Will Vaizey end B4RN’s wait for broadband money?
Vaizey – time to take the wait off?
Communications minister Ed Vaizey is expected to sign off at least one application for funds from the £20m Rural Community Broadband Fund (RCBF) on Tuesday.
The application is from B4RN, the high profile DIY fibre to the home network in rural Lancashire. B4RN applied months ago for £875,000 from the RCBF, and is also negotiating a bank loan.
B4RN’s application, and up to 50 others, have been delayed while local councils try to establish where BT intends to roll out its next generation access to broadband and what access speeds and reliability it promises. Early reports suggested BT intends to duplicate two-thirds of B4RN’s coverage in one of the remotest parts of Lancashire.
The government has said the speed and coverage template details (SCT) in BT’s NGA contracts are commercially confidential, but it expects local councils to publish them once the BT roll-out is under way.
However, B4RN had a prior agreement with Lancashire County Council (LCC) for the county to exclude B4RN’s coverage area from BT’s plan. This meant B4RN’s application should have been gone through without reference to BT’s roll-out.
“The hold-up was down to LCC refusing to confirm (to the RCBF) they were not planning on funding BT from the main pot (of state aid) in the same postcodes, this despite our agreement,” B4RN CEO Barry Forde told Br0kenTeleph0n3.
Forde said LCC had asked B4RN to drop a complaint with the European Commission against LCC’s use of state aid to help BT overbuild a pre-existing privately funded network, namely B4RN. He agreed to drop the complaint only after LCC promised to give B4RN’s postcodes ‘immunity’ from state-aided competition from BT. Forde published B4RN’s latest postcodes as recently as April.
LCC did not immediately respond to a request for comment. If it does, we will update the story.
B4RN’s complaint is essentially the same one BT and Virgin Media used to scupper the government’s Superconnected Cities initial £150m plan to see 100Mbps fibre to the premises networks built in the UK’s 22 largest cities. This prompted the extremely well-connected blogger Philip Virgo to suggest that the two carriers be referred to the competition authorities for anti-competitive behaviour.
LCC does a lot of business with BT. Three years ago it handed BT the management of the Cumbria and Lancashire Education Network (CLEO) schools network, which Forde designed, and later signed a £40m contract for its county public service network with the telco. In 2011 it entered a £400m, 10-year joint venture, One Connect, with BT to provide back office services, a deal whose transparency an MP has questioned. BT now stands to scoop £130m from the Lancashire NGA roll-out.
Update
Barry Forde has been in touch to say that the amount B4RN is currently seeking is £875,000, not £750,000, due to a bigger coverage area, and that I should be referring to the Lancashire, rather than Lancaster, County Council. Points noted; changes made above.
Br0kenTeleph0n3 
Whatever happened to the “we don’t need any subsidy” model of B4RN ? Is a community funded solution not viable after all, even in a notspot with high takeup.
PhilT
2013/06/30 at 14:40
Nothing wrong with B4RN applying for a subsidy. The residents & businesses in these areas have probably been paying for a sub standard “up to 8mb” ADSL service for years so at least with B4RN you know it will be spent on a future proof technology and subscribers will finally get the speeds they are paying for.
Andy
2013/06/30 at 15:52
Thanks PhilT,
From the ashes of the original plan by Lancaster city council for RDPE funding (scuppered by the then NWDA way back in history) for 7 parishes came B4RN, with a JFDI approach and including another parish making 8, and a good business plan. When BDUK and RCBF funding was announced it seemed sensible to apply for it, as the area fulfilled all the criteria and meant it could be built far faster with government support and help more people much quicker. It also meant resources could be made available to help other communities do the same thing if they chose to, as more competition means we get a digital britain far sooner, which is what we all want. BDUK funding is not available for communities, but RCBF is, and for upland areas in the final 10%. As the B4RN area is in the final 3% it is eminently eligible for this funding, and would make excellent use of it, as demonstrated by the guts of the community and all their efforts so far.
Working together with government and building a digital future for rural people is a win win solution for all. It would also help other EU countries to see what can be done when the people are enabled to help themselves. It isn’t rocket science. Its plain common sense.
cyberdoyle
2013/06/30 at 20:28
If there is money available then apply for it!
Somerset
2013/06/30 at 20:47
B4RN is not intending to share future profits with the taxpayer so I am against it being given a subsidy. It is not an innovative technology company with anything new as I understand it. It is only interested in serving locations with dark fibre already close by. It is not serving any social purpose. It has gone into a low risk business for profit in my view and should get on with it. I would be complaining if I lived locally that B4RN has decided in its commercial interest that my village would not be included in BDUK investment when I might have preferred a choice of broadband supplier. Did it actually ask residents if they wanted to be excluded from BDUK? I am annoyed with the BBC that gives this company loads of airtime but has never asked people if they want B4RN or BDUK. On The Today programme the interviewer knewnothing about the company from his opening question. He grilled the minister but was not in a position to question a company that it seems is to be handed taxpayers money.
not an innovative technology. It is a tiny bit of locally laid fibreoptic cable
Selina Howells
2013/07/06 at 08:16
Thanks for your comment Selina. A couple of points:
You don’t want B4RN to be subsidised because they won’t share future profits with taxpayers (instead ploughing it back into community projects without roundtripping it through Whitehall), but you are OK with giving BT’s shareholders £1.2bn in subsidies that further reduce the competitive opportunities in the Final Third, is that correct?
As I understand it, the main motivation for B4RN is that it was likely to be excluded from the BDUK money, at least in any meaningful time, and that the founders were motivated more by ensuring that their community had access to modern networks and so closed the “digital divide”.
As regards the technology choices, BT does not plan to dig up its copper lines which have been there for decades, so it is not using innovative technology either. At least B4RN is offering its community a more open-ended future in networking; physics sets the limits of copper much lower than fibre.
Br0kenTeleph0n3
2013/07/06 at 10:28
‘It is only interested in serving locations with dark fibre already close by.’ Please explain. The connection to the outside world is via a commercial provider.
Somerset
2013/07/06 at 12:56
Thank you for publishing my comment which disagrees with your view. You are more of an expert so please correct things that I say that are wrong, and apologies for incorrect statements.
The motivation of B4RN is a good one like all business – profit. It’s morally superior branding makes it difficult to question. My view is B4RN is a business, it should take its own risks and keep its profits and not have taxpayer money but it seems the BBC has given it such a profile that government will give it money as a PR stunt. B4RN is actually a PR company in my view, certainly not a technology company.
I have complained to the BBC about its coverage of B4RN. I asked it to actually go to villages where B4RN operates and ask the people living there if they wanted to be excluded from BDUK, if they wanted a £30 a month connection. I had a standard reply. We don’t know what the motivation of the founders is. You think it is altruistic. I think it is more likely profit and that perhaps one or two householders locally running businesses which need upload capacity have made everyone else in their village think they need something they probably don’t understand and may not be able to afford. The fact that it wants taxpayer money and its extremely low number of customers suggests there is a lack of commercial demand.
In a guest post on an EU blog (PR skills money on EU trips) B4RN said it leased “dark fibre” to the nearest peering centre. It follows that it can only operate where it can lease dark fibre from Cable & Wireless, Global Crossing, Geo etc. If the 3% not covered does not have dark fibre nearby that can be leased then the likes of B4RN cannot operate. I presume some innovative technology solution is required in remote locations about which I know nothing but which I imagine will come out of a very big company/university research lab that has invested millions over many years. B4RN by contrast owns just the tiny bits of cable it lays locally. It uses peer to peer so does not pay for data which should make its commercial success easier. It does not pay farmers for digging over their land and instead offers them free connection, Again, this should make it easier for the company to compete and well done for negotiating these agreements. It has used tax breaks to raise capital. The community it seems has volunteered so it has not had to pay staff. All this should tell you that the problem B4RN has is it has no customers, or not enough customers to ever be a business. This would be true for any enterprise like B4RN, not enough customers. Not everyone wants a £30 monthly superfast connection. Many are happy with a £6.99 package. We are not all geeks. Giving B4RN taxpayers money you might as well throw it away.
On BT, it seems the right company if we have decided we need everyone connected to superfast broadband and the state is going to intervene to make that happen. I don’t think it will just pocket the £1.2 billion and do as little work as possible. I think it will make the money go as far as possible because it wants as many houses connected so it can sell data packages in competition with other ISPs. Councils also want every property connected so they can save millions using digital delivery methods – online forms, remote consultations, paperless visits to homes etc. Individual rural householders running for profit video production companies, architectural services etc from home that want mega upload capacity for their businesses can pay for their own fibre to the home. This is a very vocal lobby in my view that cares only about itself and not how the most efficient network that will reach most homes can be built. It is not for the taxpayer to pay for. On a project like this, I think it is only the state with a very big commercial partner that can build it. I am not sure we can afford competition which would mean competing networks instead of one network. Competing networks means paying for excess wasted capacity instead of the best full capacity. The regulator obviously is crucial. Regulators have been fantastic recently in my view, having been dreadful for years. Martin Wheatley at the Financial Conduct Authority is the model.
Selina Howells
2013/07/07 at 08:54
Hi Selina The purpose of the blog is to follow the BDUK money, to see if it is being spent wisely, and to explore alternative ways of spending it so that we taxpayers get better value for money. You appear to believe that we should give all the money to BT, which is run for shareholders’, not taxpayers, profit. BT has already said it can’t make a profit in the area covered by the BDUK money. If BT can’t make a profit there, then why not let others try? If we all agree that it is a social good that people in these uneconomic areas should have access to high speed broadband, then we can choose to subsidise it. There are many ways to do that. Through BDUK we have chosen to give the money to BT so that it can upgrade its network. However, we could just as easily have chosen to pay any operator to deliver a service of a defined speed and reliability, which is what most people care about, not how it is delivered. Had we chosen that It is very possible that local councils might then have had a choice of routes to deliver digital services to people. As it stands, councils now have no choice but to use BT. To paraphrase Mark Twain, if you put all your eggs in one basket, you had better watch that basket. That’s why monopolies are regulated. You may think Ofcom has done a good job regulating BT; I disagree.
Br0kenTeleph0n3
2013/07/07 at 13:11
If BT is run for shareholders, not taxpayers, profits then so all all the other possible providers like C&W/Vodaphone, Virgin Media, Fujitsu, GeoTel etc. plus all their contractors and suppliers like Cisco.
Assuming a defined speed would require FTTP then what would the cost to the taxpayer be?
Somerset
2013/07/07 at 17:51
How much is B4RN charging for a 1Gbps symmetrical service? Why don’t we define that’s the benchmark for a service in a remote rural area. A similar service in the towns and cities cost less. Oh, wait – I forgot: Price is not a function of cost. HT Philip Virgo.
Br0kenTeleph0n3
2013/07/07 at 20:59
So we now agree that picking out BT as a company with shareholders is not relevant.
B4RN is not using commercial labour rates so not suitable as a benchmark. More appropriate would be the service provided to Hambleton etc. by Gigaclear. The Home1000 product is £100 connection and £69/month.
Somerset
2013/07/08 at 08:14
Any sensible company controls its costs, Wonder why BT can’t persuade farmers to give them free wayleaves. As to Gigaclear’s prices, why don’t you add in BT’s Fibre on Demand prices so that we can compare like with like?
Br0kenTeleph0n3
2013/07/09 at 08:07
I have no idea why you have come up with BT/farmers/wayleaves to move the discussion in a different direction.
I have given details of one realistic benchmark, if there are others then please add for us to see.
Somerset
2013/07/09 at 18:39
Ibelieve it was you who said B4RN’s costs were lower because it used volunteer labour (paid for in shares), and landowners had agreed to waive wayleaves (in return for shares). How come BT doesn’t make them a similar offer?
Regards connection costs, the reason you cannot compare BT’s FTTP product with that of B4RN or Gigaclear is because it doesn’t exist. “Fibre” offers from Sky and TalkTalk are rebranded BT Infinity products.
What we do know is that Openreach is offering a 330Mbps down/30Mbps up Fibre on Demand product to ISPs. The cost of this is, according BT’s press release of 5 December 2012and subsequent press reports, as follows: Connection fee: 500 Distance-related fee for 55% of premises: 200-1000 Distance-related fee for remaining premises: 1400-3500 Monthly cost: 38 ISP profit: x
Which makes Gigaclear’s 1Gbps symmetric deal for 100 connection and 69/m look like pretty good value.
Br0kenTeleph0n3
2013/07/09 at 20:27
There seems to be a reluctance to discuss the cost of FTTC to all UK properties, not sure why, as this is the ideal future.
Somerset
2013/07/09 at 18:42
For a realistic estimate you should ask Openreach for their costs. Good luck with that. As the NAO found, BT’s initial description of its costs for the BDUK roll-out were unacceptably vague, and Ofcom isn’t allowed to tell what it knows about Openreach’s costs.
Br0kenTeleph0n3
2013/07/09 at 19:59
Job for a good investigative journalist with a detailed knowledge of the technolgy and commercial aspects.
Why just Openreach, I thought there were many who could do a better job at a lower cost.
Somerset
2013/07/09 at 20:04
Hello, I did not mean to praise Ofcom. Look forward to reading your blog more often.
Selina Howells
2013/07/07 at 17:09
I hope you will continue to read Br0kenTeleh0n3, and I hope you’ll continue to contribute. The more voices here, the better off we all are. For example, how could Ofcom improve its performance?
Br0kenTeleph0n3
2013/07/07 at 21:04
Nearly a year has passed. And many homes passed by FTTC, never to be connected. What a superfarce, and still no help or support for altnets from Ed. Just recording this here for historical purposes.
chrisconderc
2014/05/25 at 21:22