Following the broadband money

MPs, lords to face anger over failing UK broadband roll-out

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Sweating the physical network assets since 1997. Source: ONS

Sweating the physical network assets since 1997. Source: ONS

Parliamentarians will meet tomorrow to discuss broadband policy amid growing anger and concern among businesses that almost £2bn in taxpayers’ subsidy will leave the UK in a worsening competitive position.

Digital Policy Alliance chairman Lord Erroll will chair the meeting (see below for details) that will hear from two recent papers that show that large parts of the UK will end up with broadband access one-fortieth of that of South Korea, and far behind France, Brazil and China by 2017, the deadline for the government’s current broadband spending plans.

The report from Digital Business First (DBF) flatly contradicts Ofcom’s recent finding that the UK leads Europe in high speed broadband. In an open letter to Ofcom CEO Ed Richardson, the DBF said, “When ranked against all 27 EU states (not just the five Ofcom conveniently chose for the sake of a headline) the UK ranks tenth, behind countries like Portugal, Denmark, Belgium, Lithuania and Latvia.

“Secondly, there are large areas of the UK (approximately 10 million homes and businesses according to the government’s own figures) that are to be supported with public funding to deliver ‘target’ broadband speeds of just 2Mbps and 24Mbps (via the BT network). These speeds are well below even Ofcom’s low threshold of ‘superfast’ broadband. These ‘have nots’, which include some of our most productive business premises in rural locations, are being left to languish in the slow connectivity lane indefinitely.”

The forum’s assertions are supported by a study of the effect of line lengths on broadband speeds by researchers at Edinburgh University. The researchers found that one in eight Scottish homes is unlikely to be able to get more than 24Mbps, and 40% of rural homes and businesses will struggle to get more than 2Mbps.

The average line length of Openreach's network is around 3.4km. The average length from street cabinet to a premises is around 420m. This is enough for 40Mbps download speed provided BT implements vectoring on its VDSL lines. Not every line in every cabinet is being so enabled in its next generation roll-out, and at least 10% of cabinets are unlikely to be enabled.

The average line length of Openreach’s network is around 3.4km. The average length from street cabinet to a premises is around 420m. This is enough for 40Mbps download speed provided BT implements vectoring on its VDSL lines. Not every line in every cabinet is being so enabled in its next generation roll-out, and at least 10% of cabinets are unlikely to be enabled.

Openreach, BT’s network infrastructure division, redacts its line length information in recent public documents. However, in a 2011 report on line lengths and line costs to Ofcom, Analysys Mason said that BT had confirmed (in 2004) that its average line length (between the exchange and the premises) was 3.47km (including the dropwire length). “This provides a reasonably good reconciliation with the (2008) Sagentia analysis (3.34km average line length). The same presentation also confirmed the distribution of lengths between the cabinet and the customer, with a typical 420m length and a small proportion of lines (10%) with a very long length,” it said. Analysys Mason later calculated the average Openreach line length at 1.704km – a figure hotly disputed by Openreach.

A 2011 White Paper by Alcatel-Lucent on the use of vector technology with VDSL2, the technology chosen by BT for its next generation broadband roll-out, found that at 420m, the average download speed would be about 40Mbps, while at 1.2km, it would drop to about 24Mbps (see graph).

How broadband peters out. Source: Alcatel-Lucent

How broadband peters out. Source: Alcatel-Lucent

Figures from the Office of National Statistics show a declining trend in the construction of communications infrastructure (see graph). The ONS figures include post office buildings and sorting offices, but also exchanges and cables. This suggests that few new cables have been laid in the past 15 years, so Sagentia’s figures are likely to be reasonably accurate.

(Unfortunately, the ONS bundles sales figures for telecommunications equipment with those of computers. This makes it impossible to establish accurately what UK network operators have invested in network hardware and software.)

As noted earlier, Openreach’s capex has been steady at around £1bn for several years. But it is starting to decline as it comes to the end of its “commercial” broadband roll-out to cover two-thirds of the population, but only one-third of physical UK.

BT's capex spend shows a gentle but steady decline.

BT’s capex spend shows a gentle but steady decline.

In BT’s case, Alcatel-Lucent appears to have made a convincing argument to go for vectoring over VDSL2. It said, “Reusing existing infrastructure reduces investment costs and risks. It also helps with eco-sustainability targets. With VDSL2 Vectoring, you can deliver higher speeds at about 1/3 the cost of deploying fibre. And any fibre investments to support VDSL2 Vectoring lower costs for future fibre deployments.”

But as its own figures show, this is true only where line lengths are short, and it does not appear to include any offset for reclaiming the copper and reusing the ducts.

DBF members Alex Pratt and Frank Nigrello, who represent local enterprise partnerships in Buckinghamshire and Oxfordshire respectively, accuse Ofcom of painting an “unduly rosy picture” that serves the UK badly. “It amounts to institutional denial of the need for a significant change in policy towards investment in digital infrastructure. It is leading to an unnecessary rapid regional and national decline in our relative productivity and competitiveness. It is akin to adding extra weight to handicap our businesses in what the prime minister has called ‘The Global Economic Race’.”

The DBF is highly critical of what it sees as the government’s casual approach to broadband. “Current government policy and funding has failed to bridge the superfast broadband infrastructure deficit for 35% of the UK,” it says. It attributes this to a lack of consultation with user communities; adopting the “least ambitious targets and technological means” to deliver them, and to a lack genuine incentives for investment in future-proof high speed broadband networks.

Quoting from the National Audit Office report on the rural broadband roll-out, the DBF said, “The department (of culture media and sport said) its aim was to achieve the most possible with the given funding, not to lever the maximum amount of private investment.”

It added, “The current argument between Ofcom and mobile networks on spectrum fees, with the latter threatening to reduce 4G coverage unless fees are lowered, points to a far less investment friendly approach in the UK.”

The DBF report also criticises the lack of ambition in making high speed broadband a universal service. Again quoting the NAO report it said, “The effect of designing a programme which only reaches 90% of the target area will make it more expensive at a later stage to cover the final 10%. It will also make it less commercially viable for anyone other than BT to bid, as no-one else will have existing infrastructure to bolt it on to.

“Matters are made worse by the fact that BT is preventing local authorities from publishing plans showing which areas will not be covered, which would enable other, often community-based consumers, from filling the gap and ensuring 100% coverage.

“Witnesses from the broadband industry told us that potential investment by competitors had been lost. For example, UK Broadband has spent none of the £150m it had allocated for the programme. Fujitsu had also stated an intention to invest £1.5bn which has not been invested. In total, INCA estimated that the investment that had been foregone was at least £2.7bn.”

The DBF calls for a national broadband plan and responsibility for its delivery to be moved the department responsible for business and enterprise.

“Any incoming government in 2015 should be specifying a target of at least 100Mbps for the UK ‘have nots’ within two years,” it says.

It called for the UK to re-establish its world lead in mobile communications by “adopting an ambitious ‘can do’ approach to 5G technology”. 5G networks offer the prospect of universal ultrafast (1Gbps) broadband across the UK, it said.

It also called for changes to the terms of the 4G mobile licences to ensure that the coverage obligations include a signal strong enough to deliver 10Mbps inside a home for 98% of the UK population, a voice service, and for more than one 4G mobile network to have the above coverage obligation.

The meeting takes place on 24 March at 15.10-17.00 in Committee Room 4A, House of Lords, Westminster.

The agenda is:

* Welcome and introduction by Lord Erroll, DPA chairman

* Presentation of European Internet Foundation’s (EIF) report ‘The Digital World in 2030: What Place for Europe?’ by Peter Linton, advisor to EIF board of governors and co-author of the report

* Presentation of Digital Business First’s report “The UK’s enduring broadband deficit: A divided nation – Time for an effective plan” by Alex Pratt, chairman Buckinghamshire Business First and Buckinghamshire Local Enterprise Partnership (LEP).

* Comments by Stephen McGibbon, EMEA regional technical officer, Microsoft; Peter Olson, president of Digitaleurope and head of European Affairs, Ericsson; Alexandra Birtles, head of external communications, TalkTalk Group; and parliamentary contributions with closing remarks by James Elles, MEP and EIF co-founder.

Written by Br0kenTeleph0n3

2014/03/23 at 18:17

15 Responses

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  1. Not only is BT’s infrastucture investment falling it is also alleged that it is turning away wholesale business because it is overloaded.

    if that is the consequence of its diversion of funding into content then MPs are correct to be furious.

    But with whom?

    Philip Virgo

    2014/03/23 at 19:33

    • Collective responsibility? BDUK civil servants, mostly seconded from the Treasury, Local country councillors who bought into BT’s Vital Vision? There are plenty of scapegoats who were witting or if unwitting, should have done more to reduce their ignorance. There’s been plenty of history, and plenty of advice.
      But it’s users that are angry – and, no doubt, those MPs that have to face voters in 2015.


      2014/03/23 at 19:51

      • Instead of getting mad they should get even, and use some of their combined power to bring about change, and to shout from the halls ‘the emperor has no clothes’. For too long the politicians have been led by the nose by others. Yes minister. You are in the thick of it now dear Lords, fight your way out of this mire and save Digitalbritain from the fools who think copper can deliver a digital future.


        2014/03/23 at 20:10

  2. In deciding what to do with its SEP allocation, North Yorkshire has already fallen for BT’s tales of yet to be proven technology. It’s an easy option for hard-pressed local authorities.


    2014/03/23 at 23:20

  3. Great article covering some key points.
    Just an aside, one thing rarely mentioned by BT is that the technology used by BT is almost exclusively aimed at an asymmetric service, fine for the content like BT Sport etc, but it’s an unbelievably poor decision for the future UK as the world increasingly goes to the Cloud. Poor upload speeds will make this a nightmare that many will have in future.
    Sadly too many ill informed and technically naive politicians and councillors are making decisions on future infrastructure they just don’t understand.
    Oh, but it’s all OK – BT are there to explain to them how to do it, and everything BT says is 100% right – right?
    Wrong – all BT will do is maximise their profit and squeeze the copper asset and old infrastructure dry whilst being paid public money to do it. they have no interest in building community infrastructure or really closing the digital divide, they’ll do that next when the FTTC fiasco isn’t working anymore. Then they’ll get more government money for another scheme, and so on….

    As I said somewhere else before, BDUK have simply handed the keys of our henhouse over to the BTfox, and then used our money to pay him to kill the chickens…

    Its a Superfarce, and hopefully we are all now waking up to just how little BT are delivering for the money.
    BT must be laughing all the way to the bank.

    A time for a major review and rethink, open up the markets and backhaul to Altnets and other operators, not trust in the Benevolence of the BT monopoly.

    Occasional Berk

    2014/03/24 at 00:09

  4. I don’t trust this bandwagon. It presented itself as the Local Enterprise Partnership in its respective areas by using captial letters for LEP. It is not a LEP imo it is a lobby group which cannot make money from BT projects so wants alternatives not because of the technology but out of self interest. None of these people came forwrd to tell us how much they have already earned as BDUK consultants and what alternative schemes they have delivered for their payments. On Twitter ‘consultants’ who want paid work (like BT) retweeted the ‘LEP’ message with capitals, which I’m sorry makes them untrustworthy! Some of this lobby group promoted a paid for event to LAs which was imo an event for them to sell their services. Why are you trusting people who would take money off LAs to sell their services to LAs? Did it pay consequential losses to any LAs stupid enough to have fallen for it?

    Ian has offered to document public money already paid to these very vocal lobbyists and how many properties they have connected.None of them has come forward as far as I am aware.

    I exclude B4RN from this discussion because it has not had public money, it is not part of the gravy train which imo this lobby group is, just like BT.

    Selina Howells

    2014/03/24 at 07:17

    • LEPs are not altnets. leps are a waste of space. In our area all the leps do is ‘promote the benefits’ of broadband that isn’t deliverable. They usually employ what is left of business link or rda people to do this. In our area there is £3M being wasted on this. Guess its the same in most areas but don’t know. They don’t connect properties, they just talk about stuff.

      Altnets are people with vision, many of whom are already building networks, but smaller community ones made the mistake of waiting for support that never came. I don’t know of any altnet supported by an LEP or council, but would love to hear of some to restore my belief in a system that increasingly seems to be led by eejits.


      2014/03/24 at 08:05

      • Why did ths group of consultants/marketing agency type people portray themselves as LEPs when they are not? I agree, LEPs are what RDAs were. Where funding is EU, it specificed what money had to be spent on workshops explaining the benefits of superfast – so that £3m had to be spent as it is, unfortunately. It seems a waste but perhaps the target audience is in a completely different place and the workshops will prove a worthwhile investment.

        B4Rn has connected some properties. So has BT. We need to know how much public money these marketing types saying they are LEPs have already had, and how many properties have been connected on which they have advised.

        If these marketing types have already had collectively £1m and they have not connected any properties we do not want to listen to them, and we do not want them to have any more dosh.

        Selina Howells

        2014/03/24 at 08:18

      • I don’t think you will get an answer Selina, leps are a law unto themselves. I don’t think it is in their remit to connect anyone, just to ‘advise’? I attended many such workshops when project access (£20M) funding was available in our area in the early part of the last decade. They were fine meetings with nibbles and tea, and people from microsoft, HP etc showing off their shineys, but the SMEs were all saying ‘but we can’t get a connection so how do we use these toys’ but there were no answers. I gave up going to the workshops. The same thing is happening again, and millions are being wasted cold calling, giving presentations and advising. ie: use the BT checker, if your area isn’t on the list then form an action group and lobby for it. work for BT for free in your spare time to engage your community. blah blah. As if busy SMEs have the time to work for nothing, with no end result if they are on long line lengths. been there, done that, got the tshirt.


        2014/03/24 at 08:29

  5. The rosy picture painted by Surrey County Council at contract start was 99.7% superfast (>24Mbps) coverage, but has been eroded to 99.7% “fibre” access by end of 2014. Even this is further eroded by an admission that the initial deployment will only cover approximately one third of premises, with future capacity increases being down to BT- confirmed here by recent correspondence with superfastsurrey

    The promises made by BT to Surrey County Council that FTTC would be a future proof infrastructure with products such as Fibre to the Premises on demand becoming available for SMEs have proved, as predicted by some, to be more about winning contracts than a practical reality. Placing contracts based on promises about unproven products still at a pilot stage is madness when others have proper proven products. It is these products that will be necessary in a few years time when the country realises that building a proper superfast infrastructure on a copper foundation that will require high operational and maintenance overheads is the wrong long term strategy.

    Business leaders should by now be aware of false promises from BT. They have all been made before.

    Chris asked whether anyone knows of any altnet supported by a LEP or council. I do know of one scheme for a very large business park where the local business group and a local council wanted to make their own arrangements for broadband with an altnet, but were warned off by the county council, who promise BT will provide a solution as part of the BDUK project – eventually!

    David Cooper

    2014/03/24 at 09:45

  6. I would like to think that naked Emperor is having its hairy bits singed by the heat it deserves but to be fair i think it would take some heads on pikes type revolution to unravel this heavily entrenched closed shop fiasco.

    I like the bit about strong enough signal for 4G / 10 Mbps inside properties. So a mast every few hundred metres out in rural england then, where a lot of the properties have 2ft+ thick walls and invariably full of flint.

    The same for anywhere there are new shiny super insulated new builds too with their walls and ceilings of celotex foil lined warmthness!

    As the article infers, these people have absolutely no clue what they are on about. There is no sign of anything more technically competent than what would be expected from a sales and marketing department. There never has been.

    Does anybody really believe the meeting next Friday where £10M is being spent to “find out alternative solutions for the final 5%” is really anything to do with that claim?


    2014/03/24 at 11:12

    • BT will be after the last £10m too, snouts in troughs to stop anyone else getting in there. Its not as if they need the money, they make billions, its just that they need to ensure nobody else gets a look in. I haven’t heard how the meeting went, but time will tell. And the history is here in these pages for our children and grandchildren who will ask why we didn’t Do Something. At least we can say we tried, but the telco lobby and their multimillion pound marketing budget drowned out our voices.


      2014/03/30 at 09:00

      • I’m sure BT would not say no to the £10m, but the invitation is to “suppliers”. Is BT a “supplier” or is this really asking the equipment vendors to scratch their heads a bit?
        “Suppliers can submit bids in three different categories:
        Technology – seeing whether a technology that works can be used in remote areas
        Operating models – trying novel operating models such as joining smaller networks together into a common larger network
        Financial – testing innovative public / private funding models that could bring in new investment.”
        BT doesn’t do tech any more – it’s a consumer of other peoples’ tech; its operating model is monopoly; and financial – well, once you think it through, Build and Benefit has limited appeal, to put it generously.


        2014/03/30 at 19:46

  7. […] BrOken Teleph0n3 have posted this interesting article: […]

  8. Re the 4G comment about a mast every few hundred mtrs.


    There is 4G spectrum allocations in the 2.6Ghz and 800Mhz bands. 2.6 is good for citys where you do have site every 100mtr and you have lots of users, but the lower 800mhz band is very good for the rural areas – it goes further, propergates through walls, and isn’t so upset by rain. Both bands have there pro’s and con’s but the idea in the mind was very much this – to give people the choice of how they use the allocations to provide coverage to areas typically suffering with lack of fixed line access, or even a workable 3G signal indoors.


    2014/04/04 at 10:02

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