Br0kenTeleph0n3

Following the broadband money

Government nixes publication of Final 10% boundary details

with 40 comments

Communications minister Ed Vaizey: right place, right time

Communications minister Ed Vaizey: can’t say where the Final 10% is

The government is refusing to disclose the speed and coverage details of BT’s next generation broadband roll-outs in rural areas, preventing community network operators from finding ways to provide services where BT will not build.

This is disclosed in a letter from communications minister Ed Vaizey to next generation broadband lobbyist INCA CEO Malcolm Corbett. Vaizey said these details are regarded as “supplier confidential information”.

Br0kenTeleph0n3 understands that DCMS has sought and received legal opinion on the matter. It has asked DCMS in a Freedom of Information Act request to confirm this and to say what advice was given. DCMS has until 2 July to respond.

Normally reliable sources indicate that the advice was that the public interest now outweighs the supplier’s commercial interests, and that therefore the government can publish the contracted speed and coverage templates (SCTs). Knowing the precise “no build” areas will enable others to fill in the gaps. BT is currently the only supplier to win supplier contracts under the BDUK procurement framework.

“I cannot understand how (keeping the SCTs secret) can possibly be in the public interest,” Corbett said.

Corbett wrote to culture secretary Maria Miller earlier to express concerns over the commercial confidentiality over the SCTs. He said this secrecy endangered independent privately-funded projects because they could face being overbuilt by state-funded BT.

A further concern was that new guidance issued by BDUK gives BT an effective veto over community-led RCBF projects. The guidelines allow BT to do an impact assessment of Final 10% bids on its roll-out before councils can award a bid.

In his reply Vaizey says, “Any project has the opportunity to disclose their plans during the mandatory public consultation held prior to all state aid decisions. Publicly-funded projects are prevented by the state aid rules from overbuilding other projects which have been notified at that point.”

Corbett says this is correct but points out that the reviews took place several years in advance of the final deployment. “It is reasonable to expect operators’ plans to change. BT’s plans certainly will change. BT’s changes are apparently entirely acceptable. Independent operators’ plans will be ignored.”

BT’s speed and coverage plans for BDUK work are “subject to survey”. Further, it appears that even final contracts may be renegotiated.

INCA members have used the Freedom of Information Act to ask a number of local councils for the SCTs. “They are refused,” says Corbett. “Effectively it means that the locations that BT is being paid by the taxpayer to deliver to, along with those that are out of scope, are confidential.”

According to the BDUK guidelines on RCBF bids, where the bid overlaps BT’s coverage area a lot, the local council can ask BT to include the rest in its roll-out. Where the bid only partially overlaps, the council can renegotiate BT’s contract. Changes to the value of the contract with BT will depend on the “materiality” of the changes. (See below for more on materiality.)

Where there is little or no overlap, the council must issue a new tender in which BT is allowed to compete. BT will know precisely where its competitors plan to build and how much it is likely to cost; the bidders will have no such insight into BT’s coverage or its likely costs to extend its roll-out.

BT can use marginal costing to price what is effectively an extension to its existing network, but other bidders will have to bid a fully-costed price. BT holds another ace; the cost, terms and conditions of using its ducts and poles drove Geo and all other invited bidders out of the BDUK procurement framework. If they couldn’t make the sums work, it is unlikely community network operators will be able to.

A further obstacle for RCBF bidders is that they must fund the entire build upfront. They can then apply for a maximum of 50% of their costs to be met from the RCBF fund. BT on the other hand, can negotiate for ‘progress payments’ to help its cash flow.

Further, BDUK estimates that state aid intensities for local broadband projects will vary from 53% to 89%, with an average of 71% across the country, and it may go higher for ‘hard to reach’ places like the Final 10%. So BT has to find less than 50% of the project cost whereas its would-be competitors have to find 100% and claim back half.

Corbett says Vaizey has asked for a list of potential projects and to meet potential investors. “I would be happy to help arrange such a meeting but I can’t see why anyone would invest under these circumstances,” Corbett says.

Vaizey could also ask his colleagues at Defra and BDUK who have received more than 80 RCBF applications. Of these 52 have been asked for more details, and four have been approved for funding. The first approved, at Rothbury in Northumberland, will see BT scoop £460,000 of RCBF money.

Corbett believes the government’s position would be more credible if it were to declare where the Final 10% areas are, based on information it already has, and to encourage more private and community investment by guaranteeing there will be no overbuild funded by the main programme.

“This will have two significant effects: it will signal that the government is serious about competition and investment to help address the Final 10%; secondly it will help allay the very serious concerns about how to obtain value for money, at least in those areas, if not the main programme.”

The National Audit Office is expected to release a highly critical report on the value for money that the BDUK process will achieve. The Public Accounts Committee is rumoured to be lining up BT CEO Ian Livingston and BDUK CEO Rob Sullivan to answer questions arising from the NAO’s report.

Materiality

RCBF projects can only be integrated into an existing Call Off Contract under change control if the change does not constitute a material change under procurement law (otherwise a new procurement will be required).

Local Bodies will need to form their own view as to whether the proposed change to the Call Off Contract would be considered to be material under procurement law. The current materiality test is set out below. BDUK will be issuing further guidance concerning the application of the materiality test in the near future.

Under current procurement law the test of materiality involves an assessment of the following non-cumulative factors (known as the Pressetext test):

Does the change demonstrate an intention to re-negotiate the essential terms of the contract (risk allocation, price etc)?

Has there been a change that could have affected the tender outcome or affected a bidder’s approach to their tender submission?

Has there been a change that could have altered who decided to respond to the original call for competition?

Will there be a shift in the economic balance of the contract in favour of the contractor?

Will the change increase the scope of the contract “considerably”?

Was the change provided for or contemplated under the original contract?

Local Authorities should note that the Materiality test applies to all additional funding added to an original county project on a cumulative basis, therefore any other additional funding that has already been added to an original procurement should be taken into account when undertaking the Materiality test.

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Written by Br0kenTeleph0n3

2013/06/15 at 15:56

40 Responses

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  1. You really couldn’t make it up. Do they want a Digital Britain or Not?

    chrisconder

    2013/06/15 at 16:19

  2. Well, Ian – one can only hope that the NAO investigation will not be ‘side-lined’ like the HoL report and that in that this question reaches prominence. I do not believe that any serious mis-handling of taxpayers’ money and/or the whole broadband improvement undertaking will easily be forgotten come election time which is not that far away and well within the timescale of the BDUK scheme. So far it would seem that in any other world, this whole thing would have triggered a referral to the Monopolies and Mergers Commission.

    mike phillips

    2013/06/15 at 16:22

  3. This has been so predictable, it’s almost not news. I personally asked Maria Miller at the Country Land Owners Association Broadband meeting earlier in the year, to comment on the BDUK supported NDAs hiding the SCTs. Not a hint of a response, despite chasing via our local MP Greg Clark. I suspect the temperature of the water will only increase around DCMS until someone there realises the boil needs lancing and a new approach with full disclosure of SCTs is introduced.

    It’s our money, and very much in the public interest to do so.

    Yes, awkward bum shuffling and apologies to BT regarding broken contractual promises to keep things secret will all have to happen. When you do something wrong, and need to fix it, saying sorry and getting on with it is usually the best way forward.

    RobL

    2013/06/15 at 16:31

    • Maria could publish the SCTs and plead public interest. Let BT sue. For £20m I doubt it would. But to preserve its monopoly… At least the case would make that plain.

      Br0kenTeleph0n3

      2013/06/15 at 18:30

      • Its been obvious from the start that BT will do anything it can to preserve its monopoly. It doesn’t need the funding, but its determined nobody else will get it and show them up for what they are. An obsolete telco protecting its investment in a victorian phone network. A network that was a golden goose for many years, but has ceased laying golden eggs and is being forced to deliver what it can’t. It can’t deliver a digital britain when it is relying on copper. Satellites and bonded copper lines and expensive mobile is not the way to go. A third of the country is being pushed over a digital divide that will never close until government supports the innovators, the altnets.

        chrisconder

        2013/06/15 at 18:47

      • So the largest fibre network in the UK and FTTC available to 15 million properties does not sound like obsolete. A third, more like 90% surely?

        Is the BT network relying on copper, do you know that fibre interconnects businesses and exchanges across the UK and beyond? And it’s the service we buy, not the technology.

        Somerset

        2013/06/15 at 20:52

      • Correction – not 90%, 10% or less.

        Somerset

        2013/06/17 at 08:21

  4. […] so, she could ask the European Commission’s DG Competition to take an urgent look at the BDUK guidance to local authorities on how to deal with RCBF bids. She could confidently expect a verdict that finds the guidelines […]

  5. Right then. I have reasonably accurate figures now and several tentative ballpark proposals for solutions for our area. Just 240 homes of which in our survey about two thirds stated that broadband was “a serious problem for them”.

    We know that Hampshire CC is not going to roll out FTTP. Well actually, we don’t know that but I think it’s a safe assumption. The village has average speeds of about 2.5Meg (real world sync rates, not from BTW’s rather optimistic estimates) so may be ignored completely (left as part of the 10%) despite the fact that not everyone can get 2Meg anyway, line quality (or lack thereof, the network is ancient) rather than length is the main issue.

    The project is supposed to deliver 2Meg broadband to “everyone” (which would require about a 3Meg sync rate on ADSL, I guess) but I have a nagging feeling that “everyone” is at a high-level (“the area”, with a 2.5Meg average sync rate) and that this aim will not be delivered.

    If Hampshire CC presses ahead and gives BT the money to enable one or both cabinets in our village then an indeterminate number of residents may be able to get acceptable speeds, with a small number getting really fast speeds (those next to the cabs and those with short good quality copper lines) and this will leave us with a project to upgrade the broadband for another indeterminate number of residents, FTTC is not a good solution for the topography of this area but Hampshire CC appear to have been forced to make a choice of one.

    The commercial case for the area is weak to non-existent (just too small an area) so we’ll need to community fund any proposed genuine solution. We knew this anyway. The situation we have now means that there’s no way of calculating ROI on any proposed solution because it may be usurped for some with what BT might deploy.

    Now I suppose we have a decision to make on whether to spend the money and create a potential sort of “beige” elephant network or not.

    Mark

    2013/06/18 at 07:57

  6. Mark – I’m sure you are aware, but it is my understanding that even if both cabinets are ‘enabled’, the resulting sync speeds for the non ‘Infinity’ customers will not change – their b/band will still be the same (though perhaps contention will improve)? A fibre cabinet is not a mini ‘exchange’ in as much as the source of broadband is NOT moved closer to the customers UNLESS they can or do take an Infinity-type service. Thus, as I see it, to ‘feed’ the ‘outliers’ you, or Hampshire CC, will need to provide either extra cabinets fed by decent copper trunks OR a fixed wireless network or even satellite. If you are thinking of your own fibre supply you are talking lots of money. You need, I think, to wait and see how Hampshire are going to address the ‘sub 2mb’ connections first and that takes us full circle!.

    Without knowing the geography/cabinet locations it is difficult to be accurate, but it needs bearing in mind.

    Happy to be corrected on this by the experts!

    mike phillips

    2013/06/18 at 08:16

    • Hi Mike,

      Yes, the goal is to have a network *capable of delivering* what we’re calling “superfast broadband” (at the moment 30Meg but my view is that will date very quickly) to everyone which is also extensible and upgradeable at a viable cost.

      91% of the village has an internet connection (I nearly said “broadband”) though not all fixed network, some use 3G (significantly faster than even the fastest ADSL lines).

      Of course some may not upgrade or be interested and remain on their half meg ADSL or whatever it is they have (sync speeds are semi-random through the village, line length is not the predominant factor e.g. very near neighbours with near identical line lengths see wildly varying sync rates in some cases, the noise on the lines appears to be the main culprit).

      In this respect those excluded are not necessarily “outliers”, for instance we’re quite centrally located in the village and have a shorter line than many (both D and E sides), but it is useless (3600m long with IP profile of 1750kbps), the “dodgy lines” are semi-randomly distributed.

      This may or may not be thanks to some 1980s developments in the village resulting in a batch of aluminium pairs and some mixed copper diamaters, we shall perhaps never know – so although I know where the cabinets are, and I know, for instance, our D-side is about 1180m long and you can calculate others with near 100% certainty and then check your estimate against BT’s data, attempting to project the speed VDSL2 would run at on it is probably almost pointless without knowledge of the metal and the diameter in each case since it has a huge bearing. From what I see, aluminium will only deliver about 40% to 50% the speed of the same length copper. ADSL sync rates average, from the data I have, about 55% of the theoretical sync rate for the line length.

      As far as contention goes, those using Zen and AAISP (yes I think we have one IIRC!) see near the full profile speed all the time and those using BT and Plusnet (most popular) fare less well so a user might be able to go from say 1.5Meg to 1.8Meg throughput by changing from Plusnet to Zen but the profile speeds are so slow anyway it makes little difference as it stands currently.

      Mark

      Mark

      2013/06/18 at 09:01

      • Home wiring can make a big difference.

        Somerset

        2013/06/18 at 09:08

      • This is going to be a problem all over the country Mark. By enabling cabinets for a few to go faster the incumbent protects its asset for another decade and ignores the ones on long or old lines. Their solution to them will be bonding lines to deliver the 2Mbit. Therefore people will have to pay for two lines, and bt will lay new copper lines to replace dacs. Its an absolute scandal to waste public money in this way, as the whole job will be to do again. The funding should go to companies who will do the job properly, in a futureproof way. If half the village is fine for the moment on a souped up cabinet it removes the customer base for an altnet to provide an NGA solution. Talk about a stitch up… vital vision.

        chrisconder

        2013/06/18 at 10:46

      • Potentially – here, we have a “star configuration” (I believe that’s what it’s called) and silver coloured pairs in the dropwire that got used (the other dropwire has copper coloured wire). ADSL only ever did work on one of the two master sockets, the one with the longest run. It is possible that had BT bothered to get rid of the old GPO tat and install it cleanly we might not have upgraded to 3G and the line may have seen some use in the last five years – we and others wouldn’t even have discovered that faster options are open to us. But then it’s principally a telephone company installing a telephone line. “It’s fine for voice”. Actually, it wasn’t – it was very quiet. But I digress.

        It is quite conceivable that other properties have a similar arrangement, with ADSL working off one of several master sockets. I haven’t been to every home.

        The intention is to move toward “self installs” which continues this problem, albeit, very much worse with VDSL. So home wiring is a serious concern along with the wiring more generally. There is no speed promise or proposition, there is simply a technology based proposition the efficacy of which cannot be known until it has been deployed and paid for. A good deal for BT – no obligation to deliver anything in particular. Had the process been competitive, then bids could have been on the basis of delivery and were BT confident about their network quality they would have no hesitation in guaranteeing speeds at all via, for instance, line bonding free to the customer to drag the speeds up or aluminium to copper (or, shock horror, fibre) replacement,.

        Mark

        2013/06/18 at 11:22

      • Any estimates on how much funding would be needed to ‘do it properly’, assuming this is FTTP. This is important to move the discussions forward.

        ps. FTTC being available to 15M is not a ‘few’.

        Somerset

        2013/06/18 at 12:18

      • Do I buy FTTC? No. I buy access to a network. I want it to be reliable, resilient, to operate predictably, and to meet my expectations with respect to what I want to send and receive via the network. How the network operator dies, I don’t want to have to care about. If I need to become aware of it, the operator has failed.

        Br0kenTeleph0n3

        2013/06/18 at 19:40

      • Correct, it’s the service, not how it’s provided. Meanwhile,., 15M is not a few!

        Somerset

        2013/06/18 at 21:45

      • That is 15 million “homes passed” that in theory can subscribe to an Infinity service. Of those, how many are activated today, and how many more could be activated within 24 hours?

        Br0kenTeleph0n3

        2013/06/19 at 07:39

      • I do indeed have estimates, yes, given in some confidence which I won’t repeat in detail.

        I cannot compare the costs with FTTC because I do not know what they would be.

        Suffice it to say that Wi-Fi would *probably* be a bit more expensive if done properly, FTTP much more expensive, but not as expensive as FTTC + “Fibre on demand”.

        Mark

        2013/06/18 at 23:32

      • Why are you asking about activation in 24 hours, what’s your point?

        Somerset

        2013/06/19 at 07:56

      • 15m is a headline number, not an actual deliverable today.

        Br0kenTeleph0n3

        2013/06/19 at 08:02

      • Somerset – many of us are more than a little ‘dubious’ about the actual value of being ‘passed’ by BT (if you excuse the thought) and I guess Ian was asking whether being a ‘home passed’ meant you could actually get Infinity if you wanted it, or whether it just means the cabinet (as I believe you yourself have suggested) is fibred and in fact there may not be enough capacity in it to connect Mr ’24 hours’ without more significant expenditure – and of course, there is the question of whether ‘HSB’ can actually be delivered to ‘Mr 24 hours’ at all due to line performance. I think his use of ’24 hours’ was a little over-optimistic [well, he is a journalist :-))) ] but certainly one might expect to know within 24 hours whether a connection was possible in reasonable time.

        In other words, are we looking at the King’s New Clothes or a proper wardrobe?

        mike phillips

        2013/06/19 at 08:12

      • Only you think that is an issue…

        Somerset

        2013/06/19 at 08:17

      • Mike – if we ignore Ian’s sad attempts to find bad in everything then it’s reasonable to assume that cabinets are installed for customers of the 16 home and 31 business ISPs. Clearly as soon as a cabinet is available service can be ordered for as many users are ports are available, timescales depending on the ISP. Your point is once a cabinet is full does BT provide another one. Examples have been given of this happening and presumably the ISPs push for it, as they are paying BT, not the end users.

        If initial take up is low while people wait for contracts to end and the publicity rolls out then are there many examples of full cabinets? If a cabinet is full then that’s a good example for Ian of how popular a FTTC service is.

        Somerset

        2013/06/19 at 08:37

      • One way to finish this debate is for BT to publish the speed and coverage commitments it is making to local councils. Why does it not?

        For the nostalgic, this from SamKnows, talking about BT’s 21 Century Network five years ago: “Indicative pricing has been released by BT Openreach (note: Not BT Wholesale!). This places a 10Mbps/2Mbps line at 8.33 per month, and a 100Mbps line at 44 per month [13]“

        Br0kenTeleph0n3

        2013/06/19 at 19:32

      • Possibly because the locations will not be known until all the surveying and planning has been done.

        Which makes it interesting to see that Broadway Partners are looking for funding in 3 areas, do they know they will not be covered? FundTheGap shows people have doubts, £500,000 needed for the Cotswolds and only 2% raised so far with 6 days to go.

        Somerset

        2013/06/23 at 08:29

      • “Possibly because the locations will not be known until all the surveying and planning has been done.” How clever of BT to get contracts that nail down the money without specifying what it has to deliver.

        Br0kenTeleph0n3

        2013/06/23 at 19:09

      • Contracts let by BDUK, the counties and their expensive advisors and consultants!

        Somerset

        2013/06/23 at 20:13

      • So how does BT know how much it will cost to “upgrade” the area before the planning and surveying work has been done?

        How is BT able to commit to anything in particular in any area?

        Oh, wait. I might be onto something here.

        Mark

        2013/06/25 at 14:36

      • Will they keep spending in an area until the money runs out? Bit unfortunate if they don’t meet the target…

        Somerset

        2013/06/25 at 20:15

  7. Don’t forget, Mark, that with ADSL a faceplate splitter at the (newer) master socket can reduce wiring problems significantly. You might even ‘persuade’ BT to replace your master socket!

    mike phillips

    2013/06/18 at 11:37

    • It may have been possible for BT to replace the wiring and probably part of the circuit (D or E side) to “keep us”, but I’d have thought they would rather lose the customer.

      Which is what happened, because there is competition (3G) and therefore an alternative. Even ADSL2+ with perfect socketry and wiring wouldn’t get anywhere near 3G’s speeds.

      The comparison between the performance of DC-HSPA and “Fibre to the cabinet” (should it arrive) deployed over that ancient old wiring should it arrive will be a more interesting one.

      As it is, the cell we connect to is further away than the phone exchange is by about 200m. Leaving aside contention, it shows just how very poor copper (if they are copper) lines are at transmitting broadband signals when a radio signal over the air, over a greater distance, can wipe the floor with it.

      Mark

      2013/06/25 at 14:41

      • agree Mark, 3g when you can get on a cell it is far better than adsl, especially on upload. the problem is that data is so expensive on mobile. you can’t watch video and stuff on it cos it costs too much. another issue is that many rural areas don’t even get 2g let alone 3g.

        chrisconder

        2013/06/25 at 20:13

      • Our 3G modem connects to a router then powerplugs so as to provide a wired connection to the TV as well as Wi-Fi. We’ve watched far too much stuff on Netflix :)

        Streams perfectly well albeit an HD stream will stutter occasionally during school holidays, such is the nature of the thing – at those times it will drop as low as 6Mbps on speed tests, so it only has to drop below that momentarily for streaming to suffer.

        I was persuaded into the one month rolling contract for a new SIM card which gives you 10GB/mo. Three will set the credit limit to zero if you ask them so no overage bills.

        The area has just been upgraded to DC-HSPA so I’m hoping to get over 20Meg on it (hoping probably the operative word) which needs a new modem. If it works well I’ll get three of the one month SIMs which comes in at 45/mo for 30GB/mo which isn’t bad. And we can put the £16/mo we would have had to spend on the phone line rental towards it.

        In the time we’ve been here the top speeds from 3G have gone from 2.9Mbps to 14Mbps. I don’t know how they do it without bungs of taxpayer’s money.

        Only in the UK could we be one of the “lucky” ones eh?

        Mark

        2013/06/25 at 23:26

  8. According to the FT, M Miller has realised what we have all been saying and wishes to ‘re-organise’ BDUK to help the roll-out, particularly for rural areas, but no mention of ditching the RCBF (yet).

    http://www.ft.com/cms/s/0/cd3f9952-dcfa-11e2-9700-00144feab7de.html#axzz2XEPX89xp

    She appears to be in a bit of a panic and wants this all sorted by Wednesday :-)). I smell a touch of harakiri in the air?

    Is it too late?

    mike phillips

    2013/06/25 at 15:22

  9. I have it all planned – quick ministerial re-shuffle following the review tomorrow, and Ian Livingstone will be ‘advanced ‘ into ‘Minister for Infrastructure Development’ to over-see the rumoured new ‘spend’ on this.

    Job done!

    mike phillips

    2013/06/25 at 19:12

    • Many a true word spoken in jest Mike… but at least public awareness of this issue is growing.

      Ruskin on to it now: RT @ruskin147:#bduk #digitalbritain here’s my take on the story : http://t.co/uqI9CUizYs

      chrisconder

      2013/06/25 at 20:10

      • How not to run a broadband project:

        1. Allocate a budget first without assessing the costs of particular deliverables.
        2. Set goals which don’t need to be met, and which are not necessarily achievable at that level of budget. Make loud noises about those goals to make sure everyone is aware of them even though at this stage there is no guarantee of delivery whatsoever.
        3. Spend a small fortune on setting up a body to administer it and commission “reports”.
        4. Put local authorities, who are not broadband experts by any means, in charge.
        5. Tell local bodies that they can commission what suits their area best as long as it comes from one long-term demonstrably inept supplier which has a habit of serial idiocy, and isn’t WiFi.
        6. Having done (5) to guarantee the worst possible negotiating position, then have all those local bodies bid separately so as to guarantee the worst possible deal.
        7. Back at the central body, sack anyone who dares to give advice to councils which might strengthen their position.
        8. When local bodies seem to be investigating the options, strike off the one competitor, tell them to hurry up and to get “their plans in” (AKA get the money to BT).
        9. Watch as, inveitably, the entire process is held up by the EU because of the State Aid rules which the body in (3) would have known would happen.
        10. Put in place no demonstrable means of measurement of success at all.

        In a few years, after the single supplier has been placed in such a position of power that competition is driven from the “market” and their negotiating position is stregthened still further, go back to step one.

        I probably missed a couple of things there.

        Mark

        2013/06/25 at 23:44


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