Archive for the ‘Politics’ Category
Shoreditch MP Meg Hillier is to hold a Broadband Roundtable at 10am on 31 July at Perseverance Works in Shoreditch, the heart of London’s TechCity district, to discuss the “embarrassing” availability of broadband in central business districts, never mind rural areas.
So far 422 suppliers have registered to service the government’s £150m Urban Broadband Fund, which funds the SuperConnected Cities scheme. Some 149 have have provided quotations, and 90 have won business, says DCMS.
By the end of May the cities had issued 1008 vouchers in 14 months. The fixed/wireless connectivity split was 77/23 per cent, and the average speed per connection went from 11.2Mbps to 70.3Mbps for downloads.
According to Hillier’s blurb, “Broadband is a national embarrassment and action is urgently needed. Government grants of £3,000 have been added in, but that is like a sticking plaster on a broken arm. Businesses are moving out of the area because they simply cannot access high speeds.”
The cities in the SCC programme are Aberdeen, Belfast, Birmingham, Bradford, Brighton and Hove, Bristol, Cambridge, Cardiff, Coventry, Derby, Derry/Londonderry, Edinburgh, Leeds, London, Manchester, Newcastle, Newport, Oxford, Perth, Portsmouth, Salford, and York.
DCMS says it will provide a city by city breakdown “this summer”, but declines to say how much money has been paid out so far or to whom. However, Virgin Media tops a DCMS table of suppliers to whom vouchers have been issued (see below).
BT, which Ofcom says has an effective monopoly on wholesale fixed line access despite Virgin Media’s efforts, declines to say how many vouchers it has won. Its Openreach division is likely to be a big winner anyway. This is because smaller operators like Hyperoptic and TalkTalk rent ducts and lines from Openreach, even as BT’s Business division competes with them at a retail level.
So does 1,008 vouchers issued in 14 months represent success or failure? To be fair, it’s probably too soon to tell, but there’s not much time left – DCMS says the money dries up in March 2015.
It’s appropriate that Perseverance Works (PW) is the venue. Helped by former BDUK consultant Mike Kiely, the firm has just contracted Fibre Options to supply a 16Gbps link into the premises which houses around 90 businesses.
As landlord, PW will own the network. Each tenant will be able to use the government vouchers to order a connection running at up to 1Gbps. Fibre Options will do the provisioning and billing.
It took more than a year to negotiate the deal because the usual suspects were not prepared to consider an aggregated customer base – they wanted to sell a long-term leased line service that most tenants neither wanted nor could afford. PW eventually went to tender, which Fibre Options won.
PW spokesman Paul King says he sees “no reason” why PW’s approach should not be replicated by business parks across the country. Members of INCA are currently targeting business parks, most of which have been neglected in BT’s NGA roll-out.
The details again: 10:00-11:00, Thursday 31 July, 2014 at Eastside Educational Trust, Suite 16, Perseverance Works, 37 Hackney Road, E2 7NX. To book a place call Meg Hiller’s office at 0207 219 5325.
ISPs cash in on voucher scheme
|1||Virgin Media Business|
|5||Unitel One Source Ltd|
|9||Venus Business Communications|
|13||Unique Network Solutions|
|14||Qubic Group Plc|
We don’t normally move away from broadband, but this is a worthy exception because it bears on the kind of society that access to broadband opens up.
Last April the European Court of Justice struck down the Data Retention Directive . This is the basic European legislation that allows governments to implement legislation that enables them to collect, store and share communications data. The ECJ said it was too broad and there were too few safeguards to protect against abuse of the privilege.
This meant that the UK’s mass surveillance of its citizens’ communications lacked a legal basis. The Home Office told ISPs (which ones is secret) to continue to collect, store and share this data on demand with up to tens of thousands of public sector workers under the RIPA law. Privacy groups started court proceedings against the ISPs.
The government last week introduced primary legislation it said would restore its powers, nothing more. Now legal academics have challenged that view.
Paul Bernal, a professor at East Anglia, has published an open letter to MPs and lords calling for considered debate of the Data Retention and Investigatory Powers Bill (DRIP) and a halt to the “emergency” rush to turn the bill into law tomorrow.
“In fact, the Bill proposes to extend investigatory powers considerably, increasing the British government’s capabilities to access both communications data and content. The legislation goes far beyond simply authorising data retention in the UK. In fact, DRIP attempts to extend the territorial reach of the British interception powers, expanding the UK’s ability to mandate the interception of communications content across the globe. It introduces powers that are not only completely novel in the United Kingdom, they are some of the first of their kind globally.”
If passed the bill will give legal cover to the mass surveillance activities of GCHQ and the NSA exposed by the Snowden revelations.
Most European countries have either not implemented the Data Retention Directive (Germany decided it breached their constitution) or have struck down their enabling legislation to comply with the ECJ’s decision.
Ofcom is obliged to not disclose the costing information that it gets from BT, which can be different from that which BT discloses in its regulatory financial statements. The Value Office Agency, which sets business rates taxes, does not disclose its financial model, or disaggregate BT’s products, so an important component of BT’s regulated prices is opaque.
Besides, BT sometimes changes the basis of its costs, as in “A6.47 BT has moved from an absolute valuation to a methodology based on indexing capital expenditure by RPI.”
This leave plenty to argue about. Sky and TalkTalk in particular are fighting a running battle with Ofcom over its assessment of the effect of business rates on BT’s prices for unbundled local loop lines (LLU). The debate forms part of Ofcom’s consultation on the fixed access market, which goes into excruciating detail, complete with triple negatives, on the business rates issue in Annexure 26.
The result of the debate is material to the two ISPs, which are the biggest exploiters of local loop unbundling. According to the Office of Telecommunications Adjudicator, by the end of May there were 9.3 million unbundled lines, and 5.68 million lines on Wholesale Line Rental (WLR).
The ISPs contend that BT receives a rebate on business rates due to LLU that amounts to an estimated cash value of £23/y per line. The rebate covers BT’s loss of profits due to the alienation of the full earning potential of the lines. The VOA and Ofcom consider those putative profits to arise mainly from “downstream” products from Openreach.
BT still makes money from renting out the lines, and besides any “lost profit” is at best a guess. Further, the business rates tax is a tax on assets, not profits. The ISPs believe whole of the rebate should be applied to the price BT charges for the line. Instead only 15p is. They say this leaves BT with net income from the rebate of more than £20/y/ULL. Put another way, this means the ISPs are paying around £180m/y in unjustified costs, which BT can then apply to subsidise downstream products.
They allege that Ofcom ignores this income from the rebate in assessing Openreach’s assets to price LLU. They allege that the resultant prices for LLU are higher than they should be, and that BT’s downstream products benefit from an illegal subsidy. They argue that since BT’s rebate is based on profits, not assets; if Ofcom disagrees, it should get the VOA to change the basis of its rating of BT, and not simply pass the extra costs on to the LLU operators.
Another issue that confuses matters is that Ofcom uses a theoretical all-copper network model for its sums. This disregards the thousands of kilometres of fibre BT has installed in the past five years. Fibre is cheaper to run than copper. TalkTalk’s plea for Ofcom to simply consider the outcomes produced in the market fell on deaf ears.
Ofcom has dismissed the ISPs’ objections, but it did go back to BT for more data about its costs. “We have also carried out a PWNRC (profit weighted net replacement cost) calculation using data on BT’s assets which are more detailed than those published in the RFS…In the light of this, we do not now consider that BT’s 2011/12 allocation of cumulo [business rates] costs to MPF and WLR services is reasonable.
“An allocation which is in line… would result in a reduction in the cumulo costs attributed to WLR rentals from £3.31 to between £2.80 and £2.98 in 2012/13 and a reduction in the cumulo costs attributed to MPF rentals from £3.16 to between £2.68 and £2.85 in 2012/13. We have reflected this reduced allocation in our charge controls,” Ofcom said in the annex.
Ofcom has now published the new LLU charge control decision. It comes into effect on 1 July.
Sky and TalkTalk did not respond to requests for comment.
A decision by the Welsh Assembly Government (WAG) to not release the test methodology and raw test data for the £425m Superfast Cymru broadband project has been referred to the Information Commissioner’s Office.
The complaint stems from a claim by a junior minister that the project had led to more than 100,000 premises being connected at an “average speed of 61Mbps”. It is part of long-running scepticism that the contract will deliver what the WAG has claimed it will, and now subject to audit.
The claim, by deputy minister for skills & technology Ken Skates, was challenged by broadband consultant Richard Brown. Using the Freedom of Information Act, Brown asked the WAG to supply the methodology and the raw test data on which Skates based the claim.
The WAG refused, saying the information would be published at a later date. Brown asked for a review of the WAG’s decision.
Rob Hunter, director of finance and performance in the department of economy science and transport, again refused Brown’s request. He referred to the earlier reason for non-disclosure and added that the information, together with an explanatory narrative, will be published, “probably in summer”, together with a ministerial announcement.
“I am of the opinion that publicly releasing the raw material at this time, without the explanatory narrative and accompanying explanatory ministerial announcement, would cause disruption to the Welsh government’s pre-set programme and the ministerial process in relation to this work in that the raw information, if released prematurely, may be misconstrued and re-published by some, or extracts of the information re-published, in such an ambiguous way as to cause confusion amongst the public and cause disruption to the effective conduct of public affairs.
“To that end, I do not think it is reasonable in all the circumstances or in the public interest to release this information prematurely. Rather, I believe the public interest would be best served if the information were released alongside the ministerial announcement and consultation participation report so that the public can review the information in context. I am satisfied therefore that the balance of the public interest falls in favour of withholding the information.”
In his complaint to the ICO, Brown said, “It does not serve the public interest that a junior minister can make claims in a press release (that is subsequently printed in the press), [but] that the information for testing those claims is withheld until a later date.
“I have been separately informed that the test data is not formed in the manner that has been described, in so much as that the 100,000 connections are not live connections (as described by the junior minister in his release), but are (in the majority) simply theoretical tests that have taken place to establish the possibility of these connections and their speeds.
“Such theoretical connections belies the claim made by the junior minister that the connections are ‘live’ with an average speed of 61Mbps. As such the public interest is in fact damaged due to the claim likely being both false and misleading. The determination to publish the data at a later date, simply moves the ‘proof’ to a later date in an effort to minimise its relevance in informing the public interest.”
Brown noted that WAG had waited until the last possible day to reply to him. “I am of the opinion that this is contrary to the spirit of the act, and is contrary to the commissioner’s guidance, and furthermore is a deliberate attempt to prevent access to information that would be appropriate to informing the public interest.”
In support of his complaint Brown claimed that Hunter’s statement that premature publication could confuse the public was “simply without merit”.
He said, “If this were indeed the case, then a programmed press release by the junior minister would not be possible for precisely the reasons given for not substantiating the claim made by the same junior minister. Further, had the junior minister not made such a wildly unsubstantiated claim in the press, the public interest would not need ‘early’ access to the data to test the claim made.”
Brown believes that Skates’ claims cannot be upheld using the withheld data. The denial on the grounds of future publishing and the unnecessary use of the total time allowance for responses were an attempt “to obfuscate the correct and appropriate informing of the public interest” rather than trying to preserve such public interest as Hunter claimed.
“The commissioner will be aware that such actions are contrary to the act and the deliberate attempt to prevent the legitimate release of information that informs the public interest remains an offence under the act,” Brown said.
Maps showing that the Welsh Assembly Government’s (WAG) publicly-funded Superfast Cymru project supplied by BT will overbuild an existing publicly-funded network have led to questions about the legality of the £425m next generation broadband project.
Using post code data obtained under the Freedom of Information Act with the help of the Information Commissioner’s Office, broadband consultant Richard Brown has identified post codes included in the Superfast Cymru roll-out that are already covered by the £30m Fibrespeed network. He has asked the European Commission to investigate whether there has been a breach of the regulations.
BrokenTelephone reported in November last year that the WAG was seeking ways to overbuild Fibrespeed. At the time business, science and transport minister Edwina Hart said a change in the guidelines governing state aid for broadband might allow the overbuild, and promised to report back to WAG members.
Fibrespeed is owned by the WAG but supplied and operated under a 15 year contract by independent dark fibre network operator Geo (sold last week to US-based Zayo). It was to service 14 business parks in north Wales with an optical fibre trunk network at prices equivalent to London and the UK South-East, according to assembly member Lesley Griffiths, speaking in 2008. Local ISPs tapped spare capacity in the network to provide local residents with wireless connections starting from 2Mbps, providing a service BT could not match.
Brown asked Hart a year ago if Superfast Cymru would overbuild Fibrespeed. “At that time I received a statement from the business minister that she was satisfied that there was no overbuild, and the EU Commission received a similar reassurance that there was no overbuild and so chose not to pursue the matter any further,” he wrote to the commission.
On receiving the post code data for Superfast Cymru coverage areas, he tested them against those covered by Fibrespeed (see table).
“The original statement issued to me by the business minister, and subsequently affirmed by the EU Commission, was that the Fibrespeed project was specifically targeted at business parks in the north of Wales and, whilst resellers of the Fibrespeed capacity may have extended this network using alternative connection methods (wireless appears to be prevalent), no business park was to be covered by Superfast Cymru, and so no overbuild of the original public funded project would take place,” he said.
“LL17 OLJ is St Asaph Business Park. It is where Fibrespeed have their principal office of operations.”
Brown said, “It is clear that a deliberate attempt appears to have been made to misrepresent both the Fibrespeed and Superfast Cymru projects to the EU Commission for the purposes of securing additional (duplicated in part) public funding.
“Whilst the declared outcome sought (increased access of citizens to superfast broadband speeds) is of course laudable, the Superfast Cymru project itself is under scrutiny as to whether it can indeed deliver on this.”
|Postcode||Served by Fibrespeed||Served by Superfast Cymru|
|LL77 7UR||Yes (case study)||Yes – released postcodes*|
|LL65 4RW||Yes (case study)||Yes – released postcodes*|
|LL12 0PG||Yes (case study)||Yes – released postcodes*|
|LL13 9XT||Yes (case study)||Yes – released postcodes*|
|CH5 2NR||Yes (case study)||Yes – released postcodes*|
|CH7 6HB||Yes (case study)||Yes – released postcodes*|
|LL57 4YH||Yes (case study)||Yes – released postcodes*|
|LL17 0LJ||Yes (case study)||Yes – released postcodes*|
*released postcodes refer to a document which is the 54k (approx) postcodes that the Information Commissioner compelled the Welsh Government department to release to Brown that detail the target intervention areas of the Superfast Cymru project.
Vodafone has called on European regulators to ensure that non-incumbent-owned mobile network operators have access to fibre backhaul on the same terms and conditions as their in-house operators or face a declining competitive ecosystem.
The call stems from a looming shortfall in microwave capacity and prohibitive pricing of incumbents’ fibre, poles and ducts to cope with the fast-rising volume of data traffic.
Research by Analysys Mason commissioned by Vodafone found that incumbent operators favour their in-house mobile operators when it comes to accessto a fibre-based backhaul. “These inputs are not always made available to competing operators as a wholesale or retail product with the desired interface, quality, speed or price.
“The fact that the required inputs are not available, or are extremely expensive, may dampen competition in the mobile market in some countries because the fixed incumbent operator is usually (with the exception of the UK) also a major mobile operator and can gain benefits as a result of this vertical integration – specifically the much greater capillarity of its fibre network,” it said.
The leased line market, in which the mobile operators are a large segment, contributed £2bn/y to BT’s £18bn turnover, the researcher found.
Ben Wreschner, who leads Vodafone’s regulatory economics section, said all Vodafone wants is access on equal terms and conditions as the in-house mobile operator. He said Vodafone accepted that there couldn’t be a single price across Europe, if only because labour prices differ. Instead he called for a harmonised approach to access to fibre for mobile backhaul.
He called on the European Commission to provide guidance to BEREC, the European telecoms arch-regulator, for directives that national regulatory agencies (NRAs) can implement to give effect to this.
The study showed that independent mobile operators use microwave extensively to backhaul their traffic. But they are running out of spectrum. The shift to small cells for LTE traffic is quickly eating up the available capacity. Vodafone’s preliminary report for 2014 revealed that 4G smartphone users use about twice as much data as 3G users, mainly to stream video. Smartphone penetration in Vodafone’s European markets is around 45%. Both factors are pushing mobile operators toward fibre, which has the required capacity to ensure an acceptable user experience.
The MNOs’ options are to switch to so-called E-band microwave in the 60-90MHz band, which due to rapid attenuation of signals, will require many more sites to be rented; to rent access to commercial fibre where available; to rent regulated fibre from the incumbent operators, or to build their own fibre networks.
Vodafone has bought some of its own fibre backhaul (eg Cable& Wireless), but it has cost billions and doesn’t always cover the cities where demand is greatest. Building new fibre would duplicate existing fibre networks, take a long time, and cost a lot more on top of their expensive mobile licences.
Last week Ofcom said it would give BT a further period of non-regulation of fibre prices for high speed (above 1Gbps), where it holds an effective monopoly outside London. It also promised to rule soon on a TalkTalk complaint that BT operates an illegal margin squeeze on fibre prices.
Wreschner said he was watching the margin squeeze decision with interest, but stressed that that is a different market (retail) to Vodafone’s concern (wholesale) about backhaul. “We think the wholesale market needs specific regulation,” he said.
This is why, although they face similar problems as altnets trying to provide fibre to rural homes and businesses, the mobile industry did not speak out when the BDUK process was being set up, he said.
He has postponed a study of public sector broadband aggregation (PSBA) in favour of the value for money review, which is due out by the end of the year.
The study will try to answer three questions:
- Does the Welsh government have a coherent strategy for investing in high speed broadband infrastructure in Wales?
- Does the Welsh government have robust contractual arrangements for Superfast Cymru?
- Are the Welsh government’s high speed broadband programmes likely to achieve the intended benefits?
In scope is the effectiveness of the government’s strategy and targets; the programme’s financial planning and governance; the contractual arrangements with BT; the procurement processes, risk management arrangements, and the monitoring and evaluation of the contract.
Not in scope is the propriety of having BT staff represent the Welsh government’s fund-raising effort in Europe, says Rachel Moss, head of communications at the Auditor General’s office.
The question of a possible conflict of interest in having Ann Beynon, BT director of Wales, sit on the European Programmes Partnership Forum in the Welsh European Funding Office was questioned in March 2013. £90m of the money for Superfast Cymru comes from the European Regional Development Fund (ERDF.)
At the time the Audit Office said, “We need to establish the risks arising from any real or perceived conflicts of interest, how they have been managed and the extent to which appropriate declarations of interest have been made.”
The value for money review follows the National Audit Office’s scathing review of the UK government’s next generation broadband programme overseen by Broadband Delivery UK (BDUK). The NAO said there was no clear way to assess whether taxpayers would see value for money, and the £1.2bn they were giving BT would strengthen BT’s monopoly.
The review also follows a damning critique of the Superfast Cymru contract with BT by broadband consultant Richard Brown. “BT will deliver exactly what it contracted for, which is 95% of homes passed,” he said.
BT’s local network subsidiary Openreach is expected to lay 17,500km optical fibre and install around 3,000 new fibre broadband cabinets in parts of the country not covered by BT’s commercial plans. The government hopes to cover 96 per cent of the population.
Asked why the study is being done now, despite criticism of the project and its process before the contract was awarded, Moss said, “It would have been premature to carry out a review of this nature before the contract was signed – this would be straying into policy decisions which are not matters for the Auditor General, and limited evidence would have been available on the likelihood of the project delivering its intended benefits. The current timing of the study allows for a broader examination of the likely impact of the Welsh Government’s investment in broadband infrastructure.
Part of the report will compare the Welsh project with that of England. “The NAO’s work in England and that of the Public Accounts Committee (PAC) is certainly helpful in enabling us to compare the situation in England with Wales and this will be reflected in the final report,” Moss said.
The PAC has said it will recall BT a second time because it is unhappy with BT’s answers to its questions at two earlier hearings to discuss the NAO’s findings.
The Welsh Auditor General will survey around 1000 businesses and households in Blaenau Gwent and Gwynedd, the two areas where there has been “significant progress”, to see what difference access to BT’s Infinity product is making.
The general public can also recount their experiences of the Superfast Cymru programme by emailing email@example.com. The auditors will not able to take up any complaints about BT or other broadband service providers and may not be able to reply to individual correspondence, the Auditor General’s office warned.
Note: Brown has submitted a Freedom of Information request for the test data and methodology that led the Welsh deputy minister for skills and technology Ken Skates to associate himself with press claims that over 100,000 premises are now able to access fast fibre broadband as a result of Superfast Cymru.
“The houses have been tested and verified as being able to receive superfast speeds. The average download speed of 61 Mbps is also more than double the contractual minimum for the programme,” the News Wales web site said.
It then went on to quote Skates as saying, “The fact that where premises are already benefiting as a result of the programme, with an average speed three times the UK average, shows the positive impact it is having as roll-out continues.”
“I am delighted to tell you all that Dolphinholme now has hyperspeed broadband! Thanks to the ‘fusing team’ the Village Hall and the first few houses came online today. A fantastic effort by everyone concerned, those who planned, those to dug and those who did the ‘technical stuff’. A real community effort by everyone involved. Particular thanks to those who have given us access over their land, those who have invested time and money and those who have supported this is so many ways.
“Of course there is still a huge amount to do and at the Fleece meeting this evening the DB4RNAG dedicated ourselves to completing this project, which means bringing the service to all those in Dolphinholme who want it. This will of course take time, but in the meantime having the Village Hall live means that there is a facility for anyone in the Village who needs to use it.”
Thus was the news broken last night that a tiny Lancashire village overcame red tape, appalling weather, and a fear, uncertainty and doubt campaign to get future-proof, fit for purpose broadband access to their residents.
After learning that Dolphinholme, which is less than five miles from the county seat in Lancaster, was unlikely to get high speed broadband from BT in the Lancashire County Council next generation roll-out, residents resolved to dig their way to hook up with the 1Gbps network installed by B4RN.
B4RN had included Dolphinholme in its original plans, but in a later phase. Impatient villagers vowed to speed things up. This led to correspondence reported in July last year by the well-connected blogger Philip Virgo. It went as follows:
I thought you might be interested in an update on how BT is behaving around the B4RN patch.
We are busy digging towards a village called Dolphinholme (included in our list of postcodes for B4RN build out which RCBF/BT and LCC have had for a very long time). As we are getting close interest has climbed and some villagers held a meeting to see how to progress things into the village and the distribution around it.
One inhabitant of the village is very pro BT and went back to Lancashire County Council to ask for an update on where the Lancashire County Council SFBB project was in relationship to Dolphinholme.
LCC wrote back saying they were going to deliver SFBB soon and there was no need for them to support B4RN, the villager then emailed everyone saying B4RN wasn’t needed as BT were going to do it.
I responded saying the patch was in the B4RN build out and we thought we had an agreement that LCC’s build out wouldn’t overbuild us. Also that because the village was a long way from the exchange and there was no PCP then FTTC would not deliver true NGA broadband to the village.
This was apparently fed back to LCC/BT (see snippet 1/ below) and triggered what appears to be a general letter about to go out to residents, see snippet 2/ below
In view of Barry Forde’s comments, I wrote and subsequently spoke to Andrew Halliwell, Assistant Director at the Lancashire CC, overseeing the roll out scheme throughout Lancashire, and he has assured me the roll out to Dolphinholme is still on schedule to arrive sometime between September and December, 2013. In order to allay any scepticism, Andrew Halliwell has agreed to give us written assurances and I will notify you upon receipt of same.
Due to the distance from the exchange BT will use FTTP technology in order to ensure that you and your residents in Dolphinholme get the best possible service.
This means that the cabinet location will not effect the installation of fibre into Dolphinholme as this will be fed direct from the exchange to the homes and business’s.
This is excellent news for you and your residents and I will look forward to keeping you upto date with the latest plans!
With Kind Regards
Superfast Lancashire Programme Control Manager
So what do we make of the fact that BT are choosing to roll out an FTTP deployment, focused entirely within the B4RN footprint targeting the core of a village we are digging into?
Also that they can find the resources to do this between September and December, before any other bits of the county are done but coincidentally matching the time frame for our service build and go live dates . I’ve not got any data on which properties they are targeting but wouldn’t be surprised to find it’s just the easy to service core of the village and that all the surrounding isolated properties are excluded unlike our project that is 100% inclusive.
That is now water under the bridge, although people in these parts have long memories. As Dolphinhome says, “The work goes on. Tomorrow we hope to bring a few more houses online and then in the afternoon at 2:00 we hope to start the duct from the cabinet to Corless Cottages.”
But for the moment, take a bow, chaps – you deserve it.
Parliamentarians will meet tomorrow to discuss broadband policy amid growing anger and concern among businesses that almost £2bn in taxpayers’ subsidy will leave the UK in a worsening competitive position.
Digital Policy Alliance chairman Lord Erroll will chair the meeting (see below for details) that will hear from two recent papers that show that large parts of the UK will end up with broadband access one-fortieth of that of South Korea, and far behind France, Brazil and China by 2017, the deadline for the government’s current broadband spending plans.
The report from Digital Business First (DBF) flatly contradicts Ofcom’s recent finding that the UK leads Europe in high speed broadband. In an open letter to Ofcom CEO Ed Richardson, the DBF said, “When ranked against all 27 EU states (not just the five Ofcom conveniently chose for the sake of a headline) the UK ranks tenth, behind countries like Portugal, Denmark, Belgium, Lithuania and Latvia.
“Secondly, there are large areas of the UK (approximately 10 million homes and businesses according to the government’s own figures) that are to be supported with public funding to deliver ‘target’ broadband speeds of just 2Mbps and 24Mbps (via the BT network). These speeds are well below even Ofcom’s low threshold of ‘superfast’ broadband. These ‘have nots’, which include some of our most productive business premises in rural locations, are being left to languish in the slow connectivity lane indefinitely.”
The forum’s assertions are supported by a study of the effect of line lengths on broadband speeds by researchers at Edinburgh University. The researchers found that one in eight Scottish homes is unlikely to be able to get more than 24Mbps, and 40% of rural homes and businesses will struggle to get more than 2Mbps.
Openreach, BT’s network infrastructure division, redacts its line length information in recent public documents. However, in a 2011 report on line lengths and line costs to Ofcom, Analysys Mason said that BT had confirmed (in 2004) that its average line length (between the exchange and the premises) was 3.47km (including the dropwire length). “This provides a reasonably good reconciliation with the (2008) Sagentia analysis (3.34km average line length). The same presentation also confirmed the distribution of lengths between the cabinet and the customer, with a typical 420m length and a small proportion of lines (10%) with a very long length,” it said. Analysys Mason later calculated the average Openreach line length at 1.704km – a figure hotly disputed by Openreach.
A 2011 White Paper by Alcatel-Lucent on the use of vector technology with VDSL2, the technology chosen by BT for its next generation broadband roll-out, found that at 420m, the average download speed would be about 40Mbps, while at 1.2km, it would drop to about 24Mbps (see graph).
Figures from the Office of National Statistics show a declining trend in the construction of communications infrastructure (see graph). The ONS figures include post office buildings and sorting offices, but also exchanges and cables. This suggests that few new cables have been laid in the past 15 years, so Sagentia’s figures are likely to be reasonably accurate.
(Unfortunately, the ONS bundles sales figures for telecommunications equipment with those of computers. This makes it impossible to establish accurately what UK network operators have invested in network hardware and software.)
As noted earlier, Openreach’s capex has been steady at around £1bn for several years. But it is starting to decline as it comes to the end of its “commercial” broadband roll-out to cover two-thirds of the population, but only one-third of physical UK.
In BT’s case, Alcatel-Lucent appears to have made a convincing argument to go for vectoring over VDSL2. It said, “Reusing existing infrastructure reduces investment costs and risks. It also helps with eco-sustainability targets. With VDSL2 Vectoring, you can deliver higher speeds at about 1/3 the cost of deploying fibre. And any fibre investments to support VDSL2 Vectoring lower costs for future fibre deployments.”
But as its own figures show, this is true only where line lengths are short, and it does not appear to include any offset for reclaiming the copper and reusing the ducts.
DBF members Alex Pratt and Frank Nigrello, who represent local enterprise partnerships in Buckinghamshire and Oxfordshire respectively, accuse Ofcom of painting an “unduly rosy picture” that serves the UK badly. “It amounts to institutional denial of the need for a significant change in policy towards investment in digital infrastructure. It is leading to an unnecessary rapid regional and national decline in our relative productivity and competitiveness. It is akin to adding extra weight to handicap our businesses in what the prime minister has called ‘The Global Economic Race’.”
The DBF is highly critical of what it sees as the government’s casual approach to broadband. “Current government policy and funding has failed to bridge the superfast broadband infrastructure deficit for 35% of the UK,” it says. It attributes this to a lack of consultation with user communities; adopting the “least ambitious targets and technological means” to deliver them, and to a lack genuine incentives for investment in future-proof high speed broadband networks.
Quoting from the National Audit Office report on the rural broadband roll-out, the DBF said, “The department (of culture media and sport said) its aim was to achieve the most possible with the given funding, not to lever the maximum amount of private investment.”
It added, “The current argument between Ofcom and mobile networks on spectrum fees, with the latter threatening to reduce 4G coverage unless fees are lowered, points to a far less investment friendly approach in the UK.”
The DBF report also criticises the lack of ambition in making high speed broadband a universal service. Again quoting the NAO report it said, “The effect of designing a programme which only reaches 90% of the target area will make it more expensive at a later stage to cover the final 10%. It will also make it less commercially viable for anyone other than BT to bid, as no-one else will have existing infrastructure to bolt it on to.
“Matters are made worse by the fact that BT is preventing local authorities from publishing plans showing which areas will not be covered, which would enable other, often community-based consumers, from filling the gap and ensuring 100% coverage.
“Witnesses from the broadband industry told us that potential investment by competitors had been lost. For example, UK Broadband has spent none of the £150m it had allocated for the programme. Fujitsu had also stated an intention to invest £1.5bn which has not been invested. In total, INCA estimated that the investment that had been foregone was at least £2.7bn.”
The DBF calls for a national broadband plan and responsibility for its delivery to be moved the department responsible for business and enterprise.
“Any incoming government in 2015 should be specifying a target of at least 100Mbps for the UK ‘have nots’ within two years,” it says.
It called for the UK to re-establish its world lead in mobile communications by “adopting an ambitious ‘can do’ approach to 5G technology”. 5G networks offer the prospect of universal ultrafast (1Gbps) broadband across the UK, it said.
It also called for changes to the terms of the 4G mobile licences to ensure that the coverage obligations include a signal strong enough to deliver 10Mbps inside a home for 98% of the UK population, a voice service, and for more than one 4G mobile network to have the above coverage obligation.
The meeting takes place on 24 March at 15.10-17.00 in Committee Room 4A, House of Lords, Westminster.
The agenda is:
* Welcome and introduction by Lord Erroll, DPA chairman
* Presentation of European Internet Foundation’s (EIF) report ‘The Digital World in 2030: What Place for Europe?’ by Peter Linton, advisor to EIF board of governors and co-author of the report
* Presentation of Digital Business First’s report “The UK’s enduring broadband deficit: A divided nation – Time for an effective plan” by Alex Pratt, chairman Buckinghamshire Business First and Buckinghamshire Local Enterprise Partnership (LEP).
* Comments by Stephen McGibbon, EMEA regional technical officer, Microsoft; Peter Olson, president of Digitaleurope and head of European Affairs, Ericsson; Alexandra Birtles, head of external communications, TalkTalk Group; and parliamentary contributions with closing remarks by James Elles, MEP and EIF co-founder.
A government report into private contractors who deliver public services has suggested the government is to blame for the lack of transparency that has led to serious shortcomings in value for money for taxpayers.
“These failures have exposed serious weaknesses in the government’s ability to negotiate and manage contracts with private companies on our behalf,” public accounts committee chairman Margaret Hodge said at the release of the PAC’s report on private contractors and public spending. The report may have implications for contracts worth £1.4bn BT has signed with county councils to deliver next generation broadband.
The PAC report looked at contracts with G4S, Atos, Serco and Capita. Some, such as the G4S and Serco contracts to tag prisoners electronically, and G4S to supply security to the 2012 Olympics, have become notorious for their abuse of the spirit of partnership, in particular for over-charging.
“There is a lack of transparency and openness around government’s contracts with private providers, with ‘commercial confidentiality’ frequently invoked as an excuse to withhold information,” Hodge said.
The PAC earlier identified these traits in the BT contracts, all of which are subject to non-disclosure clauses and restrictions on speed and coverage details and financial information.
“These failures have also exposed serious weaknesses in the government’s ability to negotiate and manage contracts with private companies on our behalf,” Hodge said.
“It is vital that parliament and the public are able to follow the taxpayers’ pound to ensure value for money. So, today we are calling for three basic transparency measures:
- the extension of Freedom of Information to public contracts with private providers;
- access rights for the National Audit Office; and
- a requirement for contractors to open their books up to scrutiny by officials
“The four private contractors we met – G4S, Atos, Serco and Capita – all told us they were prepared to accept these measures. It therefore appears that the main barriers to greater transparency lie within government itself.”
Hodge said an absence of real competition had led to privately-owned public monopolies that had become “too big to fail”.
Small and medium enterprises (SMEs) had been crowded out by the complexity of the contracting process, excessive bureaucracy and high bidding costs.
Contracting had led to the evolution of privately-owned public monopolies, who largely, or in some cases wholly, relied on taxpayers’ money for their income. “The state is then constrained in finding alternatives where a big private company fails,” she said.
“We intend to return to this issue. Government is clearly failing to manage performance across the board, and to achieve the best for citizens out of the contracts into which they have entered. Government needs a far more professional and skilled approach to managing contracts and contractors, and contractors need to demonstrate the high standards of ethics expected in the conduct of public business, and be more transparent about their performance and costs,” Hodge said.
“With the government choosing to contract out more and more public services to the private sector, these issues become ever more important. This report is intended as a recipe for better services, better governance and greater openness. We hope the government will take heed of our recommendations.”