Archive for the ‘Politics’ Category
BT is a great British company doing a great job for Britain. We know this because communications minister Ed Vaizey said so in parliament.
He was answering a question from one of his predecessors, Stephen Timms. Timms wanted to know why the entire rural superfast broadband fund is being handed to one company—to BT. “BT is now behaving like any monopolist that has everyone over a barrel, and we have heard about the consequences from all sides this morning. Why has competition been forgotten?” he said.
Vaizey replied, “It just so happens that BT has won the contracts, and I reject the suggestion that it is behaving like a monopolist. We are getting value for money for our contracts, and BT is a great British company doing a great job for Britain.”
He complimented Timms “who did so much to promote competition. As a result of that, BT has just a 30% share of the broadband market, and the market share of the historic incumbent in the copper broadband market is one of the lowest in the world. That is a testament to the right hon Gentleman’s great work, but we are carrying it on. We made sure that our process for rural broadband was competitive.”
As Francis Urquhart might say, “You may think that; I couldn’t possibly comment.”
Only 20% of the lines in Cambridgeshire’s new fibre to the cabinets (FTTC) cabinets will be enabled for superfast broadband (SFBB). If this is the case in the rest of BT’s FTTC roll-out, it suggests that BT’s claims that 15 million homes have access to SFBB are wide of the mark.
The revelation came at a feedback meeting to the Cambridgeshire Digital Champions on the county’s new contract with BT for next generation broadband.
According to notes taken by Mel Bryan at the meeting, Annette Thorpe, BT’s regional director for the east of England, told the meeting that BT would apply the same criteria for populating DSLAM cabinets under the CCC (Cambridge County Council) contract as under the commercial areas. “DSLAM cabinets (which come in two sizes max. capacity 256 lines or 288 lines) will initially only have 20% of lines in the PCP offered SFBB,” Bryan wrote.
Almost two years ago Kevin McNulty, Openreach’s general manager for next generation access commercial partners, told Br0kenTeleph0n3 BT’s NGA financial plan was based on a breakeven period of 10 to 12 years and a 20% take-up.
Bryan reported Noelle Godfrey, programme director of Connecting Cambridgeshire (CC), said CCC expects 90% of premises will be covered by SFBB speeds above 24Mbps plus a further 8% of premises will be covered by “fibre” below 24Mbs. 2% will receive at least 2Mbps. Where this speed is measured is not defined.
Bryan wrote, “This figure of 98% SFBB is somewhat misleading – only 20% of 98% will initially be able to receive SFBB. As customers in the Commercial Areas have already discovered, they may have to wait months post the initial DSLAM installation before BT adds more equipment in the DSLAM cabinet to accommodate the increased demand.”
Bryan wrote, “There are no plans to offer FTTP under the CCC contract but after heated representations from the floor who were prepared to pin their money on Annette there and then, BT /CCC agreed to look at this.”
Thorpe told the meeting the BDUK’s £6.7m contribution to Cambridgeshire had to be spent “within the life time of the current parliament” which ends on 17 May, 2015. This gives BT an installation period of just over two years.
“What happens if a general election is called earlier?” Bryan asks. “What happens post-2015 if a village DSLAM cabinet (capacity 256 lines) becomes full and another DSLAM cabinet is required? Will BT deem that commercially viable? In my village we only have one PCP serving 315 premises.”
According to Bryan, Tony Smith, BT Openreach programme manager, told the meeting “it was very difficult, at this stage, to forecast time-scales and even when BT had done their detailed planning down to the exchange level, they cannot forecast how long an installation of the fibre cables and DSLAM cabinets will take, due to the unknown condition of their ducts, planning permission in conservation areas (which most of our villages have), obtaining power supplies, permission to dig up roads and pavements, etc., etc., etc. “
The meeting heard that 20 suppliers had registered an interest in the county’s project. Only three were chosen for “dialogue” after which BT was chosen “for offering the widest coverage and best value”.
The names of the other suppliers were not disclosed, nor was the methodology by which value was measured.
The Broadband Stakeholders Group is hosting a meeting at which the Valuation Office Agency (VOA) will set out its views on the potential application of the non-domestic rating regime (aka ‘business rates’) to wireless broadband network infrastructure.
This meeting marks the start of a public consultation before the VOA publishes a Practice Note to clarify the valuation for non-domestic rates of wireless broadband network infrastructure. It is looking for inputs from industry on rental values and costs of installation.
The meeting comes less than a month after Vfast withdrew its proposal for a wireless broadband network for Tunbridge Wells, saying the VOA had told it the scheme would be subject to business rates taxes.
The VOA is the same organisation that saw fit to subject lit fibre to business rates and introduce three different ways of valuing it, two of which favour BT and Virgin Media. A recent Ofcom report on the market for >1Gbps services found the fibre tax is a serious inhibitor for investment.
Alan Bradford, head of telecoms at the VOA, will provide an update at the BSG meeting and there will be time for Q&A.
The BSG says this meeting is the VOA’s first opportunity to begin this industry consultation. However, Vfast’s reaction to its meeting with the VOA suggests that the VOA has already made up its mind to tax wireless networks. It is now just trying to fix the rate.
The meeting will take place from 10.00 to 12.00 on Monday 22 April at the Intellect offices, Russell Square House, 10-12 Russell Square, London WC1B 5EE.
The BSG thinks this will interest mobile operators, fixed wireless providers and other stakeholders with an interest in the non-domestic rating regime.
RSVP to firstname.lastname@example.org by Tuesday 16 April. Places are limited so early registration is advised.
The Financial Times has come to the belated view that the BDUK procurement of next generation access to broadband is a farce.
The trigger appears to have been Fujitsu’s decision not to compete for any of the contracts available under the BDUK procurement framework, a process that has cost taxpayers £10m to create and left BT as the sole supplier.
The formal announcement has been a long time coming, but has been anticipated ever since the Cabinet Office effectively blacklisted the company by describing it as a “high risk” supplier of government IT systems.
That description did not preclude Fujitsu, with BT the only qualified suppliers under the BDUK framework, from bidding for business.The final straw for Fujitsu appears to be BDUK’s absurd requirements for wireless suppliers of NGA broadband to rural areas.
These were published on 18 February in response to the European Commission’s sensible relaxation of the ban on wireless as a means delivering next generation broadband.
Much of Fujitsu’s business plan, at least in Cumbria, relied on wireless to get around the need to access BT’s poles and ducts. When this was ruled inadmissible, Fujitsu withdrew, leaving BT as the sole bidder in Cumbria.
The commission then rethought the ban and raised it. However, it still appears to believe that fibre to the home is the end game, but it is willing to acknowledge that high speed broadband delivered by cellular technologies such as LTE are the way to go.
This is making life hard or impossible for fixed wireless broadband providers. In its guidance to local councils regarding the use of fixed wireless in their coverage plans BDUK asks for service levels that not even fixed line suppliers have to meet.
For example, wireless providers must show that their system is capable of providing access speeds in excess of 30Mbps download, with at least ~15Mbps download speed to end-users for 95% of the time during peak times in the target intervention area.
Then it says the wireless operator must put in a fibre to the home network . “The subsidised solution must be an interim solution chosen where a fibre-based solution is not yet economically viable, and there shall be a commitment to replace non-wired connections with fibre at a later stage.”
Kijoma Broadband, which supplies high speed wireless connectivity in the south of England, says, “There is no such guarantee (on download speed) for FTTC for example. FTTC starts at 15 Mbps sync speed and as previously reported, 5 Mbps orders will be accepted via wholesale providers,” he says.
BT has doubled its original offer of 15Mbps download speeds to “up to” 30Mbps. Ofcom this week reported that the average national download speed is 12Mbps, due largely to Virgin Media’s largely urban roll-out of high speed broadband over cable TV channels.
FTTC connection (speeds) will be lower in practice due to line length, crosstalk, ISP contention, traffic management policies, and other issues, Lewis adds.
Regarding the commitment to install fibre, Lewis says, “If fibre in a low density area is viable in around five years, then it is viable now. The only time it would improve is if the rural area in question gained a large new housing estate.”
Fibre is going into rural homes and businesses, but it is due to community-based efforts such as B4RN and Gigaclear. Both face hostile responses from BT, which has consistently failed to publish precise coverage plans for both its £2.5bn “commercial roll-out” of FTTC to two-thirds of UK homes, and its BDUK-funded roll-outs in “not spots”.
As Ewhurst resident Walter Willcox notes elsewhere on the blog, even having a fibred-up street cabinet in your street doesn’t guarantee access to a high speed service because the cabinet’s capacity may already be taken up.
This should raise questions regarding the percentage of “homes passed” that can actually be served by the cabinets BT has installed so far. BT has said in the past that it would add more street cabinets if the newly installed ones reach capacity. Ewhurst’s experience is to the contrary.
BT’s legal department has sent a ‘cease and desist’ letter to the satirical website superfarce-cymru.com, claiming it breaches BT copyright and giving it seven days to take down the allegedly offending material before it starts legal proceedings.
It accuses site owner Richard Brown of copying “a substantial amount” of the content of the superfast-wales.com website, including the design of the home page and BT’s logo, “which although blurred, is easily recognisable”.
Brown appears to aim as much at the Welsh Assembly Government as at BT’s marketing hype about superfast broadband.
In answer to the question “What’s Superfast Cymru all about?” the home page says, “If we can convince you that we are doing a decent job by claiming that this is a pioneering multimillion pound programme to bring nationwide superfast broadband, there’s a chance you’ll overlook the millions wasted on RIBS, Fibrespeed, PBSA, buying Cardiff airport etc and still vote us back in.”
BT is spending some £220m inWales, with most of it going towards Superfast Cymru. The WAG is contributing £58m, BDUK £57m. with £90m coming from the European Regional Development Fund (ERDF).
The default installation will be fibre to the cabinet, which offers a nominal 80Mbps download and 20Mbps upload, but BT indicates it will also offer a 330Mbps download, 30Mbps fibre to the premises wholesale product. It aims to cover 96% of Welsh homes and businesses.
The Superfarce Cymru site reflects a sceptical view of the £425m roll out. “FTTC provides wholesale download speeds up to 80Mbps and upload speeds up to 20Mbps, so if you are a long way from the exchange or the cabinet, this won’t make any difference to the speed that you will be able to get. If you have a nice view or not very many neighbours, this won’t make any difference to the real speed you can get.”
Under the contract, the largest next generation broadband deal in the UK, BT says it will install 17,500km of optical fibre cable and around 3,000 new fibre-enabled street cabinets.
The first eight regions to benefit will be Bangor, Caernarfon, Dolgellau, Menai Bridge, Porthmadog, Pwllheli, Ebbw Vale and Tredegar.
WAG business minister Edwina Hart unveiled the first Superfast Cymru cabinet in Bangor in February.
Last week Ofcom proposed to make BT cut its prices by 11% a year for each of the next three years for very high speed wholesale services outside of London and Hull. It believes this will encourage leased line customers, mainly large enterprises and bandwidth resellers, switch to Ethernet as it will allow prices for services based on older technologies to rise modestly to allow BT recover its costs from a declining customer base.
Supporting this proposal was a report from CSMG on qualitative issues around the >1Gbps market. Its main findings about market conditions were unsurprising: BT has significant market power outside London and Hull; most cities on the UK’s ‘figure of 8′ fibre ring are relatively well provided for; the rest of country depends on Openreach, etc etc.
The respondents, 25 end users and five wholesale buyers of >1Gbps services, also volunteered comment off the ‘approved list’ of topics. Full marks to CSMG for including them in its report, and to Ofcom for publishing them even though they must have made uncomfortable reading.
The ‘unspoken’ issues include lead times to provision services, lack of physical route diversity, supply of dark fibre, business rates on lit fibre, and duct access. By and large, the comments suggest that Ofcom has failed to make best use of two of its primary policy tools, namely to encourage investment in network infrastructure and to ensure a competitive market at all levels.
“Numerous” end users told CSMG, “We have major problems with lead times – it can take three months to get a site survey, and a further three months to get installation. The whole process can sometimes take over a year, with major implications for business. There is insufficient competition outside the M25 to drive lead times down.”
Another said, “We find we have to rely on BT Openreach for laying fibre, whoever we are procuring the service from… the [network build-out] process is very slow, and it is hard to get firm dates and prices. It’s holding the business back.”
More than half (56%) were concerned about true physical route diversity, mainly to improve service resilience. CSMG noted this was because carriers are reluctant to share their route data, but one user reported having a clause in its contract that required its provider to reveal updates to its network annually. Another said BT charged a premium, “but at least they can confirm they are using a fully diverse route.”
Opinions on dark fibre were split. Some said it is relatively easily available, others that the market is “immature”. Two heavy users of dark fibre thought market consolidation will see less dark fibre on the market as the remaining carriers could choose to offer only higher margin lit services.
Six of the eight respondents who expressed concern about business rate taxes on lit fibre said they were having to take lit services rather than buy dark fibre, as they would prefer, because of the high rates of tax payable on lit fibre. Two were currently using much more dark fibre than lit, but said they may have to move back to lit services in future because of the high rates, CSMG said.
Two end users wanted more clarity regarding the use of self-managed dark fibre, especially who has to pay the rates on lit fibre. One believed he was exempt because he was using the fibre himself rather than reselling it. However, he was still having to pay an unexpected bill for three years’ rates.
One of the wholesale buyers was keen to build out more of his own fibre, but said the rates payable on lit fibre were damaging the business case.
Three interviewees believed that BT was advantaged by the fibre rates regime. This was unfair on smaller operators and end users who bought dark fibre, they said.
“The very high level of the fibre tax is a major reason why we have to limit the use of high bandwidth fibre services. We feel that the level of fibre tax which BT pays is unfair. We would like to see everyone paying the same rates as BT – or preferably, no tax at all.”
Another said, “The fibre tax is arbitrary and unfair – we do not see why smaller, more agile players should get taxed while more dominant players such as BT are given tax relief.”
A wholesale buyer said, “Costs are currently prohibitive for new entrants to the market, and for existing players looking to expand their network. In particular, the fibre tax is not helping the business case for network build-out, and gives larger players – particularly BT – an unfair tax advantage.”
Vtesse Neworks earlier took the fibre tax issue to the Appeal Court, which ruled two to one against the carrier. Responsibility for the fibre tax lies variously with the Treasury, the department of communities and local government, the Valuation Office Agency and local councils. The incoming coalition government promised to “review” the tax, but as these comments suggest, has failed to level the playing field. Ofcom may be entitled to redress any advantage that might accrue from the allegedly unfair treatment, but has not done so.
Where Ofcom has also done less than it could is in opening up duct access. It did persuade BT to introduce a new product, Physical Infrastructure Access, to allow third parties to use BT ducts and poles. However it also allowed BT to impose terms and conditions such that there has been no large-scale take-up of the product. In fact, these terms and conditions were largely responsible for seven of the nine carriers invited to bid dropping out of the BDUK next generation procurement framework .
CSMG reported, “Four interviewees, including two wholesale buyers, were disappointed at the lack of duct access available in the market, which was preventing them undertaking more widespread build-out.”
As these comments were not within Ofcom’s brief to CSMG, it is unlikely anything will come of them. This leaves us with the actual outcome – the proposed 11% price cut.
One could say it’s better than nothing. However, CSMG found that end users and systems integrators can negotiate discounts, especially where there is competition. Fifteen respondents, including all five wholesale buyers, reported being able to negotiate on price. Three won discounts of around 30% and one got a 50% cut on a dark fibre service, CSMG said.
That makes Ofcom’s proposal look like small beer indeed.
The end game for the traditional telco business model is already in play.
On 12 February the European Commission cut €8bn from its €9.2bn broadband fund. This was money that telcos expected would be coming to them to spend on fibre networks.
The next day, the ITU said, “The move to IP-based communications is irreversible – and the timescales for business models, regulatory frameworks, development cycles and infrastructure investment in the internet world and that of traditional telecommunications may be dangerously out of sync.”
And on Valentine’s Day, at the launch of its software defined network strategy, Huawei’s director of dolution marketing, Dai Libin, said telecoms operators “had to change their genes” if they are to survive. They can no longer afford to provide ever-faster performance if they cannot also reduce costs the way the computer industry has, he said.
That same day saw the official launch of B4RN, the community-funded point to point fibre to the home network in rural Lancashire. B4RN customers get a nominal 1Gbps symmetric service for a £150 connection fee plus £30/month, which you can halve if you want to give up your BT phone line and rely on Skype for voice calls.
In contrast, BT’s up to 330Mbps fibre on demand service, due out in spring, will cost £500 to connect and £38/month, plus a distance-related fee averaging £1,000. And it will be available only in BT’s fibre to the cabinet footprint. And you’ll have to hold on to your £15.45/month phone line.
Some at BT are certainly alive to the threats. Last October BT told ISPs about its new Multiservice Edge (MSE) roll-out that will see more than 500 data centres installed around the country on the “edge” of its network. This is to cope with greater consumer demand for data services, it said.
MSEs will give BT Vision subscribers a better quality experience because it cuts down the distance signals must travel. It will also improve subscribers’ experience of Netflix, Facebook, YouTube and other “over the top” (OTT) services too.
BT is also deeply involved with ETSI’s effort to standardise how certain network functions are virtualised; Don Clarke, BT’s head of network evolution innovation, is the working group’s technical manager, largely because he’s been studying the problem for the past two years.
Virtualising the network means that networks will be programmable. According to the pitch, it will be quicker and cheaper to provide and change services because all the devices in the data centre will be virtual machines and will run on very fast industry standard servers. Provisioning and changes will be done via a dashboard rather than physically patching cables and using command line instructions to install and set them up.
This situation pretty much is at least partly true already for core networks, if only because Cisco so dominates this market that it is effectively the industry standard. But this ETSI network function virtualisation (NFV) initiative is really about increasingly that agility across the entire network, even right into the home.
Clarke says his team wants to finish its initial work within 18 months. Telecom standards can take years or even decades to establish, so this urgency suggests a penny has dropped somewhere.
This software defined networking and/or NFV heralds so many changes in the traditional business models of equipment vendors and telcos that we could be at what the gurus call an inflection point. It is like the meteor that some say wiped out the dinosaurs.
It’s not the only source of change. So many subscribers are giving up their fixed line services for mobiles, or taking up cheaper offers from unbundled local loop operators like Sky and TalkTalk, Ofcom is reportedly toying with the idea that the duopoly enjoyed by BT and Virgin Media should end at the kerb rather than at the wall plug inside your house.
This could make it easier for new fibre network operators like B4RN and Gigaclear to compete with BT and VM (and may be partly why VM was sold to Liberty Global, a US-based European cable TV operator). This is because the home owner could, as they do in Scandinavia, dig his own trench to the kerb and connect to his service provider of choice. This would save the operator a lot of time, hassle and cost, around £100 per household.
There is already a robust public interconnect standard (Active Line Access), so in theory this should not be a problem.
However, BT is the monopoly fixed local access infrastructure provider in two-thirds of geographic UK. The reserved 800MHz mobile licence currently at auction will provide only a 2Mbps indoor connection. So for fibre to the kerb to happen on large scale Ofcom would have to revise the terms of BT’s physical infrastructure access (PIA) product. PIA’s costs, terms and conditions meant that none of the eight other network operators invited to join the BDUK purchasing framework for next generation access in rural areas was able to make money in competition with BT.
We can be sure BT (and other incumbent telcos) will continue to fight for its monopoly while building its replacement network. But will it run out of customers and money before the new network is fit for purpose?
If readers have some spare time on Wednesday afternoon, they might find something of interest listening to MPs on the agriculture select committee quiz witnesses on the government’s plans to extend next generation broadband to the Final Third.
In fact, parliament has it wrong; the blurb advertising the hearing suggests it is about rolling out broadband to 90% of the country. Since this is presumably about Defra’s £20m contribution to remote rural broadband , which is ring-fenced from BDUK’s £530m (or £1.5bn – you pick a number…), here’s hoping it’s about the final 10%, and that MPs are more clued up than the blurb writer.
BT is not being called to explain its plan for the final 10%. That is a pity, as it is the incumbent supplier. MPs could ask it to say, once and for all, where it intends to run fibre to the cabinet in the next three years. That would give would-be community network operator some protection against BT undermining their enrollment programmes with promises to build networks in competition, and then delaying build-out and/or providing inadequate facilities (see Ewhurst).
The select committee meets on Wednesday 28 November at 3.00pm in Committee Room 16.
The first bit is likely to be about more general topics, with rural broadband featuring from 3:50pm with Nynet CEO John Moore, and Malcolm Corbett, chief executive, Independent Networks cooperative Association (INCA) facing MPs.
They will be followed at around 4:30pm by communications minister Ed Vaizey and BDUK CEO Rob Sullivan.
The deadline for Britain’s national next generation broadband service has slipped to 2017.
This emerged the day after the European Commission agreed to approve the government’s controversial £1.5bn procurement plan after nearly nine months of argument.
Asked to clarify the amount at stake, a commission spokesman said, “In the notification we received from the UK, the £1.5 bn (is) planned for the period until 2017.”
The previous Labour government had set a 2013 target for a universal 2Mbps service. The coalition soon changed that to “the best broadband network in Europe by 2015″.
The deal negotiated by culture secretary Maria Miller a couple of weeks ago leaves Britain targeting a minimum 2Mbps universal service, with 90% of people having access to a 24Mbps service.
On the same day that it announced its approval for the BDUK scheme, the commission approved a €2bn (£1.6bn) scheme to support rural areas in Bavaria, Germany. This plans a minimum 50Mbps network for “commercial and accumulation areas”.
Neither DCMS, the government’s responsible department, nor the commission were prepared to give details of where the UK’s £1.5bn is coming from. The official statement says the amount is £530m.
Pressed on this, the DCMS said the £1bn balance will be met by local authorities. It is unclear whether it includes £150m each for the Superconnected Cities initiative and the extension of mobile broadband to rural areas. However the commission said “EU funds” were part of the package.
This detail may be included in the agreement between the government and the commission. A commission press release yesterday said that a redacted (censored) version of the agreement would be made public in due course. Commission sources say the British government is now making the cuts.
It is unclear what will be kept secret. It is believed that Brussels was unconvinced by British claims that the resulting networks would provide “open access” on a “competitive” basis. This is because only BT and Fujitsu qualified as suppliers under the framework. The Cabinet Office later labeled Fujitsu “unreliable”, effectively blacklisting it.
It is believed that there are still disagreements over the headline download speeds deemed acceptable. The commission told Br0kenTeleph0ne, “The 30 Mbps universal coverage objective in 2020 is the objective of the EU’s Digital Agenda. We consider the (BDUK) scheme will help the UK reach this objective.”
That gives the UK eight years’ breathing room. Well, not quite. Part of the deal is that DCMS will have to report to the commission on progress by March 2015.
It is unclear what sanctions the EU can impose if the UK is behind target. That will probably be a issue for the next government.
There are material differences between Westminster and Brussels over what will result from the European Commission’s approval of a blanket purchasing agreement for next generation broadband connections in rural UK.
The differences can be summed up thus, in BDUK/Commission order: ‘Superfast’ equals 24/30Mbps; Investment equals £530m/£1.5bn; Universal access equals 90 per cent/100 per cent.
These were the views either side held at the start of the year when BDUK applied for approval. Culture Secretary Maria Miller’s recent visit to Brussels did not resolve them, but it did unblock the cash flow.
According to the Commission, the total value of aid to be delivered by the scheme is around £1.5bn (€1.8bn). “This will most likely enable the UK to achieve the objective of the EU Digital Agenda of coverage of 30 Mbps networks for all European citizens (see IP/10/581 and MEMO/10/199),” it says.
The commission goes on to say the design of the BDUK scheme contains several ‘best practices’ which will help to ensure more effective, better targeted and less distortive public interventions. A national competence centre will advise smaller local authorities. Ofcom will have a “crucial role” in designing wholesale access prices and conditions.
All information related to projects under the scheme (including mapping, public consultation, tenders, aid beneficiaries) will be published on a central website.
“The UK has also committed to submit an evaluation of the scheme to the commission before 31 March 2015 and to ensure that any forthcoming scheme will take this evaluation into account,” it says.
BT can now start extending its £2.5bn fibre to the cabinet network upgrade, firstly into rural Wales and Surrey. Projects in Cumbria, Rutland and Herefordshire and Gloucestershire should follow shortly. Cambridgeshire, Oxfordshire and Highlands & Islands are busy with their procurements.
This will open up the World Wide Web as a potential marketplace for tens of thousands of small and medium sized businesses, and give them access to a wider choice of suppliers. It will allow them to take advantage of technology such as hosted applications and cloud computing, and improve the speed and efficiency with which they do business. In a nutshell, it should make Britain’s SMEs more competitive at home and abroad, and for that we should be delighted.
But the issue of whether Britain’s future networks should be built of fibre or copper is unresolved; taxpayers may have to cough up sooner than they think for a long term network solution to extend fibre to our homes and offices.