Chat-up lines in Whitehall

Professional nosy parkers like Br0kenTeleph0ne and GCHQ are always keen to know who’s talking to whom, when and about what. So it was with interest that we learn that in June culture minister Jeremy Hunt had a meeting with “Hua Wei” to discuss “telecomms issues”.

This revelation is part of the government’s transparency agenda, so that we can all, if we can be bothered, find out who’s been polishing the chairs in Whitehall and Westminster.

Equally interesting was communications minister Ed Vaizey’s visitor list. How one would have liked to be a fly on the wall in one or two of the meetings. His guests between April and June were

Authority for Television On-Demand	To discuss the smaller operators
Taylor Herring	To discuss the internet
Save Kids TV	Follow up meeting
BPI	To discuss the Digital Economy Act
Cisco. TalkTalk, Virgin Media and Fujitsu	To discuss Intellect/Cisco Broadband
Broadband Stakeholders Group	To discuss open internet issues
TalkTalk	To discuss emergency calls
BT	To discuss emergency calls
Torres Strait Delegation	To discuss the repatriation of human remains
Classic FM	To discuss the Music Review
Cable and Wireless	Catch up meeting
Ironbridge Gorge Museum	To discuss Renaissance Core Museum proposal
Ikon Gallery	To discuss possible new gallery in Birmingham
Literary Heritage Group	To discuss Literary Archives and Philanthropy
Kudos	To discuss issues around industry
Boster Group	Introductory meeting
My Cake	To discuss the creative and cultural sectors
Mulberry	To discuss the new Mulberry factory
UK Music	To discuss funding and Enterprise Finance Guarantee
WPP	To discuss arts organisation
Three and Hutchison Whampoa Ltd	To discuss Ofcom spectrum proposals
BT, TalkTalk and Universal	General discussion
Film Matters	Introductory meeting
Warner Music	Introductory meeting
Faber & Faber	To discuss businesses and activities
Touring Partnership Theatres	To discuss Regional Theatre
ACE, NESTA, TSB	Update meeting
Everything Everywhere	Catch up on Ofcom proposed spectrum auction rules
Technicolor	Introductory meeting
Fujitsu	Introductory meeting
JF Kennedy Performing Arts Washington	Introductory meeting
Finch and Partners	General discussion
Film matters	Introductory meeting
Warner Music	Catch up meeting
Faber and Faber	To discuss brand related business and activities
Touring Partnership Theatres	To discuss Spending Review
Power to the Pixel	Introductory meeting
Turner contemporary	Introductory meeting
HTC	Introductory meeting
Prudential Security	Introductory meeting
HADOPI	Introductory meeting
Critero	Introductory meeting
HiTechPros	Introductory meeting
Deezer	Introductory meeting
Alcatel-Lucent	General discussion
Vevendi	Introductory meeting
Imagination Technologies Ltd	Introductory meeting
Reach Global	Introductory meeting

Dodgy doings in defence of copyright

Music rightsholders have shown a remarkable willingness to indulge in questionable tactics to preserve and extend their control of digital content.

First we had Lord Peter Mandelson’s Corfu lunch with Hollywood oligarch David Geffen that led to the sudden and unexpected inclusion of “three strikes and out” provisions in the Digital Economy Act.

Now TorrentFreak, a website that watches the battle between rights holders, copyright pirates and other interested parties, is following the saga of how Universal Music got YouTube to take down a promotional video for Megaupload, a free online file storage service, that was going viral.

The catchy Mega Song, which features music artists like Blackeyed Pea will.i.am , P. Diddy and Alicia Keys, has been up and down and up again on YouTube as the legal arguments have flowed.

The takedown seemed possible thanks to a side deal between YouTube (owned by Google) and Universal that allows Universal to get YouTube to take down material to which it does not own the copyright.

This goes beyond the ambit of the Digital Copyright Millennium Act (DCMA), many of whose provisions are written into the Anticounterfeit Trade Agreement (Acta), which is now in the European Parliament for a vote. Acta is a rightsholder-sponsored multilateral deal that activists claim would not pass public scrutiny.

Taken together, Acta and the Mega Song case sheds an interesting light on the motives of music rights holders.  They would make rightsholders key gatekeepers in the emerging digital economy as broadband access to digital content expands.

The UK government is fighting back, somewhat, with its consultation on a new copyright regime in the light of the Hargreaves Commission report. This would allow private copying eg from a CD you own to an MP3 player, greater access to “orphan works” i.e. work for whom ownership cannot be established, and non-commercial data mining of academic works.

Perhaps most interestingly, it has already asked Richard Hooper to do a feasibility study to test a key Hargreaves recommendation, a digital rights exchange, to reduce the friction and cost of buying online rights.

On the face of it, this would be a good or better deal for artists. According to the Bemuso blog, artists might earn five pence from a 79p digital download, and rightholders 46p. The exchange would allow them to sell rights directly, and possible earn more than what they can earn via the rightholders, without having to sign away their copyright to record labels.

If government has been slow to change the status quo and seem to be siding with rightsholders, Bemuso shows why: after the rightsholder, the next biggest beneficiary is the government.

VOA ready to bung BT billions

Happines is a warm bung.

The Valuation Office Agency review of business rates on fibre-based communications networks is shaping up to be a massive bung to BT, which already enjoys a cost advantage over its competitors because of the rating regime.

In a statement to Br0kenTeleph0ne, HM Revenue & Customs said “The VOA (Valuation Office Agency, which is responsible for setting business rates) hopes to publish the results of the NGA (Next Generation Access) final third Receipts and Expenditure valuation model (for rural areas) before the New Year in 2012.”

In the HMRC statement, a VOA spokesperson said, “We are aware of concerns about business rates in the telecom sector and we wish to see greater transparency and clarity in how rateable values are set.

“The VOA is working with the Broadband Stakeholders Group (BSG) to develop a new Receipts and Expenditure-based valuation model for Next Generation Access (NGA) networks in the final third (rural areas). This is not a review of how fibre networks are taxed and no such review is being undertaken by the VOA.”

The BSG declined to comment ahead of HMRC’s publication of the review.

BT is the only telco evaluated under the Receipts and Expenditure basis (ie on profits); VM’s valuation is based on “homes passed” and the others on the length of their networks and the individual lit fibres.

The VOA says, “BT and Virgin Media are assessed on the same statutory basis of rateable value as all other rateable properties.”

It is unclear whether the VOA review will look at fixed and mobile wireless infrastructure such as base stations, masts and towers, which are currently subject to business rates. If they are not included, the cost of delivering high speed wireless broadband to rural areas, via the mobile networks, microwave or even satellite, on a per kilometre basis may be higher than need be for purely competitive or economic reasons.

This would give BT’s wires, now 40 years old in many cases, a relative advantage, even though BT has said some areas will not get high speed broadband, and that “a mix of technologies” is needed.

It is also unclear what areas are considered “final third”. If it is Ofcom’s Market 1 regions, BT already enjoys either a monopoly or “significant market power” in these areas.

In 2006 an independent report commissioned by the government recommended that fibre be zero-rated to persuade network operators to invest in it. The then minister Stephen Timms ignored the report.

Subsequent reports showed that large network operators such BT and Virgin Media enjoy a consistent price advantage over smaller network operators as a result of the VOA’s different pricing formulas.

The formula for smaller operators uses distance, making it prohibitively expensive to install and light fibre in rural areas. For a grpahic view of the effect see the bottom of this page.

While in opposition, the Conservative Party vowed to review the so-called fibre tax, but soon forgot its promise.

B4RN-raising gets off the ground, NFU promises help

B4RN CEO Barry Forde (left) with first shareholder Walter Wilcox. Copyright Lindsey Annison

More than half a dozen people became on the spot shareholders in Broadband for the Rural North, better known by its Twitter hashtag #B4RN, at its launch today in Lancaster, UK.

B4RN is potentially the most significant telecoms business of recent times because it could show rural communities worldwide the way to access high speed broadband without depending on government or incumbent telco favours.

B4RN is a community-owned and run telco that is raising £2m from private investors to fund the first 275km of a 1Gbps symmetric fibre to the home (FTTH) network.

The first of three phases will cover 1451 properties in eight rural Lancashire parishes. This area is so remote that it is unlikely to
receive any government funding via the BDUK procurement process or affordable connections from commercial network operators.

B4RN was born out of frustration with the status quo. A smaller project designed by Barry Forde, who designed the Cumbria and Lancashire educational network (Cleo) had the £750,000 earmarked for it taken back by county councillors.

A high speed wireless community network in the village of Wray was threatened with higher connection and traffic costs when BT Global Services took over the Cleo network.

Negotiations with local city and county councillors proved fruitless, mainly because of confusion and delay surrounding the BDUK procurement process, which a year after money was allocated to four pilot projects, seems at least a year away still from delivering a broadband signal.

Forde estimates B4RN will complete its build in 12 months, if it raises the £2m.

B4RN’s average cost of connection will be under £1400. B4RN aims to start monthly residential subscriptions at £30/m, which include a telephone service. This makes is financially attractive compared to BT’s £25/m “up to 40Mbps” asymmetric Infinity fibre to the cabinet (FTTC) service plus £10 telephone rental, even if residents could get it, and even if BT doubles Infinity speeds as promised next year.

B4RN will also offer managed business networking services, and is believed to be in talks to carry backhaul traffic for mobile network operators.

One reason B4RN’s pricing is so reasonable is that many landowners have waived wayleave rentals for fibre passing under their properties. However, some, and those who help with the digging, duct installations and network operations may be entitled to B4RN shares in lieu.

A more formal national agreement on wayleaves for rural broadband is under discussion. This was expected by November, but has been held up by “public bodies”, says David Collier, chief rural affairs adviser to the National Farmers Union for England.
Collier. Collier used Twitter to promise B4RN “practical help” after attending the launch. He says the wayleaves issue should be settled within the next few weeks.

This may coincide with a review of the business rates applied to lit fibre in rural areas. HM Revenue & Customs confirmed to Br0kenTeleph0ne that an announcement on this is likely “before the New Year in 2012”.

UK leads opt-in on cookie laws

The UK is one of just five European countries to require website owners to get an opt-in from visitors in order to allow ‘cookies’ to track their movements on the internet.

According to a report from law firm DLA Piper, the others are Austria, Latvia, Lithuania and Sweden.

Countries that have passed legislation to enable the so-called cookie law (Article 5 of the e-Privacy Directive) but that do not require customers to opt-in are Finland, France, Hungary, Ireland, Luxembourg, and Portugal. Several others are pending.

The Information Commissioner’s Office, which is responsible for enforcing the directive gave UK firms 12 months from April last year to implement the necessary changes. From 25 May, any UK website that does not ask visitors to opt in to have a cookie installed on their computer will be in breach and subject to action.

DLA Piper says, “The more the use of a cookie relates to the personal information of a user, the more robust the procedures to obtain consent will have to be. “

It advises firms with website to check their systems now and to make them compliant as soon as possible.

The issue of cookies is sensitive politically and economically. Privacy activists see them as intruding on internet users’ privacy. Firms like Google and Amazon use them to estimate your preferences from your behaviour on the net. They use this to “push” information and advertising to you that may be interested in.

COOKIE MONSTERS

EU Member State	Implemented in local law	Prior opt-in consent required?
Austria	Yes	Yes
Belgium	No	TBC
Bulgaria	No	TBC
Cyprus	No	TBC
Czech Republic	No	TBC
Denmark	Yes	Pending
Estonia	Yes	Pending
Finland	Yes	No
France	Yes	No
Germany	No	TBC
Greece	No	TBC
Hungary	Yes	No
Ireland	Yes	No
Italy	No	TBC
Latvia	Yes	Yes
Lithuania	Yes	Yes
Luxembourg	Yes	No
Malta	No	TBC
Netherlands	No	TBC
Norway1	No	TBC
Poland	No	TBC
Portugal	Yes	No
Romania	No	TBC
Slovak Republic	Yes	No
Slovenia	No	TBC
Spain	No	TBC
Sweden	Yes	Yes
United Kingdom	Yes	Yes
Source: DLA Piper

Ofcom ignores business needs in 2012 work plan, but hints at an independent Openreach

Mobile and broadband are Ofcom’s key targets for next year, but there is not a word about dark fibre, the product most desired by business network users, in its draft work plan for 2012.

Ofcom said its framework requires BT to provide access to its physical infrastructure (PIA), including sub-loops, ducts and poles, so that other providers have the option of investing in NGA.

It also requires BT to offer virtual unbundled local access (VULA) to its next-generation fibre infrastructure, so that other providers can compete with BT to sell superfast broadband services to consumers.

Both of these statements from Ofcom’s work plan mask serious reservations among business users and would-be competitors to BT.

According to GEO’s chief executive Chris Smedley, the usage restrictions on PIA do not apply to BT, and together double the breakeven period for next generation investments compared to BT’s reported breakeven period.

The Communications Management Association, whose members buy some £13bn of communications goods and services a year, has for years called for Ofcom to insist that BT offer dark fibre, but Ofcom has repeatedly said there is no apparent demand for it.

Ofcom says it may look at dark fibre in its planned review of business access, due late in 2012, but did not mention it in its draft work plan, which is open for public comment.

In the absence of dark fibre, the CMA has called for structural separation of Openreach, BT’s inforastructure division, as the country’s single physical network operator.

However, Ofcom CEO Ed Richards said recently that it would require BT to supply customers with different wavelengths on its fibre rather than the fibre itself.

But in a speech on next generation network investment, Richards held out the prospect of a single converged fibre broadband network that carries voice ‘over the top’.

“This would of course be a significant change for both BT and competitive operators alike and would have to be considered very carefully,” he said.

In the meantime, Ofcom’s priorities for the year include:

• Auctioning and clearing the 800MHz and 2.6GHz frequency bands for ‘4G’ mobile use
• Review video on demand regulations
• Make sure the 2012 Olympics has the spectrum it needs
• Enable the copyright provisions of the Digital Economy Act.

Also on the wish list are to promote competition and investment in high speed broadband, business connectivity and voice markets, to ensure consumers can understand what they are buying, make it easier for consumers to switch suppliers, and to see about “regulating content”, which is code for stamping out online piracy and blocking or taking down websites with offensive or illegal material.

Spectrum games are over, Ofcom tells UK MNOs

The UK’s mobile operators, Vodafone and O2 in particular, may have been too clever by half in threatening to litigate their way through the proposed auction for high speed broadband frequencies.

Ofcom CEO Ed Richards told the European Competitive Telecommunications Association (Ecta) regulatory meeting yesterday, “some major companies will have to reflect upon whether they have inadvertently jeopardised the benefits of objective, independent regulation in this area by virtue of their willingness to game the system.”

Richards said he recognised the need for companies to defend their commercial interests and to use the law to do so. But it had been “very disappointing” to see how far the incumbent mobile operators were prepared to “entangle this process in litigation or threats of litigation”.

Richards said that only a few weeks ago, the department of culture, media and sport, which oversees communications policy, had realised “the stance of the operators made it harder for important decisions to be made and implemented”.

This may be unfair; culture minister Jeremy Hunt and communications minister Ed Vaizey are both said almost 18 months ago  they hoped the MNOs would not turn to the courts but cooperate with government in creating a vibrant 4G mobile market.

Richards said, “This may well be a consideration as British lawmakers consider their approach to a promised new communications bill for the UK.

“I am sure legislators would be all too willing to accept an argument which returns power in such matters to politicians, in light of the apparent inability of the current model to make timely decisions where the national interest is at stake.”

Richards was speaking ahead of Ofcom’s imminent release of the terms and conditions for the auction of 800MHz and 2.6GHz spectrum, the so-called 4G frequencies, now delayed until mid-2012. These will permit local operators to introduce high speed mobile broadband services in urban and rural communities.

The threat of litigation and the need to free up 800MHz frequencies has delayed the auction to the point where the UK is now far behind competitor economies such as Germany and France in 4G mobile roll-outs.

While the lack of cheap 4G handsets has minimised the gap up to now, this is less and less the case. It has also dampened projects to explore the use of LTE (Long Term Evolution) as an alternative to copper in local access networks.

 

FTTH B4RN-raising in a fortnight

Private investment in rural broadband marches on. Copyright B4RN

It has taken just three months for a privately-run 1Gbps symmetric rural broadband fibre to the home (FTTH) project to gain the support it needs to go live on 15 December.

B4RN (Broadband 4 the Rural North) already has 700 of the 622 home owners needed for the project to break even. At this rate, the project will quickly recover the estimated £2m start-up costs and be in a position to pay dividends, says one of the founders, local farmer and community wireless network operator Chris Conder.

The project will launch formally on 15 December. It is expected the first share prospectus will launch then too. It hopes to connect 1300 homes and more than 300 businesses in phase one of three.

Eight parishes in rural Lancashire will be linked via FTTH. These include Melling, Arkholme, Quernmore, Abbeystead, Wray, Tatham, Roeburndale, Wennington and Caton with Littledale.

The organisers have mapped routes to each home, and the project will accommodate every home. Those that don’t subscribe immediately just won’t be connected to start with, Conder says. “But they’ll join when they see what the neighbours are getting,” she says.

The initial services will be broadband internet and voice over IP for £30/month. The organisers plan to offer backhaul to mobile network operators and local businesses, e-health and content delivery of music, video and films, among others. This would be impossible or provided with unacceptable quality with BT’s planned broadband roll-out in the area.

B4RN had its genesis when Lancashire County Council reneged on a pledge to fund a smaller project, and went into a wide area network deal with BT.

B4RN CEO Barry Forde, who had earlier designed the educational network that BT took over, had already “specced” the basic network.

Working with Conder and long-time rural broadband activist Lindsey Annison, Forde produced the final project plan.

The plan depends on local land owners granting wayleaves to B4RN to run their ducts and fibre across their land for free. However, in return, the landowners get a broadband service that even BT can’t promise in the foreseeable future. Moreover, B4RN will not depend on nor seek any of the £530m available from BDUK, the government’s broadband delivery agency.

Forde said digging the core network would start early in 2012. “We expect this to be completed in approximately three months, weather permitting, and then we will begin to connect the first users,” he said.

Shares in B4RN are being made available under the EIS (Enterprise Investment Scheme) that offers 30% tax relief, with a minimum investment of £100 and maximum of £20,000.