Posts Tagged ‘Digital Britain’
B4RN and Thurlestone have had their applications for funds to build fibre to the premises (FTTP) networks in remote rural areas approved in principle by BDUK, the government’s broadband delivery agency.
They are expected to receive their confirmation letters today. The only thing stopping the projects now is their local county councils.
BDUK’s approval is expected to increase pressure on Lancashire in B4RN’s case, and Devon and Somerset in Thurlestone’s case to remove the proposed coverage area post codes from their BT contracts.
BT effectively has a veto on such deals. BDUK guidance says it may choose to assess the impact of removals on its existing plans before claiming compensation for the smaller contract or proposing a new deal that includes some or all of the altnets’ areas.
Michael Armitage, who speaks for the Thurlestone project, confirmed that BDUK has made a “conditional award”. “The key condition is that Connecting Devon & Somerset (CD&S) has to agree to de-scope (exclude) the Thurlestone project area postcodes from the BT procurement, which so far they’ve been ‘reluctant’ to do.”
The Thurlestone community is to meet on Tuesday evening to compare two network proposals, but Armitage says CD&S and BT are refusing to attend. CD&S and BT plan to hold a separate public meeting on 25 January 2014, at which BT Next Generation Network boss Bill Murphy and Devon Council leader John Hart may speak.
Thurlestone plans to use money from the DEFRA-controlled £20m Rural Community Broadband Fund (RCBF) to back bank loans plus Enterprise Investment Scheme equity plus private equity to fund a FTTP network to 1,300 premises across Thurlestone and South Huish (Hope Cove) parishes. This could be extended to Salcombe and the rest of the South Hams over time, Armitage says.
Christine Conder, who has been the public face of the B4RN project, says she hasn’t seen confirmation of BDUK’s approval.
“As with all the community/altnet projects it’s the lack of data from the councils/BT that is blocking DEFRA from releasing the money. That is a fact that won’t change. Some councils release ‘maps’ but without the data they are meaningless. I believe some councils are actively working with their communities but ours don’t seem to want to. Our original plan was for eight parishes, but I believe we are up to 21-23 now wanting to join the network, and the RCBF would have facilitated that.”
That would more than double B4RN’s original footprint of around 1400 homes/businesses to over 3,000.
Funded originally along the same lines as Thurleston, B4RN has been waiting years for RCBF money to fund the bigger project.
Well-connected blogger Philip Virgo reported correspondence from B4RN’s CEO Barry Forde that suggested Lancashire had reneged on a deal to exclude B4RN’s coverage area from its £130m next generation broadband deal with BT. Project director Andrew Halliwell refused to speak to BrokenTelephone about the alleged agreement, or a controversial fleet management deal that BT has with Lancashire County Council via a joint venture, which attracted a police investigation.
If Thurleston and B4RN get their money, they will join Rothbury in Northumberland and Fell End in Cumbria, both of which have contracted with BT for their networks, as the only RCBF beneficiaries so far.
Others are trying to join in. There are reports of more than 50 RCBF applications, nearly all of which have been turned down. One of the survivors, the Northmoor, Moreton and Bablockhythe Community Broadband Project in Oxfordshire, has just issued a state aid consultation on its plans to deliver 100% coverage at >24Mbps by 2015 with RCBF backing.
“We have some 520 homes and businesses in the project area, which is now descoped from the county plan by Oxfordshire County Council,” says spokesman Graham Shelton.
Shelton’s group has worked with West Oxfordshire District Council to manage the grant and the various steps to procurement and delivery. “(Councillors) have been, and are, hugely supportive. Ours is a very rural district with 25% home working or businesses run from home, so this initiative is highly significant to support our community,” he says.
Current broadband speeds in the Northmoor coverage area vary but are often below 1Mbps when homes are far from a street cabinet, he adds.
So far he has had expressions of interest from two network operators. “There may be scope to connect with neighbouring villages which are also outside the first phase of the county plan, and it will be for the successful bidder to follow up from the community contacts that we can provide. At this stage those villages are not descoped.”
Shelton estimates that state aid intensity to be no more than 50%. That is in stark contrast to some BT contracts where the state contributes more than two-thirds of the costs, and may run above 90% in some cases and deliver less than the altnets promise, according to Malcolm Corbett, CEO of the Independent Network Cooperative Association (INCA).
It took a single question to unstitch a carefully woven fabric that pictures the UK as a global leader in high speed broadband.
Three reports have came out in the past couple of weeks that appear to justify the government’s broadband policy. One, on the domestic demand for broadband was from the Communications Chambers for the Broadband Stakeholders’ Group. Another, from SQW, reported on the economic impact of broadband to the department of culture, media and sport (DCMS), which is responsible for the UK’s telecommunications policy and implementation. BT earlier commissioned market researcher Analysys Mason to write a benchmark report comparing the UK’s roll-out to competitor nations.
The reports are well worth reading to understand the assumptions and methodologies that led to the conclusions drawn and pictures painted. Each in its own way puts the rosiest possible gloss on the numbers. SQW found a 20 to 1 ROI in terms of gross value added by 2024. BSG said the average home will need only 19Mbps by 2023, and the top 1% of homes will need only 39Mbps tops.
Analysys Mason partner Matt Yardley told a Westminster eForum audience in London yesterday that the UK coverage of high speed broadband would slightly exceed Japan’s by 2018 (see graph).
It all looked so responsible as to the use of taxpayers’ money. Only the cynical might think that the coruscating National Audit Office report on the value for money that taxpayers can expect from the £1.2bn (or is it £1.4bn?) they are giving BT has anything to do with the sudden improvement in our insights into broadband a la UK.
Then a question from Kcom’s financial director Sean Royce dimmed the glow. Referring to the graph (above) that showed the negligible perceived differences between the UK and Japanese coverage by 2018, he said, “I’m just keen to understand what your observations might be if superfast broadband was 100Mbps rather than (EU-defined 30Mbps).”
To his credit, Yardley didn’t duck it. “The EU policy objective is on take-up,” he said. “This (chart) is based on a 30Mbps definition of superfast. It would be interesting to know if these (data for other countries) were 100Mbps to the users themselves, because we know that there’s a combination of fibre to the home and fibre to the basement using VDSL (to the flat/office), but I don’t have that breakdown. But it’s pretty clear that if we took a definition of 100Mbps, then a gap would still exist.”
According to an Arthur D Little presentation to the FTTH Council Europe, in December 2012, fibre to the home or basement was available to 90% of Japanese homes, and 42.5% were connected via fibre. According to OECD figures for September that year, the average advertised broadband speed in Japan was 95Mbps.
The contract for ‘superfast broadband’ that the Welsh Assembly Government (WAG) has signed with BT will deliver less than politicians have promised in public statements, and appears to deal with BT and Openreach as a single entity in violation of a BT regulatory undertaking to “functionally separate” the two.
It also raises questions about the legitimacy of the money given to BT because of how it will be used.
These conclusions come from broadband consultant Richard Brown who has already asked the European Parliament whether the WAG can use SuperFast Cymru money to overbuild the FibreSpeed coverage area which has already received state aid.
Brown obtained a heavily redacted copy of the ‘Superfast-Cymru‘ contract after an eight month battle using the Freedom of Information Act (FOIA). He says the financial, coverage and timing details of the contract are missing, but what remans is still revealing.
He notes that while the contract is between BT Plc and the WAG, it is signed on behalf of BT by outgoing Openreach CEO Liv Garfield.
“There is a legal governance issue (imposed in theory by Ofcom) that each part of the BT group should have ‘Chinese walls’ between them to prevent unfair exposure to competitive information leaking from one wholly owned subsidiary to another,” Brown says.
“There is a fundamental concern that if Openreach is supposed to be a functionally separate organisation, and the CEO of Openreach is the signatory to the contract then information must (by definition) be being passed between Plc and Openreach, in a manner that has been expressly forbidden by the legal undertakings given to Ofcom.”
Brown says WAG ministers are guilty of overpromising in public what the contract will deliver in terms of speed.Ofcom has accepted the European Commission’s definition of “superfast” to mean download speeds of at least 30Mbps.
“The Welsh Government have not contracted BT to enable the delivery of superfast broadband to premises in Wales, simply that the core infrastructure (exchanges and cabinets) will enable a measurement of premises passed to reach a total of 95% for up to 24Mbps speeds,” he says.
This view is confirmed in Clause 21.4 of the contract: “The Grantee acknowledges that the Welsh Ministers will not pay any contribution or subsidy to the Grantee in respect of the Last Drop Connection” ie, the link between the street cabinet and the premises. This rules out WAG support for any fibre to the premises.
The contract commits BT to meet three targets by 30 June 2016 or at the latest by the ‘Drop Dead Date’, which has been redacted:
- 90% coverage of all premises in the ‘intervention area’ at >30Mbps PPiR and a minimum of 2Mbps CIR (committed information rate)
- 95% at >24Mbps with a minimum of 0.5Mbps CIR
- 40% coverage with >100Mbps with a minimum of 10Mbps CIR.
Brown says Target 2 is dismaying. “At no stage have the ministers ever claimed anything lower than 96% coverage for superfast broadband under this contract. It is clear that there is a degree of wishful thinking by the ministers that BT will choose to deliver more than they are contracted to do.”
Brown estimates 30,000 homes and businesses may be disappointed if BT fails to meet the 96% coverage target claimed by ministers. No-one knows who they might be because the post codes of the coverage area are secret.
Brown further believes there is a difference between what the WAG told the European Commission it wanted state aid permission for, and what it is buying from BT. The European Commission’s 2005 decision on state aid in the case of UK’s Rural Broadband Access Programme made it clear that only capital costs are eligible for state aid.
It said “Eligible capital costs such as investments in communications networks and equipment necessary to provide the requested broadband services have to be directly attributable to the project and incurred during the period of the Broadband Service Agreement. No operating costs will be financed.”
According to Brown, the works that are required under that contract appear to enforce requirements on BT that are explicitly not being paid for.
The Superfast Cymru contract requires BT to supply “Operational Works” that consist of maintenance and wholesale services and the sales and support of wholesale services.
Maintenance covers “updating, maintenance, fault management, performance optimisation (when required) and capacity augmentation.” Wholesale services covers “services to enable retail service providers to provide retail services over the network.”
“The inclusion of the clauses compelling BT to deliver such ‘value added’ services, as opposed to them being part of the funded delivery, lends weight to the likelihood that the ministers have assisted BT in being as tax efficient as possible,” Brown says.
Brown believes taxpayers will have to pay BT’s costs to sell them broadband. Clause 16.6 states “…The Welsh Ministers shall only pay Financial Contributions in respect of those marketing activities that the Welsh Ministers have approved in accordance with the Marketing Plan.”
This clause is wholly inappropriate, says Brown. He says Page 4 Section B makes it clear that the grant is a capital grant to BT on the grounds that infrastructure is being purchased.
“Such a commitment by the Welsh Government gives BT a disproportionate market advantage over other wholesale providers, and as such would be considered a significant influence into the market dynamics.”
Brown questions how much money BT will actually contribute to the Superfast Cymru project. The contract caps The WAG’s contribution at £195m. He notes BT has indicated its total investment in Welsh broadband, including its commercial rollout, is £220m. At Clause 21.5 the ministers “acknowledge and accept that the Grantee has made a contribution of a sum at least equal to the Maximum Grant.” That suggests BT’s extra contribution to Superfast Cymru is just £25m.
On the question of VAT, at Clause 21.11 WAG and BT agree between themselves the the contract does not cover payment in consideration of services to the ministers and that the deal is therefore exempt from VAT.
“BT are compelled to deliver wholesale services as a result of this contract (even to the extent that the Ministers have chosen to engage in price manipulation in the market space). Wholesale service provision as a requirement of the contract, does not allow for the contract to be considered as a ‘capital investment’ only contract,” says Brown.
Summing up Brown says the 96% coverage ministers claim will be delivered “does not represent a percentage of homes and businesses that will receive superfast broadband/fibre broadband. The measurement is solely on premises passed. Premises passed is a measurement of presumed capability that considers only the core infrastructure.
“This utterly ignores the capability of the line between the exchange/cabinet and the premise to deliver the faster services.”
Brown referred to the Aus$24bn Australian National Broadband Network, which also used premises passed, and which the head of BT’s NGA rollout Bill Murphy has branded a failure on Twitter.
Brown says “In August the industry press was awash with headlines … which suggest that there are approx. one third of all the (Australian) premises passed that are unable to gain access to the increased service speeds.
“Premises passed is simply not a measure of the amount of the population that will be able to gain access to improved services. It is simply a measure of the capability of the core network – something that will not change Wales’ future, but will certainly enhance BT’s.”
The Welsh Assembly Goverment (WAG) is looking for ways to allow its state-aided BT-supplied £425m Superfast Cymru project overbuild the 14 North Wales business parks served by the FibreSpeed wholesale network. If a way is found, taxpayers will be paying twice to provide high speed broadband to the area.
FibreSpeed’s physical infrastructure is owned by the WAG, but supplied and operated under a 15 year contract by FibreSpeed, a Geo Networks subsidiary. The business parks and industrial estates on the FibreSpeed network were excluded from the Superfast Cymru plan because they overlapped.
In a letter to Assembly Members, economy, science and transport minister Edwina Hart said a change in the guidelines governing state aid for broadband may allow the overbuild.
“I have commissioned a technical and legal review to consider whether it is possible to provide support for Superfast Cymru in locations already served by FibreSpeed. I hope to provide an update on this shortly,” she wrote on 12 November.
The European Commission gave permission in February 2006 for the WAG to use state aid to commission FibreSpeed. At the time BT’s prices were 2.7 to 7.2 times more expensive than London for the same service (see Note below). This was more than local businesses could afford, the WAG said.
“The EU regulations on state aid for broadband which applied at that time were interpreted as meaning that Superfast Cymru could not be supported in addition to FibreSpeed in those areas directly covered by the State Aid notified FibreSpeed footprint,” Hart wrote.
The WAG earlier refused to allow FibreSpeed to increase its footprint, and refused to answers questions about why it allowed part of it to lay unlit. A Freedom of Information request revealed 126 businesses were using FibreSpeed in June 2011 .
She noted that a number of ISPs are using FibreSpeed links to backhaul wireless broadband connections to homes and businesses across north Wales.
“Many of these ISPs’ customers have benefited from the Broadband Support Scheme to cover the cost of their connection. The beneficiaries of the Broadband Support Scheme aid are the end users, not FibreSpeed nor the retail ISP, so there is not a State Aid issue for these telecoms organisations as a result of the scheme.”
However, Hart allowed ISPs to be paid directly after confusion over who should get the up to £1,000/home subsidy.
Note: The WAG used a BT quotation dated July 2005 for fibre-based services to a site in North Wales to support its claim that the costs were prohibitive.
|Symmetrical connection||Installation fee||Annual rental|
Source: European Commission 22 February 2006
After analysing financial information BT must by law provide to the regulator Ofcom because it has “significant market power” i.e. an effective monopoly in certain markets, Frontier Economics (FE) found that returns on BT’s regulated services were consistently above the rate required to compensate investors, (the weighted average cost of capital as determined by Ofcom), and that wholesale prices could have been on average 10% lower over the period.
The report corroborates an earlier finding by Wik Consult in support of TalkTalk’s complaint to Ofcom that BT indulges in a “margin squeeze” by overcharging for wholesale products. Wik found that Openreach’s costs to build its FTTC network are £4.39 per line per month. BT Openreach charged resellers £7.40 or £9.95 depending on the bandwidth provided.
FE, a top 10 European economic consultancy, is chaired by former UK civil service boss Gus O’Donnell, who is widely known by his initials. On taking over as FE’s chairman in July he said he had come to respect FE “hugely”. “Not only is Frontier at the forefront of applying economics to tough public and private sector issues, it has an internal culture that is second to none.”
The FE report, The Profitability of BT’s Regulated Services, was commissioned by Vodafone. It shows that regulated wholesale prices would have been 10% lower on average, had they been set such that BT had earned a return at the benchmark level set by Ofcom. Because they weren’t, BT was able to earn on average an extra £600m/y for the period.
It found Ofcom is aware BT has been able to earn returns in excess of its cost of capital. It quotes Ofcom’s 2013 consultation on the fixed access market (now being assessed) saying, “BT’s reported profitability was significantly in excess of its cost of capital. We believed that this was prima facie evidence that wholesale charges for ISDN30 might be above the competitive level.”
FE also found that BT had to repay customers for overcharging. “For some markets where BT had cost orientation obligations, BT has been found later to have set prices above a cost oriented level and has been required to make repayments to the purchasing communication providers. The overcharges include £151m for certain Ethernet services and repayments of £42m for certain partial private circuit services.”
FE notes several potential reasons for BT being able to earn regulated returns above its weighted average cost of capital. These include
- differences between Ofcom’s and FE’s estimates of BT’s cost base
- some prices are based on costs that do not directly reflect BT’s actual costs
- BT may price services above its fully allocated costs
- Ofcom may have set RPI-X% charge controls too low, and
- some costs may have been allocated to the wrong service.
“Further analysis is required to understand which combination of these reasons may explain the results shown above,” FE said.
If BT is the Roman empire, then Tove Valley is looking like a small Gaulish village filled with indomitable villagers.
Tove Valley may soon be the only one of the six proposed rural broadband projects invited to talks with culture secretary Maria Miller to get funding, and BT is so determined to get it to throw in its lot with the monpolist telco that a BT manager has at best misrepresented an earlier rural project.
The Abthorpe Broadband Association (ABbA), which has run a wireless broadband service in the Tove Valley area in Northamptonshire for 10 years. Following discussions with the local parish council, it has asked DEFRA/BDUK for money from the £20m Rural Community Broadband Fund (RCBF) to fund a superfast broadband project, Tove Valley Superfast Broadband (TVB) . It has also asked the county council to cut out its postcodes from the proposed BT coverage footprint.
The service, which went live in May, is based on a fibre optic feed into the Lois Weedon school. This is then transmitted via Wi-Fi to nearby villages and properties. TVB is charging £120 a year for up to 30Mbps, plus £175 for sign-on and equipment.
Following a meeting between Giles Ellerton, business development director NGA for BT Group, and TVB chairman Eric Malcomson, Ellerton wrote to Malcomson on 14 June 2013 to confirm the risks of going it alone. BrokenTelephone has seen the letter, which is marked “Strictly commercial and in confidence”.
Ellerton wrote, “If Tove Valley Broadband is not able to secure an ISP partner to offer value added services to end users, there is a real risk of a digital divide occurring again among the different communities in which neighbouring communities will have access to a range of services offered by a choice of ISPs…BT Retail(which manages BT Sport) has not to date used networks similar to Tove Valley Broadband network because of the costs and complications as discussed… Experience has shown that where independent small fibre networks have been deployed, large national ISP’s (sic) have failed to engage or use the network for the reasons already discussed.”
(This is the same issued highlighted by New_Londoner, believed to the Twitter ‘handle’ of Openreach CEO Liv Garfield, in relation to fibre altnet Gigaclear in an ISPreview interview in which it claimed to have had more than 400 enquiries.)
Ellerton went on to say that if Northamptonshire agrees to cut the Tove Valley postcodes out of the BDUK intervention area (the area which BT is contracted to supply) the change would be “irreversible”. If the project was later found to be “not compliant” with state aid funding rules, ABbA would be responsible for repaying DEFRA in full.
“In the case of an application by the Rothbury community in Northumberland for the RCBF scheme, it was felt by DEFRA that the financial risk of failure by the operator (Grey Sky (sic) Consulting) was too great and the funding conditions required that the project then had to be novated (a new contract substituted for the old one) into the Local Authority BDUK project.”
GreySky’s CEO James Saunby concurs with the risks BT identifies, but provide a different picture as to what happened.
“Although GreySky acted as the ‘accountable body’ throughout the development of the project, we are a consultancy company. With the addition of the RCBF funding, the project took on a scale that would never have been appropriate for GreySky to take any financial risk associated with its delivery,” he says.
“GreySky is a consultancy, not a service provider or network operator. To achieve the preferred solution, the council needed to take responsibility for the project. Because of the way the project had developed, this presented some challenges to the council. This solution (novation) was encouraged by Defra as a means of most effectively managing the risks of the project. However, I am not aware of any statement from Defra that ‘the funding conditions required it.’
“It is also not clear to me that this would apply to other projects where they had been developed by communities with the intention from the outset of maintaining an ongoing involvement with the project.”
BT did not respond to requests to explain its use of the language used in Ellerton’s letter to ABbA.
Ellerton wrote that BT’s solution for Tove Valley is to keep all but “the final 10%” of homes inside the BDUK coverage area, and to use RCBF money “to go as far as possible” into the remainder.
“The community can (then) use a Build and Benefit model to provide payment in kind through items such as self-dig or access to way-leaves. You might also be able to contribute through your own locally branded Demand Stimulation programme to achieve 60%+ take up through a pre-registration exercise. A final option could be the community provides private funds to procure a fibre cabinet(s) to service the Tove Valley Broadband project area, along the same lines as Islip in Oxfordshire.”
Malcomson referred BrokenTelephone to a flyer prepared for the 2013 TalkTalk Digital Heroes awards in which he said the project had already connected more than half the 400 potential customers in its area at speeds above 30Mbps. “Supplying 200 households and businesses reflects the levels of take up we predicted in our business plan. It goes to show the demand there is for superfast broadband.”
Nearby villages have asked to join the Tove Valley scheme. “Bradden and Helmdon would nearly double the potential size of our market, but the community model we already have in place will work on a larger scale. It will also give us the opportunity to significantly increase our bandwidth and supply yet faster broadband. The future is very exciting.”
BrokenTelephone is grateful to Patrick Cosgrove for assembling the following reports of wide-spread and growing anger with the politicians, civil servants and operators responsible for the UK’s next generation broadband programme, especially in rural areas.
In a letter on behalf of the South-west Shropshire and Marches Campaign for Better Broadband, Cosgrove wrote to subscribers as follows:
1. WHERE IS THE LEADERSHIP ON RURAL BROADBAND (1)?
The agitation over rural broadband seems to be moving to Westminster. And not before time.
We’re quite used to Lib/Dem MPs breaking ranks within the Coalition but, with the exception of Europe, not so often Conservative MPs. That seems to be changing now with respect to the countryside and the cross-party Fairer Funding Campaign (see http://www.rsnonline.org.uk/politics/mps-pile-on-pressure-over-rural-funding), of which the broadband issue is part. Put it this way, if you were in government, large numbers of your rural voters were thoroughly fed up with the reality of no decent broadband in the foreseeable future and many of them were stampeding in the direction of UKIP for a whole host of reasons (see http://www.spectator.co.uk/features/9069211/rural-revolt/), wouldn’t you do something about it with an election starting to loom? Despite David Cameron’s staunch defence of BDUK’s rural broadband programme, and Maria Miller’s shake-up of BDUK management, it seems that even Conservative MPs are starting to publicly question matters.
This is what John Glen (Conservative Salisbury) said on 31st October: “I thank the minister for that answer (to a general question about the progress of rural broadband roll-out plans), but what do I say to the local authority and residents in village such as Pitton who believe they are in the percentage that will not qualify for the imminent roll-out through the BT deal? They want to be free to develop new community-based solutions with alternative providers, as they anticipate they will not get anything from BT for a long time.”
To which the minister, Ed Vaizey, replied, “I am happy to meet my Hon Friend to discuss any issues. The Rural Community Broadband Fund (RCBF) is designed to support community broadband projects that the programme is no reaching.” To which we say, “But we know that the RCBF money is languishing in Europe because any application has to confirm that it won’t overbuild on BT’s intended infrastructure, only BT won’t tell anyone with any precision where they are going to put that infrastructure.”
Shortly afterwards, Anne McIntosh (Thirsk and Malton Conservative) asked, “What will my Hon Friend say to the 5% of those living in the hills, particularly farmers, who will not have access to superfast broadband by 2016? Will he implement the Select Committee report recommendation that they be given advance warning, so that they can make alternative arrangements to those on offer from BT?” To which Mr Vaizey replied, “As I have said repeatedly, it is up to local authorities to publish their local broadband plans and I am delighted, particularly after the Secretary of State wrote to them, that many have now done so. People in Wiltshire and Yorkshire will know where the project is rolling out”. To which we reply, “Scroll down to the next article to see what a farce that is.”
Then Philip Hollobone (Ketttering, Conservative) said, “It seems to me that BT is a big company that sometimes does not treat small communities very well. May I draw to the attention of the Minister the village of Rushden in my constituency, where residents are complaining that they are not getting the the proper broadband they deserve, despite their best efforts”. And Mr Vaizey replied, “I hear what my Hon. Friend says. BT is a big global company that we should be proud of, but from time to time issues will be raised by our constituents. I am happy to meet him to discuss the problem in detail”. To which we reply, “It’s not just Kettering, Thirsk & Malton and Salisbury. It’s the whole country, including 1,208 people in rural Shropshire who signed a petition making the very same points, and 31 parish and town councils who are also very unhappy.”
We desperately need some strong leadership on this at Westminster as it’s flying in the face off all reason to declare that everything’s fine when it plainly isn’t. A little more honesty and a lot more action would be a great help.
2. DID THE MINISTER SAY PUBLISH LOCAL BROADBAND ROLL-OUT PLANS OR DIDN’T SHE? ?
Knowing who is or isn’t in line for having their broadband upgraded is essential for communities that want to make alternative arrangements. If you don’t know, you can’t apply for public subsidy such as DEFRA’s RCBF grant in case it ends up double-funding an area. Even if you don’t want to apply for funding and you might have sufficient people to make it a viable proposition, alternative broadband providers are not going to invest in your area unless they are certain that BT won’t be operating there in the future, and no-one will tell them.
Here in Shropshire we sent a Freedom of Information Request to Shire Hall asking for a detailed broadband deployment map. They gave it to us but it didn’t tell us very much. We’d seen the Public Accounts Committee recording where Sean Williams of BT said that there was no reason why such information shouldn’t be available, and then we read that Maria Miller of DCMS had said she was “keen to see this information made available” so that other broadband Internet Service Providers and community groups could “determine whether it is worth their while to develop local broadband projects to fill in gaps” so we’d hoped for something a bit more precise. Later we learned that FOI requests were being sent to local authorities all across the country and either receiving similarly opaque answers or, as in Devon’s case for example, were told that they daren’t publish for fear of being taken to court by BT, their so-called “partner”.
Now Cumbria County Council has told Computer Weekly, “The … matter was raised at the Public Accounts Committee (PAC). However, subsequent clarifications issued by Maria Miller’s office defined what BT meant by information that could be shared. The list of postcodes to which you refer, called the speed and coverage template (SCT), is excluded. BT considers that (it) is commercially sensitive.”
This decision could leave community-based broadband schemes schemes in limbo for several years if they were hoping for RCBF money (which won’t be there for much longer), and no chance of alternative providers plugging the gaps on a commercial basis for fear that BT will suddenly announce that they might bring fibre to those areas after all (as appears to have happened in parts of Wales and Worcestershire, and probably elsewhere). Meanwhile BT has added to the confusion by saying that it remained happy to hand over the details for release by local councils. It seems that the Department for Culture, Media and Sport (DCMS) has chosen to shirk responsibility for the mess by saying that it was ultimately a decision for BT and the local authorities.
Interestingly, North Yorkshire was a pilot area for rural broadband, and it seems that its contract with BT was different because it can publish anticipated deployment to post-code level (see next link). Therefore some bright spark at BDUK or DCMS must have agreed to a tightening up of all the local authority contracts that followed the pilot. It would be great if we had a map like this.
IT SEEMS THAT SOME LOCAL AUTHORITIES HAVE HAD ENOUGH?
Cumbria County Council and Devon have now spilled some of their beans. We wonder if this was code for “We’ve been stuffed by BDUK and BT so can’t say too much, but please read between the lines”. After all, what local authority in their right mind wouldn’t want 100% of their residents to have good broadband, or would want the degree of continuing aggravation that’s resulted?
Refreshingly, in Lancashire where there is still two-tier local government and a thriving community broadband scheme (B4RN) that doesn’t appear to get on with BT too well, Lancaster City Council’s Scrutiny Committee has asked Lancashire County Council to:
1. Request that BT as soon as possible, produces a clear roll out programme for its superfast broadband in the Lancaster District to enable other providers to work in areas not covered by the BT programme
2. Seek immediate permission (!) of BT to provide a clear statement of the terms of their joint agreement
3. Request the removal from any future rural broadband contracts with BT that are on a non-disclosure agreement basis to facilitate openness and transparency.
(Plus more – see this link for the full story: http://www.ispreview.co.uk/index.php/2013/10/uk-gov-creates-confusion-bt-bduk-broadband-coverage-data.html
West Oxfordshire District Council, another second-tier local authority, also seems to have had enough, but they’ve been very polite about it so far.
We will contact them to see if we can learn anything from their approach.
WHERE IS THE LEADERSHIP ON RURAL BROADBAND (2)?
Therefore, the situation isn’t just bad, it’s actually worse than before the rural broadband contracts were signed with local authorities. Up until then communities could apply for RCBF money, now there’s no point. Up until then alternative broadband providers were moving into new areas but now they are not (or if they are they’re keeping it secret – what madness!). And to make matters worse, BT, Sky, Virgin etc have been signing large numbers of people up to their entertainment and sports packages, irrespective of whether these customers have superfast broadband or not, so the whole system is starting to slow up because too many demands are being made of it.
We repeat, “Where is the leadership?”
Disclosing the terms and conditions of BT’s £425m Superfast Cymru contract with the Welsh government would prejudice BT’s competitive position and create expectations that, if not met, would hurt BT’s reputation and share price, says the head of Wales’ ICT Infrastructure Delivery, Simon Jones.
Jones was responding to a complaint to the Information Commissioner’s Office under the Freedom of Information Act (FOIA) from Richard Brown, director of Wispa, a Welsh broadband consultancy. Brown had earlier been refused any information related to the contract, the biggest and most expensive single next generation broadband project in the UK.
Jones wrote to Brown saying, “Where possible, the Information Commissioner prefers complaints to be resolved by informal means, asking both parties to be open to compromise. With this in mind, I have reviewed your request and decided that with the passage of time, I am now able to release some of the information…
“The information that has been redacted is:
1. Terms and Conditions clauses:
a. 7.14 (cost per premise cap)
b. 18.4 – 18.8 (retentions)
c. 18.10 (loss of funding)
d. 20.1-20.2 (drop dead date)
e. 24.1 (limitation on liability)
2. Schedule 2 (Targets)
3. Schedule 2, Annex 1 (The Grantee’s completed Project Plan)
4. Schedule 4 (Postcode data – full lists of postcodes)
5. Schedule 5 (Testing and Test Criteria)
6. Schedule 6 (Eligible Costs and Financial Information)
7. Schedule 8 (Milestones)
8. Schedule 12 (Clawback)
9. Appendix 1 (Initial Documents)”
Jones put forward various reasons for not disclosing the above information.
“Releasing information on the location of sites and hosting protocols for internet websites would be likely to make the network vulnerable to e-crime,” he said.
He acknowledged a public interest in the information. “Release of this information would also help the public to find out where the network is located and how it could be served with broadband services.”
But this had to be balanced against the potential harm of releasing it.
“The release of exact locations of infrastructure deployed would likely increase the risk of theft and/or criminal damage to the network. There have previously been a number of attempted thefts of network assets, with one attack breaching the security in one location. There have also been acts of criminal damage on several locations in the past which were investigated by North Wales Police. This resulted in significant coststo repair the damage caused. Release of information on asset locations would be likely to increase the risk of further attacks.
“In the absence of a strong competing public interest in the release of this information, I believe the public interest arguments identified for non-disclosure outweigh those in favour.”
Turning to the confidentiality aspect, Jones said the information was protected by Section 41 of the act.
“…the information which is exempt under Section 41 was inserted into the contract from documents that were originally provided to us by BT in confidence as part of the competitive dialogue procurement process during the bidding stage. A key concern of bidders in competitive dialogue procurement is the protection of commercially confidential information. Given the sensitive nature of this information, I am satisfied that disclosure of this confidential information would breach confidentiality and as such, the confidentiality of the information should be preserved…”
Jones went on to say that releasing the details would be prejudicial to BT’s commercial interests because it could be used by competitors.
“BT is still actively competing with other companies to win similar business. There is a pipeline of opportunities currently available for BT to bid for in order to provide similar services to other public authorities. Additionally, some of the redacted information, if disclosed, would reveal BT’s strategy for products that are not yet launched.
“The redacted information may also create an expectation/reliance by BT’s national Communications Providers that such products are or will be available when BT is at a stage of the project where there is still reasonable uncertainty as to the timescales for their delivery. It is likely that failure to meet these expectations would be damaging to BT’s reputation and thus affect business and share price. Disclosure of this information would therefore be highly prejudicial to BT’s competitive position in relation to these opportunities and future business and I believe the resultant harm to BT’s commercial interests (should this information be released) would be substantial.”
Jones said the public has a right to know that the Welsh government is investing public money wisely, and that the award of public sector contracts is fair and within the rules. But he believed the public is interested only in the “wider detail of the contract rather than the detailed financial and operational information”.
Jones said that suppliers might be put off selling to the Welsh government if the details of their proposals came out.
“I am satisfied that disclosure of the redacted information would be likely to result in BT failing to compete in the market place and thus would be likely to prejudice its commercial interests. Whilst the information may be of interest to those working in direct competition with BT, I cannot see any wider public interest in releasing the redacted information. As such, I have concluded that the public interest in withholding the redacted information outweighs that in releasing it and this exemption is therefore engaged.”
If one accepts this view, then one must also accept that BT’s competitors are entitled to the same protection. This is not the case.
In May BDUK, which is overseeing the broadband delivery programme, issued guidance to local authorities who are considering applications from community network operators or altnets for funding to cover the “Final 10%”. These guidelines state plainly that the supplier who wins the main contract under the BDUK procurement framework has a right to scrutinise proposed projects to assess their impact on the main roll-out.
So far, only BT has won any such contracts, and Fujitsu Telecom, the only other eligible supplier, has long since withdrawn from the market.
One might argue that the Superfast Cymru contract is a different beast from the average BDUK county procurement. True, but that is sophistry. BT’s network does not stop at the border; nor do its business practices.
According to the guidelines, if an altnet proposal partially covers premises in the “90%” then the altnet, the Local Authority, DEFRA and BDUK have to establish if the BT project can be “re-scoped” to cover other areas defined as “no-build” in the SCT (Speed and Coverage Template that the LA agrees with BT). The LA, “at its sole discretion”, can ask BT via a “change request” to include the altnet’s proposed coverage footprint in the main roll-out.
If the LA decides not to raise a change request, then the altnet can go ahead only “where it can be clearly established that premises are eligible premises for funding under the RCBF”. But the information it needs to do that is protected by the non-disclosure agreement between the LA and BT, and, according to Jones, by S41 of the FOIA.
If the LA goes ahead with a change request, it has to ask BT to assess the impact of taking the altnet’s coverage footprint out of the main contract. To do this, BT would need to know precisely where and when and what its would-be competitor plans to build, without disclosing its own plans.
You might think that gives BT an unfair competitive advantage; we could not possibly say.
The Valuation Office Agency, which is responsible for valuing non-domestic property for business rates purposes, has written to network operators asking for details about their “occupation” of wireless broadband and fibre networks.
Operators already pay business rates taxes on sites and masts used for mobile networks and microwave backhaul ; this is a long-expected attempt to subject fixed wireless broadband networks’ passive components to business rates taxes. Previous attempts have foundered because of a dearth of information available to the VOA.
BDUK has pronounced itself happy with the results of its two month pilot of a voucher scheme to increase small business connectivity in cities, even though only 35% of requests for funding led to a quotation.
The original £150m SuperConnected Cities project aimed to set up fibre to the premises (FTTP) networks in 22 cities. Following legal objections from BT and Virgin Media, this was replaced with the voucher scheme. The scheme allows SMEs to apply for grants of up to £3,000 to fund a connection to a broadband service that gives “step change” in the speed received.
The scheme was red-lighted (deemed in imminent danger of failing) in a Cabinet Office report last May.
The £2.25m pilot ran, largely unpublicised, from the start of August to the end of September in Belfast, Cardiff, Edinburgh, Manchester and Salford.
“The supply chain supporting the use of vouchers is either competitive or regulated so this will prevent distortions to competition,” BDUK said.
BDUK reported 59 suppliers registered, though some were inactive prior to the scheme. Sixteen didn’t meet the registration deadline, and a further 19 said they were interested in Phase 2 of the project.
There were 690 voucher requests, of which 443 conditional offers were made (12 rejected), leading to 240 quotations from 28 suppliers.
BDUK declined to give a breakdown of the location of the requests, or many contracts were signed, or the amounts committed.
However, Metronet, a fibre-wireless ISP in the north-west, claimed 13 orders from the voucher scheme. This earned the firm a visit from communications minister Ed Vaizey during the recent Conservative Party conference to learn the secret of their success.
MD James McCall is on record saying businesses depend more on having a reliable service than raw speed.
BDUK said, “Some cities and suppliers have noted that some SMEs fed back that they value the quality of service elements of business grade services and that a service under 30Mbps can represent a significant upgrade in capability. We will consider whether there is an opportunity to be flexible around minimum speed required for business grade services.”
It added, “From our perspective and that of the (European) Commission the scheme the market test have (sic) been successful.”
BDUK is holding two industry days to provide feedback and discuss phase 2 on 18 and 21 October in London. It will present its findings to the European Commission Case Team on 31 October and to the Commission on 6 November. Ministers will decide whether to go to phase 2 shortly after.