Real fibre broadband comes to 500 Northmoor homes

In a rare bit of good news for the altnet community, Gigaclear announced it has won funding from the Rural Community Broadband Fund (RCBF) to design, build, implement, and operate a fibre to the premises (FTTP) broadband network to serve around 500 homes in Northmoor, Oxfordshire.

Just weeks ago Gigaclear scrapped a planned rollout in Dun Valley, Wiltshire after it discovered BT planned to use taxpayers’ money to provide a fibre to the cabinet (FTTC) service to the area.

Gigaclear won the contract in an open procurement by West Oxfordshire District Council (WODC) after the parish secured an RCBF grant from the Department for the EnvironmentFood and Rural Affairs (DEFRA). The value was not disclosed.

In a survey of residents’ needs, 14% of respondents said they could get no broadband service at all. A quarter of responses were either from business premises or from residential premises used by people to work from home and/or run their own businesses. Better broadband was high on their priority list.

Graham Shelton, chairman of the parish council and leader of the broadband group, said talks with Oxfordshire County Council revealed the parish would be likely to fall outside the area covered by Oxfordshire’s £4m Broadband Delivery UK (BDUK) subsidy. “That freed us to pursue other options. We were aware of Gigaclear’s work elsewhere, so were delighted they won on merit.

“The network will ensure that everyone can obtain equally superfast broadband and that it will be available to all properties in the parish – including a number of caravans.”

Gigaclear is expected to finish the network in September.

BDUK whistleblower vindicated by BT cabinet deal

Mike Kiely, the sacked BDUK whistleblower who warned that BT is inflating the cost of street cabinets for next generation broadband access in rural areas, has had his prediction vindicated by a BT deal with a parish council.

BT says it is to supply fibre to two new street cabinets it will install in the Oxfordshire village of Binfield Heath, giving villagers access to an ‘up to’ 80Mbps broadband service.

BT says the village, 2.9 miles by car from the closest exchange in Caversham, was not included in its commercial roll-out plan. However, the 648 residents (according to the 2001 census) clubbed together to find the necessary £56,000, or £28,000 per cabinet.

BT’s press release quotes Paul Rollason, chairman of Binfield Heath Parish Council, saying, “The residents were determined not to miss out on faster broadband speeds, and formed an action group to talk to BT about how we could help the economic case to bring fibre to our part of Oxfordshire. They worked out the extra cost to rearrange and uplift the network, and between us, we have raised the funds.”

Bill Murphy, BT’s managing director for Next Generation Access, said, “Binfield Heath’s residents … really engaged with us around the best solution for their community, and together we found a way to bring fibre speeds to almost the entire village; it’s a fantastic result.”

For BT. Two years ago the villagers of Iwade in Kent paid £12,667 for a street cabinet and fibre link to the exchange in Sittingbourne 4.4 miles away by car, a mile and a half further than the distance at Binfield Heath.

Prices rise, but costs don’t in BT’s divide and conquer NGA strategy.

Iwade’s bill was close to the £13,000 average cost of cabinets installed during phase four of BT’s next generation (NGA) broadband roll-out in Northern Ireland, according to Kiely’s confidential report.

Kiely’s report showed that BT was inflating the cost of rural NGA cabinets to around £30,000 each, pretty much what Binfield Heath is paying.

The department of culture media and sport (DCMS), which manages BDUK, sacked Kiely after he blew the whistle on BT’s apparent price gouging and his report leaked to Br0kenTeleph0n3.

Binfield Heath vindicates Kiely’s report. Culture secretary Maria Miller should re-instate him at once, and sack those who turned a blind eye to his warning.

KMPG’s £2.1m for BDUK broadband procurement work

The department of culture media and sport has paid the accountancy and consulting firm KPMG £2.15m for designing and running a broadband procurement framework that has resulted in just two suppliers, BT and Fujitsu, competing for some £830m in state funding.

In addition, the European Commission’s DG Competition, which must approve funds issued under the programme designed by KMPG, has still to approve it, more than six months after it was finalised.

Pinsent Mason, the law firm that signed it off, got £711,000.

The details, which are published as part of the DCMS transparency initiative, show that KMPG received £1,179,629.94 for ‘Temporary staff: interim managers’ between 12 July and 7 December last year, and a further £968,334.78 for ‘management consultants’ between 12 January and 27 March this year.

The person leading the project, whose identity is not disclosed in the DCMS documents, was on the senior civil servants’ pay scale of SCS1, which starts at £58,200, and goes up to £117.800.

KPMG was brought in via a pre-existing Treasury procurement framework. Civil service insiders were reportedly shocked by the temporary staff’s lack of experience in procuring telecommunications products and services, although they had experience in other large public sector procurements.

The framework they produced was highly controversial because it set eligibility thresholds too high for all but the largest suppliers. This was despite government desires at the time for at least some work to go to small and medium enterprises, and for communities to play an active role in the procurements. In the end nine firms were invited, and seven pulled out, leaving only BT and Fujitsu.

The on-going delay in getting the framework approved by Brussels has prompted several county councils to go their own way.

BDUK money may start flowing now that DCMS has appointed BT and Fujitsu, but leading telecoms lawyer Mike Conradi of DLA Piper, warns that any money actually disbursed may invite legal action from existing community network operators under state aid rules.

Have BT & Fujitsu unlocked BDUK’s millions for rural broadband?

It appears that BT and Fujitsu have signed contracts to supply broadband infrastructure under the BDUK framework following months of negotiation between the department of culture media and sport and the European Commission’s competition authorities over state aid issues.

Unconfirmed reports on the EDP24 website say the county councils’ broadband procurement programmes can begin at last after the names of the two suppliers were revealed last night. However, the press release sites for BT, Fujitsu, DCMS and the DG Competition, which has to rubber stamp the terms and conditions for state aid, carry no mention of the deal.

Br0kenTeleph0n3 understands that a deal has been done, but it’s being downplayed as a ‘soft launch’.  However, officials have been told not to deny it if asked.

The government has set aside more than £830m of taxpayers’ money to extend high speed broadband into rural areas and provide cities with up to 100Mbps services. Contracts are expected to enjoy matched funding from the suppliers, and unknown millions more from the EU and other sources like Defra.

The hold-up was apparently due to the DG wanting taxpayers’ money spent on projects that would see the UK’s broadband not spots gets access to a minimum 30Mbps download service between now and 2020. This is above the proposed 24Mbps previously offered by BT and Fujitsu.

BT and Fujitsu were later said to be refusing to sign the procurement framework contract because the extra 6Mbps target is likely to raise their costs considerably. However, contracts already signed, such as in Cornwall and Rutland, will apparently go ahead because they were done outside the BDUK framework.

Cumbria County Council recently rejected proposals from both suppliers, sayin it is looking for a ‘future-proof’ solution.

It will be interesting to learn who blinked. Did BT and Fujitsu agree to go for a minimum 30Mbps service? Did DCMS agree to give them more taxpayers’ cash? Did the DG compromise Europe’s Digital Agenda targets in the UK’s case?

We hope to find out on Monday.

Cornish in Facebook grumble at BT’s broadband costs

It’s easier for politicians to attract brickbats than bouquets, and opening up on Facebook is sure to encourage the disaffected to have their say.

Independent Cornish councillor Andrew Wallis revealed recently that some residents are unhappy with the cost of Cornwall’s “superfast” broadband service. Supplied by BT, the service is now available through 52 exchanges, he posted.

“Despite what some may see as positive news for the county, the first five comments the post received (all within half an hour) were negative, with comments aimed almost exclusively at the cost of the service and how unaffordable this is for all but the well-off,” he wrote in a separate post about social media.

Cornwall is poor. Average annual earnings are 18% lower than the UK average (£20,982 vs £25,727 – 2009 figures). Almost 90% of businesses have fewer than 10 employees, and nearly a quarter have annual turnovers of under £50,000. Some 14.4% of workers are self-employed compared to the UK average of 9.1%. The council, with 22,500 staff, is by far the biggest employer.

BT’s “up to” 100Mbps Infinity service is currently £35/month plus line rental from £10.75, or about 3% of average monthly pre-tax income. The price of the entry level service puts it comfortably inside the UN Broadband Commission’s target of less than 5% of monthly income, but is Cornwall a developing nation?

There also appears to be some confusion at the council about what it is getting for the £132m contract it signed with BT.

Replying to Facebooker Sheena Trigg, a council spokesman says, “By the end of 2014, 80% of premises in Cornwall are expected to have access to optical fibre broadband…”

The council’s original statement says only 50% are expected to have access to a 100Mbps fibre to the premises (FTTP) service. So, was the Facebook reply simply an error or has something changed? Has BT suddenly found it possible to fibre-up 30% more premises for no extra money? Or has the council has found more money to chuck at BT?

We await the council’s reply.

How BT strangled Ewhurst’s FTTP project in red tape

BT invoked EU red tape to scupper a communmity-inspired partial fibre to the premises (FTTP) project in Ewhurst, Surrey, condemning villagers to a long wait for high speed broadband.

This emerged today, with the publication of a letter from the Surrey County Council explaining why it withdrew a £180,000 grant for the project .

The council’s letter says, “EU State Aid regulations do not allow public funding to be spent in areas that are included in BT Openreach’s partial fibre upgrade areas.”

Ewhurst has been and still is plagued by long distances to the local exchange, poor condition of the ducts, lots of poor quality (aluminium) cables and an unsympathetic incumbent. So it called for tenders, secured a quotation from Vtesse Networks and a “non-compliant” reply from BT, lobbied for the money, was awarded a granti n December 2010 from Seeda , the local development agency, and was about to sign the order when the grant was withdrawn, scuppering the project.

All this came out in February, almost exactly a year ago. Council and funding agency staff refused at the time to explain their decision, claiming, off the record, that they were under a non-disclosure agreement between them and BT.

At the time, there was no public indication that BT intended to upgrade the Cranleigh exchange that serves the two villages.  As recently as March 2010 BT wrote to Ewhurst saying that Cranleigh was not not on the “current or next phases” of the NGA (next geneation acces) FTTC schedule. This meant EU state aid rules should not have come into play. Then BT spoke to the county council.

The council now says, “Following BT Openreach’s inclusion of the Cranleigh exchange… in their national fibre upgrade programme, the £180,000 of funding being referred to was withheld…” BT added Cranleigh in April, at least three months after the grant was witheld.

So what’s happened to the money? According to the council letter, “The funding stream … is no longer in place and the £180,000 cannot be accessed.”

To be fair, it might have wound up in Defra’s £20m Rural Community Broadband Fund (RCBF) as part of its Rural Development Programme for England, which targets communities in remote areas. The council suggested that Ewhurst residents might like to approach the RCBF. After all, Ewhurst is 10 miles from Gatwick Airport.

There are problems with the RCBF. It provides only up to 50% of the project cost, after the expense (and all the risk) has been incurred, with no indication of what is an allowable expense.

Also, any approved plans must tie into the county’s broadband plan if the county council receives money from BDUK. This gives the incumbent operator, most likely BT, an insight into who is looking for funding, what their plans are, and potentially repeating the Ewhurst story.

But BT is laying fibre in the village. Walter Willcox, who helped lead the Ewhurst project for the residents, says, “As far as I can deduce BT are spending a small fortune laying what I expect to be a bespoke and restricted fibre network for their FTTC, all the way from Cranleigh but then only install their small 100 (line) service FTTCs instead of Vtesse’s 500 line cabinets.

“Whilst I expect the small cabinets will be adequate for say a couple of years BT will then be forced to spend very substantial amounts on expansion – unless they are about to do FTTP for the whole country.”

Hold your breath if you feel lucky.

Virgin Media gets first 4G mobile customers

Virgin Media Business has landed its first customer for next generation mobile backhaul, MBNL, the 50:50 joint venture between Everything Everywhere and Hutchinson 3G UK.

The firms today announced a £100m eight year deal to build 14 “aggregation sites” over the next 18 months to provide 1Gbps synchronous backhaul to the MNO. Virgin Media declined to say where the sites will be, but provided a links to a map of its core network.

The deal will speed up data rates to smartphones around the country, reducing network congestion as each cell site will be connected to the aggregation centre with optical fibre, Virgin Media Business said in a statement.

The auction for 4G frequencies, the 800MHz and 2.6GHz, is expected to start in 2Q2012 following a short delay in the auction design by Ofcom, the communications regulator, which is conducting the auction.

4G will allow smartphone users with the right handset to receive up to 100Mbps data rates.

Apple to pay Nokia to settle patent disputes

Apple is to pay Nokia an undisclosed one-off fee and on-going royalties to settle patent litigation between the rival mobile phone makers.

The deal announced on 14 June, licenses Apple to use Nokia technology in its best-selling smartphones. Nokia said it is expected to help the firm break even for the second quarter.

Commenting on the deal, Nokia CEO Stephen Elop suggested the deal could push Nokia towards becoming a design shop, licensing others to use technology it develops.

“This settlement demonstrates Nokia’s industry leading patent portfolio and enables us to focus on further licensing opportunities in the mobile communications market,” Elop said in a statement.

Nokia, which has the largest installed base of mobile phones in the world, is being challenged by rivals Samsung for low end phones and by Apple and Google’s Android operating systems for high end smartphones.

Nokia said that during the last two decades, it had invested some €43bn in research and development, resulting in over 10,000 patent families.

Suffolk gets £250k for broadband wireless and FTTH projects

We’ve been here before. A wireless broadband project gets funding from a development agency only to find that the money mysteriously goes into a pool for a county-wide broadband project usually led by BT.

This has happened in Lancashire, in Surrey, Cumbria, Cornwall, Norfolk, Rutland, North Wales and other places.

The latest project to emerge centres on Parham in Suffolk. The East of England Development Agency (EEDA) has awarded a £250,000 grant to Suffolk Acre (Action with Communities in Rural England) to develop high speed broadband fibre and wireless mesh networks.

The news comes just weeks after Suffolk had a £20m bid for BDUK money turned down. Suffolk Acre has been invited to a county council meeting to see how it can help further the BDUK bid.

Operations director for the Suffolk Acre charity Roger Turkington told local radio the two programmes were complementary. “We want to see the whole of Suffolk fibred-up,” he said.

The wide area wireless network is expected to provide access speeds of 50Mbps to approximately 30,000 homes and 4,000 businesses on the Suffolk coast and Waverley district, and possibly inland. A  fibre to the home (FTTH) deployment in Parham will reach 100 homes, 20 businesses and the Framlingham technology centre.

Turkington said the end game was to have optical fibres to all homes, but  “commercial realities” made it unlikely without outside funding. He said the estimated cost of fibring-up the whole of Suffolk ranged between £400m and £800m.

He said rural communities had to be self-reliant and do things for themselves. But that didn’t mean they should become network operators, he said.

He said Parham had been chosen for its proximity to the Framlingham technology centre which housed a company called Miniflex. Miniflex made “all sorts of fibre optic connectors and ducts and various widgets”, he said. “They’re going to help us with their expertise.”

Jenny Stockman, business development manager at the technology centre, said a high speed fibre optic broadband connection had been “absolutely essential for all of the businesses at the centre for 10 years”.

Suffolk Acre is preparing invitations to tender. It hopes to have the network up and running by the end of the year.

It is working with the Plunkett Foundation and the Independent Networks Cooperative Association.

BDUK reveals next £50m broadband investment

Wiltshire, Norfolk and Devon & Somerset will together receive around £50m from the government to extend high speed broadband access to residents and businesses, the government said today.

It also confirmed the creation of a £20m fund specifically to extending such access to rural areas.

The moves are the next step in the government’s plan to give the UK the “best broadband in Europe” by 2015. To do it, it has set aside £530m, and hopes to attract matching funds from European development agencies, network operators and other government budgets.

The four counties join North Yorkshire, the Highlands and Islands of Scotland, Cumbria and the Herefordshire borders in winning BDUK money. These counties got the nod from the BDUK almost a year ago, and are still in the procurement stage of their projects.

A BDUK statement on 27 May said the new bid winners would now start their procurements. It hoped they would begin upgrading their networks within a year.

Devon & Somerset were the big winners, attracting £30m, with Norfolk getting £15m and Wiltshire £4m. The final amounts will be decided “in the coming weeks”, BDUK said.

The funding round attracted 18 bids. Last week, culture minister Jeremy Hunt told the West Sussex County Council, a losing bidder, that BDUK would work with the losers to improve their chances of government money.

BDUK said too the latest news came “ahead of an announcement later this year on funding for every local authority in the country”. No further details were immediately available.

BDUK said it “anticipated that a mix of technologies will be used, including mobile, satellite and fibre connections to hubs in the heart of communities. It is hoped that suppliers will start rolling out upgraded infrastructure within a year. Internet Service Providers (ISPs) will then use these networks to offer affordable services to homes and businesses.”

Comment

The government’s emerging strategy to work through county councils to deliver “next generation access” mirrors its earlier strategy on first generation broadband. Basically they gave BT all the money to upgrade local exchanges to provide ADSL connections over copper wires. Which BT did, and now claims that 99% of homes with telephone lines can get “broadband”.

The government’s action then pretty much translated BT’s former monopoly in telephony into a present one in broadband, especially in the two-thirds of the countryside outside the towns,

BT’s coverage claim is true. In practice the quality of it’s service in terms of speed and reliability are wanting, especially when compared against the service required by customers, or against competitor nations’ ambitions, That said, communications regulator Ofcom and other bodies reckon the UK has the cheapest, most widely used broadband access in Europe, if not the world.

BT has already budgeted £2.5bn to upgrade the parts of its network that cover two-thirds of the population, and has said it will match government funding for the next 25% of the population.

A month ago, Fujitsu Telecom and Virgin Media offered to invest £2bn provided they got around £500m from BDUK and cheap access to BT’s poles and ducts. But West Sussex County Council’s experience suggests the proposal is aimed at extending Virgin Media’s cable TV footprint in towns rather than rural areas.

What seems to be missing from the broadband dialogue is a genuine attempt to find alternative sources of money where investors are prepared to wait for a return.

It is common cause that communications networks have become the “fourth utility” and the associated investment risk should therefore be evaluated accordingly. If patient investors cannot be found, it means they trust neither the government nor the management to deliver over the period. 

BT’s MD for next generation roll-out, Bill Murphy, says most BT projects today won’t get funding if payback is more than two years off. The breakeven period on its present network build is 12.5 years, he says.

Without knowing the cost basis for this claim, it is impossible to verify. But assuming he is right, the working life of copper circuits is at least 40 years (BT is working hard to extend even that), and the working life of optical fibre could be many times more.

Why should not BT’s, or indeed any other network operators’ investors not look for a return over similar periods? If only governments can afford to wait that long, why should they simply give money to private firms who will then squeeze their new assets for as much profit as they can wring out of them in the shortest possible time?

In other words, has the time come for the government to consider renationalising Openreach as the nation’s network utility?