Br0kenTeleph0n3

Following the broadband money

DCMS faces legal threat over BDUK funding

with 11 comments

Richard Brown, COO of Wispa, a Welsh communications consultancy, has sent Jeremy Hunt’s department of culture media and sport a final letter of notice before legal action, which is a kind of gentle nudge before the lawyers’ fee-meter goes into hyperdrive.

Brown is mildly peeved, if that’s the right expression, for a number of reasons. Firstly, he wrote a book which explains in lucid detail how BDUK can get its job done for a fraction of the money it is paying KMPG to screw up the procurement of broadband in rural areas.

His ideas have been supported by none other than Peter Cochrane, the former BT CTO, who has attracted headlines because of his damning evidence to the House of Lord enquiry into broadband.

He is also ticked off because Ofcom has not had the courtesy to acknowledge receipt of his petition, signed by more than 600, calling for a ban on “up to” advertising of broadband speeds, which Brown claims, and Ofcom itself reports, are misleading.

Finally Brown is irked by the fact that BDUK’s procurement framework for rural next generation broadband access, which was meant to deliver at least six bidders for the taxpayers’ £530m, has delivered only two, BT and Fujitsu. In practice, it appears that the odds are stacked in BT’s favour, and Fujitsu has still to confirm its on-going commitment to the framework process.

So Brown has written to the DCMS, threatening legal action to stop BDUK under state aid rules from giving BT any money. Furthermore Brown is asking DCMS to refund him his share of the £530m, a sum he calculates as £8.98, whereupon he will cease his action.

DCMS no doubt would like to laugh this off as a publicity stunt, but there’s a sting in the tail. Brown is asking for all the records relating to the pilot rural broadband projects as well as minutes of all meetings between DCMS and BT. In some quarters, these documents will generate more interest than Lady Chatterley’s Lover when it was unbanned.

Normally, the courts might take the view that Brown’s action falls into the nuisance or vexatious camp, and chuck it out without a hearing.

Brown says, “The action is legitimate on the basis that it is effectively money that is not the government’s or the department’s, it is simply in the custody of the the DCMS. As it is a custodial amount they have a legal obligation to demonstrate that it is being used appropriately (should they be requested to do so). As I have requested on a number of occasions that they do that, and they have failed to answer, I can demonstrate that they have failed to act, and so the only courses remaining are to forget it, or take some form of legal action.
“The best case would be that they send a cheque for C£9 – then everyone can ask for their money back ;-)
“The legal direction suggests that even if they consider it to be nuisance/vexatious then it is their responsibility to respond regardless, prior to such action being referred to a court.”

DCMS has 28 days to respond.

This is the text of Brown’s letter to DCMS.

BDUK Funding of BT

As it has not been possible to find a resolution to this matter amicably and it is apparent that court action may be necessary, I write in compliance with the Practice Direction on Pre-Action Conduct.

Summary of explanation of pending action
That the Department for Culture Media and Sport (DCMS) is willingly pursuant of a course of action that is contrary to our interests as a UK company, and is detrimental to us as citizens. In following a route that will fund a private organisation (BT) to the amount of C£530m of public funds (funds that have been contributed to by the citizens of the UK, or will have to be recovered from those citizens via a process of taxation)

Summary of expectation in prevention of legal action
I respectfully request, for the final time, that the action of State Aid funding a private organisation cease.  This action is detrimental to the benefit of the UK citizens and is to be conducted without our express consent.  In ceasing the action it will then be possible for those who have the knowledge to best advise the DCMS on how to allocate the funding in a more appropriate manner.

Sum(s) to be claimed
The sum of £8.98 is claimed in advance of this action.  This has been calculated by the dividing the announced BDUK fund (£530m) by the 2001 census population (59m) and deriving the amount that a single individual will bear in new or paid taxation.  Should we receive this sum we will cease our legal considerations.

Listed below are the documents on which we intend to rely in our claim against you:

How the State Aid Rules impact upon funding for the delivery of public services including services of General Economic Interest (http://www.bis.gov.uk/files/file53292.pdf)
Treaty establishing the European Community Part three – Title VI – Chapter 1 – Section 2 – Article 87-92 [So-called Maastricht Treaty] (http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12002E087:EN:HTML)
Broadband Delivery UK – specifically Goals 1-4 (http://webarchive.nationalarchives.gov.uk/+/http://www.bis.gov.uk/bduk)
Broadband Delivery UK – Discussion forums – specifically statement from Hunt (http://discuss.bis.gov.uk/bduk/pilots/)

In accordance with Practice Direction on Pre-Action Conduct I would request that you provide me with copies of the following documents:

Outcome reports from Rural Market Testing Pilots (all)
Meeting minutes from Department with BT meetings (all)

I can confirm that we would be agreeable to mediation and would consider any other system of Alternative Dispute Resolution in order to avoid the need for this matter to be resolved by the courts and would invite you to put forward any proposals in this regard.

In closing I would draw your attention to section II (4) of the Practice Direction which gives the courts the power to impose sanctions on the parties if they fail to comply with the direction including failing to respond to this letter before claim. I look forward to hearing from you within the next 28 days, should I not receive a response to my letter within this time frame then I anticipate that court action may be commenced with no further reference to you.

Yours sincerely

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Written by Br0kenTeleph0n3

2012/05/10 at 21:36

11 Responses

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  1. The petition is unfortunately poorly worded for some reason:

    ‘I wish to gain your support for my participation in paying my ISP ‘upto’ the amount that they wish to charge me each month.’

    It suggests people should not pay the billed amount. It should have proposed a band of charges based on connection speed, throughput and usage and would have had even more support.

    Has anyone read and supported his proposals? Please provide a summary of how the funding would work.

    Are all our taxes a ‘custodial amount’? Much state aid funds private companies.

    Somerset

    2012/05/10 at 22:10

  2. Hmm interesting… I can see where he is going with the “up to”, however it is going to be difficult to put into practice as even if the pipe to the customer provides say 10 Mbps, there is no guarantee the resource a customer goes to will have that capacity available.

    This primarily why we quote “up to” , even though all customers are capable of the speed they sign up to (via individual queues), we have no control over what they connect with (inside their property) or what resource they use (some ISDN fed website in taiwan for example).

    Peak time contention is always a possible too (inside and outside our net).

    He has a worthy point about the BDUK framework though and it only highlights how BDUK were at one point going to just give all the money to BT without question until the protests stopped it.

    It is all a big scam, there isn’t a shred of competition , even if Fujitsu do some token rollout.

    I do wish they would get the “choice” stick out of their butts too. People should have choice.. yes.. who doesn’t agree. but with a single public fuinded infrastructure provider the choice is mainly billing name in the same way as gas/electric. Whatever the infrastructure provides in speed will be the limit for all “choices” on it.

    I am all for competition. If a commercial company can make a business case then go for it.. But lets stop feeding the lumbering Elephant with all its many parasites and encourage ISP’s to break free from “single source” infrastructure.

    bill lewis

    2012/05/11 at 08:05

    • “but with a single public fuinded infrastructure provider the choice is mainly billing name in the same way as gas/electric. Whatever the infrastructure provides in speed will be the limit for all “choices” on it.”

      Yes the infrastructure will impose an upper limit but look at the variety of packages available over the single Openreach infrastructure?

      It is comments like the posters, that mean so many millions decide to go with BT Retail broadband products, as they see comments like this.

      Andrew Ferguson

      2012/05/11 at 08:37

      • BT’s full year report said, “Broadband – We added 589,000 retail broadband customers in the year, representing 54% of the broadband market net additions of 1,085,000 and taking our retail broadband customer base to around 6.3m, up 10%.”
        Ofcom’s Communications Market Report, published in August 2011, said, “More than two-thirds (67%) of households have a fixed broadband connection and 17% have a mobile broadband (dongle) connection.” So that’s about 20 million homes BT addresses. Which puts BT’s broadband market share at around 32%.
        I suggest that, given the usual consumer inertia, fear, uncertainty and doubt, that is an absolute indictment of BT’s performance.

        Ian Grant

        2012/05/11 at 19:36

  3. Other than getting £8.98 back, I fail to see what the benefit might be?

    Will it mean people who stand to gain from the continuation of the Welsh RIBS scheme where some firms charge 40p under the grant cap to install a wireless service can continue their expensive installs for longer?

    Or perhpas it will mean a new wave of investment, that will drawf what the government has put on the table so far?

    Some may consider the BDUK process a child of satan, but stopping it now is hardly going to make things better for joe and jane average consumer/SME.

    Some suggest creating a new teleco for this 34% of the UK. Surely that just gives a new duo-oply, and the commercial operators will not just roll-over, prices for ADSL would drop to under cut, with their more commercial areas helping to fund a price war.

    Some communities are ignoring all the bluff and bluster and actually just ignoring BDUK and getting on and doing it themselves, which is at least a positive response.

    Andrew Ferguson

    2012/05/11 at 08:44

    • Andrew – spot on. JFDI. B4RN are doing it, B4RS intends to, and there are others. One possible positive outcome from the BDUK blustering would be a relaxation of the rules to allow allocation of the funds to other worthy contenders – not only the KPMG procurement process select few (now two). Getting on and “just doing it” is made more difficult with all the BDUK huff and puff, unfortunately. It doesn’t help with the distraction of “something for nothing” from the consumer perspective, when the “something” isn’t’ well defined especially for rural customers. We get more of the same service sauce in the future, with an underlying commercial model that is undeniably biased towards ROI in urban areas. Surely a change is good?

      thebizarch

      2012/05/11 at 10:28

    • I think your point is that you get what you pay for.
      So far BDUK has squandered lord know how much on KPMG consultants and cannot show us a single BDUK-funded broadband connection after… how long? Two years? Seldom has so much been spent on so little.
      Besides, as you imply, the BDUK money is going to make things marginally better for John and Jane Average Consumer, who live in urban areas. The BDUK loot was meant to go to the Final Third, mainly rural areas. How has that goal been perverted?
      As to the £100m for faster “smart cities” and the £150m for mobile broadband, it’s amazing how much Jeremy Hunt can find in the pot if he really looks. Wonder how much is there if he looks hard.

      Ian Grant

      2012/05/11 at 19:16

  4. Whilst I do have some sympathy with some of Mr. Brown’s points I don’t want to see the process delayed any further with legal action. North Yorkshire was announced as one of the pilots in October 2010 yet the procurement process is only due to finish in July 2012. With work starting at the earliest in the autumn it might be 2 years from then before I get faster broadband. That’s long enough already without any further delays. To be honest I don’t mind if BT or Fujitsu win the contract here as long as I get a significantly faster connection ASAP. As for the deeply rural areas of North Yorkshire some are already benefiting from wireless connections utilising the PSN as backhaul providing between 10-50 Mb/s symmetrical connection (with the potential of being upgraded in future). That’s not bad in my opinion.

    desouzr

    2012/05/11 at 18:47

    • It’s not bad at all. And it’s not being delivered by BT. As to timing, I suspect BT just wants to get the money and then control the delivery timing. ASAP is in its hands. That why more and more communities are so disappointed with the officials that they are doing it themselves.
      If BT reversed its policy of copying Virgin Media’s footprint and went where VM isn’t, it would have the market to itself, could charge relatively high prices, and consolidate its monopoly in two-thirds of the country. But hey, what do I know?

      Ian Grant

      2012/05/11 at 19:01

      • Maybe the numbers don’t work. With TalkTalk telling us how much the UK could save by switching to them and paying £6.50/month for broadband where is the money for investment?

        Somerset

        2012/05/13 at 18:13

  5. “Brown is asking for all the records relating to the pilot rural broadband projects as well as minutes of all meetings between DCMS and BT. In some quarters, these documents will generate more interest than Lady Chatterley’s Lover when it was unbanned.” – Ian I think your prophesy may well be fulfilled beyond your dreams. With Mr Hunt’s current little ‘local difficulty’ with the parliamentary Standards Office, perhaps his and the department’s meetings with BT WOULD be of significant and relevant interest?

    Mike Phillips

    2012/05/21 at 14:24


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