Archive for March 2012
Cable & Wireless Worldwide pulled out of the BDUK broadband procurement process because it did not believe it would lead to an optimal solution for customers, a spokesman told Br0kenTeleph0n3.
The statement came after reports surfaced that only BT and Fujitsu Telecom are left in the running for £530m in taxpayers’ money to help fund the roll-out of broadband services to rural areas.
Br0kenTeleph0n3 predicted this nine months ago.
BDUK said in response that it is finalising the national broadband procurement framework and expects to announce within the next few weeks which companies will be part of the contract.
BDUK appointed nine companies to take part in the procurement framework. It expected six to go through.
BDUK is believed to have sent letters to those who pulled out informing them that just BT and Fujitsu are still in the running.
BDUK said it was not approaching the refuseniks to change their minds.
“DCMS is in the final stages of the procurement process for the framework and is not seeking any further suppliers,” it told Br0kenTeleph0n3 in a statement.
It said, “We have conducted a thorough procurement process in order to establish which companies or consortia have the capability to offer affordable wholesale broadband solutions. This process is ongoing and there are no plans to rethink it.”
The procurement process was produced following advice from consultants KPMG and lawyers at Pinsent Mason. It placed severe financial and capacity thresholds on candidates, effectively excluding local network companies.
BDUK has so far refused to answer a Br0kenTeleph0n3 request under the Freedom of Information Act to say how much the advisors were paid.
BDUK has asked the European Commission to give contracts awarded under its procurement process blanket approval under state aid regulations. The commission is still considering the request. If it declines approval, every county that dispenses BDUK money may have to go to Brussels for the go-ahead.
Unconfirmed reports suggest that BT and Fujitsu Telecom are the only suppliers left from nine in BDUK’s framework process for funnelling £530m into the market for high speed broadband access in rural areas.
Cable & Wireless Worldwide, believed to the most recent to quit the process, is deeply in debt and a take-over target for mobile operator Vodafone and India-based Tata Communications.
Dark fibre network operator Geo Networks quit the game in November saying the price for access to BT’s pipes and ducts (PIA) inhibited the development of a competitive network landscape.
Vtesse Networks, which has provided fibre to cabinets in a couple of small Hertfordshire villages, withdrew in mid-2011. In written evidence to the House of Lords communication committee, which is investigating the UK’s efforts to develop “Broadband Britain”, Vtesse said, “The regulatory and fiscal barriers we identified in 2009 still remain. As a result of these, we have decided not to proceed with further roll-out of residential services, and no longer engage with BDUK.”
Fujitsu, which has tested BT’s PIA product, earlier strongly condemned BT’s initial pricing of the product. With Virgin Media and TalkTalk it wrote to Ofcom, saying the PIA price was five times higher than cost. BT then made modest changes to the price but introduced other fees.
The original nine on BDUK’s long list, which BDUK expected to cut to six, are BT, Fujitsu Telecom, Network Rail, Capita, BeyondDSL, Parsons Brinkershoff (Balfour Beatty, ALU and Cable&Wireless Worldwide), Kcom, Thales and Geo.
Peter Cochrane, former BT head of research and CTO, savaged the government’s broadband policy and implementation in evidence to the House of Lords communications committee which is looking into the UK’s superfast broadband initiative.
Cochrane who left BT in November 2000, said:
In 1979 my PhD was instrumental in BT’s decision to go fibre everywhere.
In 1986 I had got fibre to the home cheaper than copper at 2Mbps.
The island of Jersey is installing a 1000Mbps network everywhere in both directions; it’s cheaper than copper, and they’re doing it because they have a monoculture of banking, and they need to change the economy of the island.
Giving our people 2Mbps is like giving them a Morse key; you might as well not bother.
Twenty to 50 Mbps will not give us entry to cloud computing, on which rests the next phase of industry, commerce and the generation of GDP.
UK broadband is neither super nor fast. For one thing, it’s asymmetrical; communication tends to be two-way, so we can’t make use of video conferencing (with the present system).
When I came in, we were the servants of society…Now…(it’s) I’m here to benefit the company (and) the shareholders. That loss of perspective of a duty to society is really quite damaging.
Fibre to the cabinet is one of the biggest mistakes humanity has made.
What’s this magic about fibre to the home? None. You can put copper Cat5 or LAN cable in yourself. Are you allowed to by BT? I always take the view in everything that I will beg forgiveness later.
Even when I was in the company 85% of UK homes were within one kilometre of a BT fibre that was dark, not being used.
If Ofcom is powerful enough to regulate the radio spectrum, surely they are powerful enough to regulate the waves on fibre.
As we unbundle duct access, there is a case to unbundle fibre and unbundle the wavelengths.
The £560m (£530m actually) that is being talked about is petty cash in this game…(Universal FTTH) will cost about £10bn to £15bn.
I would leverage the £560m (by investing) in small players so that there is a third force. In all successful commercial markets there is a rule of three, perhaps four. What we have right now is a rule of two.
The worst thing I see is start-up companies who get into this space to service people like you and me (in unserved rural areas) who are then observed making a success, and are then wiped out purposely by the incumbent.
If communities take things into their own hands, things can change.
There are two dangers with government investment; either it is spread too thin, or it just impacts one place.
We could have had the same mobile coverage we have today for £2bn if the mobile operators had shared masts. The same is true for fibre networks.
In 1986 I got fibre to the home and by 1990 BT and DuPont had built two factories, one in Ipswich and one in Birmingham… We were rolling out fibre to the home; it was an active programme, but it was stopped…by the Thatcher government and Sir Keith Joseph. They wanted the American cable companies in. The programme was stopped. Working with us were the Japanese and Koreans. They looked on, aghast, as we stopped. They carried on…we went back in time.
Do you take as a general proposition that where there is fibre there should be open access? Yes.
Squeezing the other guy out is not to the benefit of the nation, and not to my mind, a very clever business model.
If you could get (ready) access to fibre near you it would be absolutely transformative.
The cost is in getting the network in; the running cost is relatively low.
The delivery of bandwidth is independent of both the bandwidth and the distance. It’s the reason why your telephone call to North America is worth relatively nothing. It’s the sheer quantity of calls that makes it a viable business.
The analogue trans-Atlantic cable cost about $300m and took about five to seven years to pay back. The first optical fibre cable was filled in about six months and paid back in less than 18 months. Those systems now cost around $350m and pay back in a matter of months, not years.
When I was in BT we had about 7,600 telephone exchanges. We calculated that with fibre, because of its greater reach, we could get it down to under 100, about 60.
The fault level in an optical fibre network is very very low. And you can reduce manning, buildings, power consumption, everything.
A national broadband strategy would be founded on all access for all people at 100Mbps and above with an eye on fair competition, an economic and regulatory framework that encouraged people to help themselves, and encouraged start-up companies to provide the competition that’s necessary.
BT has told Ewhurst that it won’t fulfil its initial promises on its fibre to the cabinet (FTTC) roll-out to the Surrey village.
According to the Ewhurst website, “Openreach (BT’s infrastructure company) appear to have finally accepted that the FTTC works are not on target. Just 10 days before the original RFS (ready for service) date they have rolled back the ‘planned’ date for ‘WBC FTTC’ to 30th June 2012, for all Cranleigh exchange (which serves Ewhurst) lines we have checked. However, we understand that some cabinets may still go live before then, whilst others may be delayed much longer, or not upgraded at all.”
Ewhurst was denied a development grant of £180,000 to upgrade its broadband because BT was going to do it. Ewhurst had planned to spend its grant money with Vtesse Networks following an open tender to which BT offered a non-compliant response.
As Ewhurst started meeting with the Surrey County Council to finalise the Vtesse contract, BT approached the council, asked it to sign non-disclosure agreements, and presumably revealed its plans to roll out fibre to the cabinet in the area.
Under EU state aid rules, public bodies should avoid spending taxpayers’ money if they would duplicate what the private sector is about to do.
The council then reneged on its promise of the money to Ewhurst.
Walter Willcox, who led Ewhurst’s bid for the development grant,notes that had the Vtesse contract been allowed to go ahead, Ewhurst villagers would by now have been enjoying high speed broadband for a year, and some would have had fibre to the home connections.
Willcox says the one Ewhurst cabinet that Openreach has upgraded has only FTTC capacity to serve 100 homes rather than the 500 that are connected to the cabinet.
“One has to question the motives of the BT Group who still appear to be a very long way from having their inferior service available even for just one cabinet,” he said in a comment on the Ewhurst site.
Meanwhile, details have emerged where BT refused to replace a length of aluminium cable that prevented a customer from getting more than 15Mpbs from an Infinity cabinet that BT promises will soon deliver “up to 80Mbps”.
The story develops in a series of postings on the PlusNet community blog. At one point the customer says, “BT have stated that they are not willing to replace the aluminium cable with copper due to the costs associated with digging up the directly buried inferior cable. If only they had run the cable in a duct…
“BT have apparently quoted long lead times and a cost of several thousand pounds because they would need to negotiate permission to dig up other residents’ front gardens. This may not be too difficult as everyone on the estate is aware of the service strip under which all utility cables are buried…
“If BT are truly treating the FTTC trial as a method of developing their 21CN customer service methodology, then problems like this are good learning opportunities and should not be filed away as ‘too difficult’.”
Although the exchange between the customer and PlusNet (a BT subsidiary) is from November 2010, it is indicative of the problems customers have in getting BT to deliver the service it promises.
The fact that Ewhurst has lots of aluminium cable and some of its ducts are in poor condition may have something to do with Openreach’s revised timetable. Or not.
UK taxpayers are likely to see hundreds of millions of pounds wasted duplicating high speed broadband services because local councils do not have official information about wireless broadband access in their area.
BDUK, the government agency charged with delivering the “best broadband in Europe” by 2015, has indicated in response to a Freedom of Information Act request that its maps do not reflect accurately the availability of high speed broadband in the UK.
Its maps, compiled from data collected from BT, Virgin Media, KCom and Ordnance Survey appear to reflect only fixed line access. Yet there are scores of small wireless network operators who already provide broadband access to thousands of customers. The availability of wireless broadband services may have been deliberately excluded from official records, as recent events in West Sussex showed.
In addition, procurement rules set up BDUK on the advice of consultants like Pinsent Mason and KMPG excluded operators with less than £20m/y turnover. This made all the UK’s wireless broadband operators and many mid-sized fixed network operators officially invisible.
The effect has been to distort the market in favour of large fixed wire network operators, even though ministers, officials and even suppliers have said constantly that a “mixed economy” ie combination of wired and wireless technologies, is needed to fulfil the government’s ambition.
BT has already said it will work with mobile operators to use LTE, the latest mobile telephony technology, and it is also working with satellite operator Avanti, to meet rural broadband needs in Cornwall. Arqiva has piloted LTE successfully in the Preseli Hills in Wales.
Kijoma Networks, which provides wireless broadband in Sussex, says its entry-level speed is 16Mbps, twice the national average broadband speed reported by Ofcom.
Kijoma CEO Bill Lewis said, “I have been challenging WSCC (West Sussex County Council) over their blatant pro-BT stance for years. In this county we have the added stitch up with the three non-ADSL exchanges. I am informed that they have gained permission from BDUK to spend some of the money to enable these exchanges for a ‘2Mbps service’.
“As the commercial incumbent in these areas for (about seven) years I am a bit miffed, obviously, as when we asked (WSCC) about funding our networks back in 2003-2004 they snubbed it.”
The department of culture, media and sport (DCMS), which is responsible for BDUK, did not answer a FOIA request that asked specifically if its maps included data on wireless access.
Instead it said it used a number of sources including Ordnance Survey geographic information such as Code Point; published BT FTTx exchange upgrade announcements; commercially confidential information from BT Openreach such as postcodes served by different cabinets; similar information from KCOM in and near Hull; and information from Virgin Media on cable coverage by postcode.
Asked how closely BDUK maps mirrored the Ofcom broadband maps, DCMS said the two exercises had not been co-ordinated, “but when they draw from similar sources they have similarities”.
“There is a significant difference in timing,” DCMS said. “The BDUK analysis is designed to look ahead while the Ofcom analysis looks at the current position. As an example, in Northern Ireland the superfast availability results were similar, but in Cornwall they were very different because at the time of the Ofcom map BT had announced major upgrades for Cornwall but had not carried them out.
“On current broadband speeds, the BDUK map seeks to model speeds capable of being received in an area while the Ofcom map uses average actual speeds; the latter will be lower for a number of reasons including customers choosing lower speeds than the maximum available.”
DCMS said the data is refreshed when there is “significant new information” and when BDUK has the resources to carry this out. It said the data was refreshed following the BT FTTx announcement in September 2011 and again following the BT FTTx announcement in December 2011, and took in “other data” which became available during those periods.
DCMS said BDUK has supplied extracts from these maps to local broadband partnerships and projects, and to the Scottish government. Local authorities who bid to be part of the £100m super-connected cities programme (see note) also received extracts. Requests from Br0kenTeleph0n3 to see the BDUK maps have been ignored.
DCMS said BDUK expected local partnerships to use the extracts to help planning and procurement of their next generation broadband projects. They would also act as “a baseline for consultation in determining the eligible project intervention areas in accordance with the EU State Aid approval process”.
Some wireless broadband operators have threatened to take legal action if local authorities ignore their presence in the market. This could hold up or deny hundreds of millions of pounds to operators like BT.
BDUK can veto a local authority’s NGA plan. Asked what other sources of information would be acceptable to BDUK, DCMS said BDUK expected local authorities to use other sources of local information. This was to validate and improve the accuracy of the data supplied by BDUK, and to supplement it.
This might happen if they “become aware of other local broadband suppliers’ footprints and future plans, when formally consulting on the intervention area in accordance with the EU State Aid approval process”.
“BDUK has not restricted the sources local authorities might use, but expects them to assess the quality of different sources before using them or providing data to bidders during procurement,” DCMS said.
The government has parcelled out £530m for NGA, with another £300m possibly available after 2015. The original intention was to ensure that the “Final Third” of the population, typically those living in rural areas, got access to high speed broadband, then taken to mean more than 2Mbps. Recent reports suggest that once this money is spent, 10% of the population, six million, will still be without such access.
Note: DCMS last week published the broadband access speeds available to towns with more than 100,000 dwellings.