Following the broadband money

BT pays the piper and calls the tune

with 12 comments

BT's piper

BT’s piper

When Frank Zappa wanted to alert his kids to a politician’s statement that seemed at odds with experience, he allegedly told them to ask themselves “Is he being paid to say that?”

A curious document is doing the rounds. It was commissioned by BT and written by Matt Yardley, a partner at Analysys Mason, who led the fibre costing study for the Broadband Stakeholder Group (BSG) .

Apparently aimed at local authorities that are considering applications for funds under the £20m Rural Community Broadband Fund (RCBF) banner, it sets out to show that you won’t get fired for ditching them all and waiting for BT to show up.

Clearly BT is not taking its beating from the the Public Accounts Committee, the National Audit Office, nor even culture secretary Maria Miller, lying down. On BT’s behalf, Yardley says

For communities planning to support self-built networks (Approach 1) or local altnets (Approach 2), it is important that they understand the risks we have identified, to ask the right questions and to plan accordingly. For communities looking to invest public funds (Approach 3), it is imperative that they understand the implications of open access, as well as the other obligations under the EC’s state-aid rules. And finally, for Approach 4, we have indicated at least one way by which the power of local communities could be combined with the scale economies of an established operator like BT and which could mitigate the main risks facing small-scale networks.

As Yardley sees it, Approach 4 “could work, for example, by BT providing ducting to local communities for them to install, but which is then ‘adopted’ into the BT network for operation. The communities would benefit from the purchasing power of BT in buying raw materials (ducting), but more importantly, the adoption into the national network, operated by Openreach, would ensure that communities have access to the same level of retail choice as the rest of the country, while also having the assurance that the network would be operated and maintained professionally.”

In other words, communities should pay BT for the raw materials (20 per cent of the cost), dig it n themselves (80% of the costs) and then hand it back to BT so that BT can charge them for using it. Riiiiight.

There is nothing except a management edict to stop BT Vision from offering its products on altnets such as B4RN. B4RN would be delighted to have the money and could speed up its network build, bringing BT Vision to even more viewers. Ditto for all the other content providers, many of whom are reluctant to use altnets in case their existing service develops inexplicable problems.

Yardley notes that utilities like gas, water, electricity and telecoms are “natural monopolies” because of the cost of building their infrastructre, which is why they are regulated.

Most of BT sells services. For Yardley to suggest that BT as a whole is a natural monopoly is disingenuous. Openreach is the only part of it that deals with infrastructure.

To carry Yardley’s argument to its logical conclusion, Openreach should be carved out of BT and regulated as the monopoly it is.

And no-one pays me to say that.


Written by Br0kenTeleph0n3

2013/10/01 at 05:43

12 Responses

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  1. Oh, you mean Build & Benefit? Like at Fell End in Cumbria?


    2013/10/01 at 06:00

  2. ‘Ditto for all the other content providers, many of whom are reluctant to use altnets in case their existing service develops inexplicable problems.’

    Please explain.


    2013/10/01 at 06:54

  3. In the strap line of a famous internet campaigner “First they ignore you, then they laugh at you, then they fight you, then you win” (originally pinched from – Mahatma Gandhi)

    So now they bring out their AM lapdogs to start a fight. comical.


    2013/10/01 at 07:15

  4. Where does Yardley suggest that BT as a whole is a natural monopoly?. States ‘BT, and Openreach in
    particular, have controls placed upon them to prevent monopolistic behaviour.’


    2013/10/01 at 08:01

  5. “having the assurance that the network would be operated and maintained professionally”
    Like they currently do with their ancient copper infrastructure in rural areas?


    2013/10/01 at 08:26

  6. The whole document is a joke and is purely a misinformation campaign designed to scare communities into sticking with the existing incompetent monopoly!

    Chapter 7 – Other important factors for communities to consider – makes good reading. Without realising it, they highlight all the reasons exactly why communities should think twice before staying with BT!

    It mentions “Communities should also consider the broader product portfolio on offer”. Yes they should – which will be extremely limited if they stick with BT and end up being over 2km from their FTTC enabled cabinet!

    It goes on to discuss service levels and customer satisfaction. I would argue that those in the final 10% have no faith in BT’s ability to deliver a reasonable service and have a very low level of customer satisfaction.

    It then mentions VOIP, warning that “it can be difficult to ensure the same level of quality as the traditional voice network”. Sounds like they’re worried consumers might ditch their expensive landlines and replace it with a cheaper VOIP connection!

    Finally it quotes “a battery back-up system needs to be planned in order to support calls to the emergency services in the event of a power failure”. Strange how they didn’t mention that all their FTTC cabinets require power and a battery backup. Oh, and there are things called mobile telephones now!


    2013/10/01 at 09:24

    • Andy I agree with your points too. Reports that are independent but commisioned by the organisation that it will hopefully show in good light have to be taken with a pinch of salt. Clearly if AMs independent report would have come back with views that supported the PAC and the NAO then I doubt we would have seen it published. Indeed if BT had thought that was going to be the outcome I’m sure they would not have paid for the report.

      You point about the battery backup is interesting as I have thought about this myself and whether not having a backup if the power went was an issue. Lets’s face it, most landlines are now on cordless phones so if the power went, so do all the handsets and as you point out, we have mobiles now so the battery backup is really a pointless argument in my view.

      Interesting to read though. More so due to the fact that BT have gone to what must be a large expense to dispel opinions that people are now starting to see.

      Martyn Dews

      2013/10/01 at 09:59

  7. On reading your opening sentence I thought the article was going to be about Ed Vaizey’s very defensive press release issued the day before publication of the PAC report.

    On a different note, BT’s architecture for the new village at Ebbsfleet was/is based on FTTH and incorporated a battery pack “under the stairs” in every home. Not sure where that takes us though………..


    2013/10/01 at 18:59

  8. The 4G Mobile Broadband 98% coverage obligation was put in place for good engineering reasons. 2Mbps indoor with the ability to configure base stations to support fixed wireless is an added option. I did not see this in the discussion paper.

    It does require folk to work together using MIP judiciously to in-fill where it is impracticaal to get fibre access any further.

    On Build and Benefit their are so few organised community groups that BT should give them every courtesy and encouragement to build to an industry standard such that the passives are re-usable should that be needed. If you added all the numbers involved you could not hit .5%.

    And we are not talking final 10% but final 5% in most counties. We could probably list each engineering area in the final 5% by county and identify a target outcome pretty quick. Quicker still if we get the required cost transparency which I hope will come even it takes MPs to request Gov to instruct Ofcom to change BT Undertakings so it is obliged to reveal its marginal costs and has less discretion on cost recovery where state aid is present.

    NGA for all

    2013/10/02 at 10:25

  9. […] not. Hours after it was published it emerged that BT commissioned consultancy Analysys Mason, which spelled out why hiring anyone other than BT might be a “courageous […]

  10. The author has been paid twice…
    First by the government to advise them how to get into this mess, and second by BT to cover up their shortcomings.
    After this I’ll be surprised if he has any credibility left.


    2013/10/03 at 16:36

  11. […] to BT’s ears, seeing that it attended but didn’t care to share its ideas, not even the Build and Benefit nonsense it was peddling via consultants Analysys Mason ahead of the Conservative Party […]

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