbourhoods & Growth 23/5/17 31/5/17 Throughout Commissioner, Housing Malcolm DeVela, Category Procurement Manager – Corporate Resources 13/06/17 21/06/17 Throughout Energy and Corporate Corporate Resources Jackie Belton, Strategic Management Team – Category 27/6/17 27/6/17 3.2 Director Board

Report History Original discussion with Cabinet Member N/A Report deadline N/A Date final report sent N/A Part II Exempt from Disclosure/confidential No accompanying report? Key decision report No Date first appeared on forward plan N/A Key decision reasons N/A

Background information None

Appendices None

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APPROVAL BY CABINET MEMBER OR OFFICER IN ACCORDANCE WITH SCHEME OF DELEGATION

I confirm I have consulted Finance, Legal, Democratic Services and the Procurement Board and taken account of their advice and comments in completing the report for approval:

Signature: ______Date: ___7/07/17______

Post: Stephanie Hudson, PFI Client Manager

I approve the above recommendations:

Signature: ______Date: ______

Post: Sue Foster, Executive Director, Neighbourhoods & Growth

Any declarations of interest (or exemptions granted): n/a

Any conflicts of interest: n/a

Any dispensations: n/a

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