Br0kenTeleph0n3

Following the broadband money

Welsh dragon protects BT broadband treasure

with 9 comments

wales-welsh-flag-16-pDisclosing 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.

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Written by Br0kenTeleph0n3

2013/10/31 at 08:27

9 Responses

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  1. Here’s the one that’s confusing me in that which “arm” of BT is contracting on these BDUK giveaway’s? Is it BT Retail, BT Wholesale, BT Global Services, or Openreach (they don’t like being called BT Openreach as I’ve found in my travels)? Or, as I suspect, is it the BT Group as an entity?

    John Nolan

    2013/10/31 at 08:43

  2. The contract signature is Openreach according to scuttlebutt

    wispalimited

    2013/10/31 at 08:45

  3. What did the original request ask for?

    Somerset

    2013/10/31 at 08:49

  4. i have a probable example of this mechanism. We were to meet with a body representing an area of parish councils to discuss broadband provision. They were going to invite a representative from “BT” to talk there too.

    This was not to gain any funding , it was merely to discuss what we can provide and the costs / take up required to make it feasible.

    Anyway, it appears they went to the LA to announce this meeting and to seek a “BT” rep . The result is the meeting was duly cancelled until at least next March.

    My thinking on this is the BT veto rights as mentioned in the article. They cannot have a commercial service provider outside the program messing up the figures and i am sure the LA advised the council group that if they spoke to us it may affect their chances of getting a slice of the funded BT “proper broadband”.

    We already have an established network near the area and this meeting may of given the clarity and business case to invest in expanding to the whole area in question. Of course it might not of too, there is a strong public view that “BT must provide broadband”. Either way we would know where we stood.

    The areas in question are > 4km from a market 1 exchange with a total dispersed population that may justify a single fibre cab if they were all within range of it.. which of course they would not.. About half of them have 2 Mbps ADSL , the rest somewhat less.

    Land owners and businesses in the area are now talking to us direct and will be funding the required infrastructure themselves privately as they, like many, do not see anything happening from the BDUK process until 2017 or whatever rolling year it becomes next year and the year after etc..

    I am sure most of us remember the original “super fast for all by 2012” deadline, they do at least.

    Note: talking of Dragons, are you going to enter this Lair Ian ? > http://www.westminsterforumprojects.co.uk/forums/event.php?eid=587

    Bill Lewis

    2013/11/01 at 09:22


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