Broadband Connection Vouchers Scheme Guide for Suppliers - CVS_Supplierschemeguide20150305
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Broadband Connection Vouchers
Scheme Guide for Suppliers
Page 1 of 14 CVS_Supplierschemeguide20150305Table of Contents 1. Introduction ........................................................................................... 3 2. Where Does the Scheme Operate?......................................................... 3 3. What Does the Scheme Fund? . .............................................................. 3 4. What is a Compliant Quote? ……………………………………………… ................. 4 5. How Does the Scheme Work .................................................................. 5 6. Joint/Group Schemes ............................................................................. 5 7. Working with Cities and BDUK ............................................................... 6 8. Brand Guidance for Suppliers ................................................................. 6 9. Supplier Responsibilities……………………………………………………… ................ 7 10. Common Supplier Q&As ...................................................................... 7 11. Appendix 1 (Process Diagram)…………………………………………….. 10 12. Appendix 2 (Eligible Costs)………………………………………………….. 11 Page 2 of 14 CVS_Supplierschemeguide20150305
1. Introduction
The purpose of this document is to provide Suppliers with a short guide to the Broadband
Connection Vouchers Scheme. The document aims to provide a simple overview of how the
scheme operates from a Supplier’s point of view. It is not intended to describe all supplier
obligations associated with the scheme – these are set out in the Supplier Registration
Document which all suppliers are required to sign prior to registration.
2. Where Does the Scheme Operate?
Currently, the scheme operates within eligible postcodes in the following 22 cities (originally part
of the SuperConnected Cities Programme):
Aberdeen, Birmingham, Brighton, Belfast, Edinburgh, Manchester, Salford, Coventry, Derry,
Perth, Coventry, Oxford, Cambridge, Newcastle, Newport, Bradford/Leeds, Bristol, Cardiff,
London, Derby, York
The following additional cities are expected to join the scheme from 1st April 2015:
Bournemouth Inverness Nottingham Southend on Sea
Chelmsford Ipswich Peterborough Stirling
Dundee Leicester Plymouth Stoke on Trent
Exeter Liverpool Preston Sunderland
Glasgow Middlesbrough Reading Swansea
Gloucester Milton Keynes Sheffield Swindon
Hull Norwich Southampton Wolverhampton
The full list of eligible postcodes for the scheme is available to suppliers at
https://www.connectionvouchers.co.uk/csv/Postcodes.csv. There is also an eligibility
postcode checker on the Connection Vouchers website at www.connectionvouchers.co.uk.
These postcodes are kept up to date by BDUK.
3. What Does the Scheme Fund?
The scheme provides grants to fund (or part-fund) the installation costs of new broadband
connections for SMEs. The minimum value of the grant is £100 and the maximum value of the
grant is £3,000 per SME. The grant does not cover VAT or revenue charges. The grant covers
genuinely incurred Eligible Costs which results in the delivery of Step Change for SMEs. Please
see later in this document for definition of both terms.
The scheme uses the European Commission’s definition of a SME. In simple terms the rules are
that to be eligible the applicant must be a trading entity. So a Sole Trader is eligible and so are
not-for-profit organisations and charities so long as they meet the SME definitions. People who
are employees are not. The applicant must:
Page 3 of 14 CVS_Supplierschemeguide201503051. employ fewer than 250 people or volunteers
2. have a turnover of less than €50 (around £41m) and/or have a balance sheet of less
than €43M (around £35.5M)
3. have received less than €200k in public grants in the last 3 years (the “de-minimis” limit)
The SME must also not have had a Voucher already.
4. What is a compliant quote?
In order to be compliant with the Scheme’s conditions, quotes to SMEs must meet three basic
conditions:
• The SME must be eligible to receive a voucher
• The costs for which a voucher contribution is sought must be genuinely incurred Eligible
Costs. A complete definition of Eligible Costs is contained within Appendix 2 of the
Supplier Registration document and is also contained within Appendix 2 of this
document.
• The new connection must deliver a Step Change in connection speed to the SME. Step
Change is defined as follows:
● For new Next-Generation Access (NGA) Connections, the connection must provide a
minimum of 30Mbps to the SME’s premises. If the existing NGA-based broadband
service is 30Mbps or greater, then the upgraded NGA-based broadband service must
deliver at least a doubling of speeds compared to the service currently used. So for
example if the current connection delivers 30Mbps, then the new connection must
deliver at least 60Mbps.
● If the SME has chosen a business grade connection as their new service, it must have
both of the following characteristics:
o offer a minimum of 20Mbps services to their premises now and be capable of being
configured/upgraded in the future to support at least 30Mbps services to their
premises; and
o deliver at least a doubling of speeds when compared to their current business grade
connection. If the SME is transferring from NGA to business grade, the requirement
for a doubling of speed does not apply.
Business Grade connections are those that are provided on a dedicated/uncontended
basis to customers and are supported with service level guarantees. We recognise that
these services can be provided in the form of leased lines (including Ethernet services) or
point-to-point microwave links but we do not specify a particular type of service.
Page 4 of 14 CVS_Supplierschemeguide201503055. How Does the Scheme Work?
There are two ways by which SMEs can benefit from voucher grants under the Scheme:
● SME Applications: applications from SMEs to their local cities, including a quote from a
registered supplier
● Pre-Registered Packages: Sales made to SMEs by registered suppliers with Preregistered
packages
SME Applications – Process Overview
● A business (SME) gets a quote from a registered supplier
● The SME completes a simple standard application form which is sent to the city
● The city checks that the SME is eligible and that the connection that they have applied for
meets the Scheme rules
● The applicant is sent a Broadband Connection Voucher
● The applicant confirms the order with the supplier, gets connected and lets the city know ●
The city pays the supplier
Please refer to the process flow chart in Appendix 1 to show the end to end process for
applications.
Pre-Registered Packages– Process Overview
● Supplier make a pre-registered package request to BDUK (one-off exercise per package)
● BDUK reviews package request and package is registered, with agreed eligible costs and
voucher contribution per deployment
● Supplier contract with SMEs for the relevant package, after conducting scheme compliance
checks
● Supplier reports weekly package sales to BDUK
● City conducts local audit checks and pays supplier for all packages where services are
connected
Further documentation is available which describes the pre-registered package process in
more detail.
Please note that, in both cases above, payments to suppliers are made by Cities, not BDUK.
6. Joint/Group Schemes
As well applying for a voucher as an individual business, groups of businesses can pool the value
of their vouchers to arrange a joint or group solution. Often this can help overcome some
significant barriers to better connectivity:
- Encouraging suppliers to solve connection problems for businesses that otherwise
would be uneconomic on a 1:1 basis
Page 5 of 14 CVS_Supplierschemeguide20150305- Reducing the ongoing monthly cost through “group buying” solutions.
This approach also works well for multi-occupancy buildings where the landlord can arrange for
the solution to be installed in order to meet the needs of the landlord’s tenants. Often this is
the case in “incubator” office space where SMEs have flexible leases with their landlord - the
key thing is that the contract with the registered supplier supported by vouchers must be at
least 6 months in duration.
The rules are exactly the same with regards to eligible costs, eligible SMEs and the step-change
requirements. The process is simply replicated and the quote from the selected supplier is
shared and apportioned between the qualifying SMEs
There is one process step which is different; all group schemes with an aggregate value greater
than £20k need to be agreed by BDUK in advance. In group schemes, it is important to confirm
that the SME consents to their voucher contributing towards a group scheme.
7. Working with Cities & BDUK
BDUK has encouraged cities to work with the Scheme’s registered suppliers in order to maximise
the benefits in their areas. Cities are encouraged to provide registered suppliers with useful
information about the opportunities for the Scheme in their area; most will do so by email.
Cities will also use a range of channels to promote the scheme based on local priorities and
opportunities. Suppliers should be alert to these opportunities.
Cities administer the Scheme on behalf of BDUK. They assess SME applications and make
payments to suppliers. For each city, BDUK will make available a finance and operations contact
point. These contacts will be shared through the password protected area of the Connection
Vouchers Website; you were sent a password for this area of the public site when you
registered: https://www.connectionvouchers.co.uk/registered-suppliers/
8. Brand Guidance for Suppliers
The SuperConnected Cities programme ends on 31 March 2015 and the branding associated
with it will be retired. BDUK will make guidance available for suppliers about the use of the
revised Scheme branding assets (to be used from April 2015) through the password protected
area of the Connection Vouchers website:
https://www.connectionvouchers.co.uk/registeredhttps://www.connectionvouchers.co.uk/regis
tered-suppliers/suppliers/ .
Suppliers should note that a breach of this guidance may be considered as malpractice under the
terms of the Scheme and may result in de-registration from the Scheme.
Page 6 of 14 CVS_Supplierschemeguide201503059. Supplier Responsibilities
Formally, supplier responsibilities and obligations are set out in the Supplier Registration
Document. A number of these are highlighted below:
• Suppliers are responsible for ensuring that their quotes and invoices (for which voucher
grants are sought) relate to Eligible Costs only. If this is subsequently identified not to be
the case, suppliers will need to repay any voucher funding received.
• Suppliers should ensure that all deployed solutions deliver the required Step Change for
each SME contributing a voucher. If Step Change is not achieved, voucher funding will
not be paid. As a reminder, for group schemes, the Step Change rule must be met for
each SME participating in the project.
• Suppliers of pre-registered packages have a range of additional responsibilities to ensure
that only eligible SME’s receive packages supported by the scheme. These are set out
within the separate T&Cs document for pre-registered packages.
10. Common Supplier Q&As
Q 1- Do vouchers expire once issued?
A – Yes. The SME has 28 days from their offer of a voucher to place an order with their
nominated supplier.
Q 2- How long do Suppliers have to install the connection?
A – Connections must be installed within 9 months of the SME placing the order with a supplier.
If installation dates exceed this 9 month limit, voucher funding may not be paid by BDUK.
Q3 – What audit and value for money controls are in place for the Scheme?
A – There are a range of controls in place, implemented by each participating city and by BDUK,
to ensure ongoing compliance to the scheme’s rules. These include (but are not restricted to):
• Monthly audits of supplier quotes
• Monthly audits of supplier invoices
• Telephone sampling of SME applicants to confirm the nature of services delivered by
suppliers
• Site visits to a sample of SMEs to ensure services are consistent with supplier
quotes/invoices and verify installed equipment
In addition to the above, mechanisms exist for specific investigations into supplier behaviour or
quotes/invoices on the basis of information received from Cities, SME’s or other suppliers.
Page 7 of 14 CVS_Supplierschemeguide20150305Q4 – Can vouchers be used to fund revenue charges?
A – Revenue charges are ineligible for voucher funding under any circumstances. Vouchers can
only be used to fund genuinely incurred eligible costs. However some suppliers, as part of
normal commercial practice, amortise installation charges over the term of the contract. In this
specific scenario, under the voucher scheme it is legitimate for these charges to be decoupled
from the monthly charges and presented as a one-off capital charge to be funded (or part
funded) by vouchers – provided the costs are genuinely incurred and eligible. The net effect of
this is therefore a reduction in monthly charges to the SME in these cases – equivalent to the
voucher contribution. However, it is important to note that the voucher is not funding revenue
charges.
Q5 – Does the scheme support Ethernet in the First Mile (EFM) technology?
A – The scheme is technology agnostic and supports a range of qualifying technologies (more
details are in the supplier registration document). The key determinant is that the technology
must provide a Step Change for the SME. If EFM is used to deliver a business grade service, it
must therefore meet the Step Change requirement for business grade services (i.e. delivery of
20Mbps from the outset and capable of 30Mbps). Only EFM deployments which meet this
requirements are eligible.
Q6 – Does the scheme support historic deployment costs?
A – One of the overarching principals of the scheme is that it is designed to “nudge” commercial
deployment into SME locations that would otherwise remain unserved. In this scenario,
vouchers can fund historic costs provided all of the following conditions are met:
o The capital costs have been demonstrably incurred by Registered Suppliers and
represent only Eligible Costs
o The capital costs have been incurred by Suppliers in anticipation of (but not
dependent upon) winning the business of eligible SMEs and therefore being able to
redeem these costs through the use of their connection voucher.
o These capital costs have been invested at full commercial risk since the
commencement of the Scheme (7 December 2013)
o The capital costs have not already been funded by SMEs
Q7 – Does the scheme contain any “target” or “benchmark” voucher contributions?
A – Currently, the scheme applies a benchmark contribution to “high-end” FTTC deployments
(e.g. where a supplier deploys a higher grade of CPE as part of an FTTC implementation to
deliver a higher standard of service.) The standard maximum voucher contribution to this type
of high-end FTTC deployments is £800. Cities will not to routinely approve FTTC-based quotes
which seek a voucher contribution in excess of this benchmark number. If suppliers believe
that their FTTC deployments contain legitimately incurred eligible costs in excess of this
benchmark value then, in order for these to be approved by cities, suppliers will be required to
provide evidence of all of the following:
Page 8 of 14 CVS_Supplierschemeguide20150305• That the solution (and associated eligible costs) reflects the specific business
requirements of the SME
• Invoices detailing the specific cost components associated with the installation,
including wholesale inputs detailing connectivity charges.
• Evidence of similar deployments (and associated charges) that they have undertaken
on a commercial basis i.e. in the absence of a voucher grant
Q8 – Can a SME receive more than one voucher?
A – Eligible SMEs may use the voucher to get more than one eligible property from which they
operate connected but only up to £3,000 of costs. For example, an estate agent with 4 outlets
in a city could connect all of them through a contract with single supplier, but if the total cost
exceeded £3,000 they would need to fund the difference. This would also apply if an SME had a
number of different businesses, at different address, across the city. However, the Scheme
doesn’t support “inter-site connectivity” – so, if the estate agent wanted to put in place a
dedicated link between the offices, that couldn’t be funded under the terms of the Scheme.
Q9– Can any supplier be accepted as a Registered Supplier?
A – In order to avoid large numbers of inactive suppliers on the scheme, supplier registration
will be carefully managed by BDUK so that only new suppliers who are likely to be active will be
registered. Any supplier who wishes to register for the scheme will be requested to provide
evidence of likely activity. The primary evidence will be a quote provided to an eligible
customer. Secondary evidence will include information about the existing customer base,
nature of broadband products sold, and the likely number of conversions for eligible SMEs. This
may also include an articulation of the supplier’s future marketing plan for vouchers and level of
ambition for future number of voucher connections delivered under the Scheme.
Q10– How do I apply for a Pre-Registered Package?
A – Any supplier who wishes to be considered for pre-registration of packages will be required
to demonstrate a significant number or all of the following to BDUK:
1. A strong historic track record of delivering connections supported by vouchers, either at a
city, regional, or national level
2. Evidence of strong SME demand for the relevant proposition supported by vouchers
3. An active awareness and marketing campaign which actively promotes the voucher scheme
and their particular voucher-supported proposition, to existing and new customers
4. Summary details of the solution intended to be presented as a package and the incremental
impact that this is expected to have on the baseline of voucher numbers taken by the
particular supplier
5. Support from the local city(s) for their application for a pre-registered package
The above does not impact the previous guidance around group schemes - all suppliers are
offered the opportunity for these projects to be pre-registered as a group package if there is
Page 9 of 14 CVS_Supplierschemeguide20150305greater than £20k of overall voucher contribution. Pre-registered package suppliers will be
required to sign a supplementary set of Terms and Conditions which set out their additional
obligations.
Page 10 of 14 CVS_Supplierschemeguide20150305Appendix 1 - Process Diagram Page 11 of 14 CVS_Supplierschemeguide20150305
Appendix 2 – Eligible Costs
[Extract from Supplier Registration Document]
The likely eligible incremental costs of providing the access connection are described in this
document. Broadly, the lines of demarcation in the network that qualify for subsidy are:
● Network side: The downstream port from the nearest active switching/routing device to
a customer’s Network Terminating Equipment (NTE); and
● Customer side: the customer-side ports (or wireless antenna) of the Network
Termination Equipment (NTE) to which a Network Communicating Equipment (NCE) is
connected.
Passive and powered splitters/combiners, amplifiers, repeaters and regenerators which do not
provide a switching/routing function that are within these lines of demarcation qualify for subsidy,
as do other intermediate items that are required to provide the requisite service, as described
below.
Customer Premises Equipment (CPE) or NTE devices which provide a general computing function
beyond supporting a network data service do not qualify for subsidy, including most NCE devices,
telephones, tablets, laptops and PCs. By contrast CPE or NTE devices specific to the solution
specified by the SME that only provide a networking function, including, modems, (wireless) routers,
Wireless Access Points (WAPs), 4G dongles, and internal 4G modules for laptops do qualify. While
the precise categories of permitted expenditure will be dependent on the solution offered to the
SME the following categories of eligible expenditure are intended to provide suppliers with an
indication of the likely qualifying items.
Qualifying costs
Qualifying Network connection costs (for all types of connection)
● planning, survey, acquisition, site preparation, installation, and commissioning fees;
● provision of building entry points and (including breaking/drilling charges for entry
through external and internal walls), trunking and tray work (within end-user’s curtilage)
and fibre cable and jointing;
● necessary supporting structures including poles and other mountings, brackets, fixings,
and associated civil works (including craneage);
● power supplies equipment to support network electronics and optics, including power
company connection costs, but excluding any CPE power supplies beyond an existing
240V AC socket;
● copper and fibre optic cables, sheaths, connectors, joints, splitters and enclosures,
coaxial lines, copper waveguide, microwave feeders, jumpers, connectors, antenna
radomes and enclosures, lighting protection devices, and electrical earthing systems;
● in-building wiring on the network side of the CPE necessary to support the connection of
the customer in multi-tenanted blocks (e.g. in-building installation of fibre, cat5e, or RG6
coax cable);
Page 12 of 14 CVS_Supplierschemeguide20150305● costs related to the purchase of wayleaves or other easement rights1; and
● adapters/converters to ensure that all the pre-existing communications functionality is
effectively maintained (e.g. adapters/converters for analogue telephones, dialup
modems, alarm diallers or other devices that may contain embedded modems such as
medical alarms).
Qualifying Network connection costs (for fixed NGA only)
● provision of new footway and carriage boxes, poles and duct infrastructure; and
● CPE (e.g. Optical Network Terminal (ONT) or fibre modem), backup battery, patch panel
and residential gateway and associated intermediate power and fibre communications
cables).2
Qualifying Network connection costs (for wireless NGA only)
● provision of building location points (including all associated mounting costs);
● Radio Frequency (RF) connectors, splitters, combiners, duplexors, diplexors, filters,
antennas, radomes and enclosures;
● External and in-building wireless repeaters if necessary for coverage; and ● fixed
wireless CPE costs.
Business connectivity (leased lines) connection costs (for fixed connections only)
● provision of new footway and carriage boxes, poles and duct infrastructure;
● costs related to the purchase of way leaves or other easement rights; and
● CPE (e.g. Optical Network Terminal (ONT) or fibre modem), backup battery, patch panel
and residential gateway and associated intermediate power and fibre communications
cables).
Business connectivity (leased lines) connection costs (for wireless connections only)
● provision of building location points (including all associated mounting costs); and ●
wireless CPE costs.
Excluded costs
The connection voucher cannot be used to cover
● SME connections to basic broadband technologies3;
● additional charges for expedited connection e.g. time related charges (TRCs);
1 Way leave and easement rights being payments made to private land owners for the legal right to access that land in order to install and
maintain communications cabling and piping.
2 For example, see Openreach charges for connection at:
http://www.openreach.co.uk/orpg/home/updates/briefings/generalbriefings/generalbriefingsarticles/gen01713.do
3 Several different technology platforms can be considered as basic broadband networks including asymmetric digital subscriber lines (up to
ADSL2+ networks), non-enhanced cable (e.g. DOCSIS 2.0), mobile networks of third generation (UMTS) and satellite systems.
Page 13 of 14 CVS_Supplierschemeguide20150305● cancellation fees for any pre-existing connection;
● cabling on the customer side of the CPE to support connection (e.g. in-premise
installation of fibre, cat5e or RG6 coax cable);
● historic capital costs associated with network deployment are excluded unless they meet
all of the following criteria:
a. The capital costs have been demonstrably incurred by Registered Suppliers and
represent only Eligible Costs
b. The capital costs have been incurred by Suppliers in anticipation of (but not
dependent upon) winning the business of eligible SMEs and therefore being able to
redeem these costs through the use of their connection voucher.
c. These capital costs have been invested at full commercial risk since the
commencement of the Scheme (7 December 2013)
d. The capital costs have not already been funded by SMEs
● any of the network elements that may require upgrading to support the final connection
e.g. ‘middle’ mile/trunk, and core upgrades that are required to support the final
connection; and
● operational expenditures and overheads (Opex), save for those that are direct
incremental and one-off costs associated with the installation of the new high-speed /
high-grade connection.
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