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Posts Tagged ‘Ed Vaizey

Lies, damn lies, and broadband statistics

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VM's contribution to the UK's high speed broadband figures is twice that of BT. Source: Company quarterly reports

VM’s contribution to the UK’s high speed broadband figures is twice that of BT. Source: Company quarterly reports

Ofcom has released a report suggesting that the UK is leading its peers in the race to become a superfast broadband nation.

For various reasons it chose to measure the UK against France, Germany, Spain and Italy, rather than the EU28, the Nordics or the members of the Commonwealth of Independent States, formerly known as the Soviet Union.

Ofcom found the UK has the highest broadband take-up (all types, by household), at 83%; the highest proportion of people to have bought goods online over a year (77%); the highest weekly usage of the internet (87%); and the lowest proportion of people who have never used the internet (8%).

Ofcom’s own figures for fixed connections, quoted in the report, give a more optimistic view: “France (is) still leading the EU5 with 36 connections per 100 people, followed by Germany (35 connections per 100 people), the UK (34), Spain (24) and Italy (22).”

Ofcom went on to say, “Eurostat data suggests that 83% of UK households had fixed broadband access at that time, the highest reported rate of household penetration among the EU5. Our own research suggests that 75% of UK households had fixed access broadband connections in October-December 2013.

“Take-up of superfast broadband, which is capable of providing speeds equal to or greater than 30Mbps, had reached nine in every 100 people in the UK at the start of last year, the highest in the EU5 ahead of Spain (6 in 100) in second place.”

When questioned on this, Ofcom responded, “We’re slightly mixing data here. 83% refers to households and comes from Eurostat (Q1 2013); the 9% superfast up figure is for individuals and comes from Cocom (Jan 2013). So we can’t combine the two.”

We also asked how many households could access broadband at more than 30Mbps, and how many received less than 2Mbps in Market 1 and Marlket 2 areas, ie those where BT has little or no competition. Ofcom can’t tell us because it doesn’t have the data.

Ofcom responded, “In order to get the picture across speeds, I’d suggest our Infrastructure Report Update 2013, which has this:

Broadband take-up: 72% of households (Q1 2013 – p.19)

>30Mbit/s take-up: 16% of premises (households and small businesses) have superfast connections/22% of BB connections are superfast (June 2013 – p.27)

<2Mbit/s take-up: 8% of connections (p.21)”

The Office for National Statistics (ONS) says there were 26.4 million households in the UK in 2013. Of these, 29% consisted of only one person and 20% consisted of four or more people.

BT, in its quarterly report to 31 December, said it had “now passed more than 18m premises in the UK with our fibre broadband network and (is) making progress with extending the reach of fibre to rural areas.”

As that covers 68% of UK homes, that suggests that BT has completed its roll-out to “two-thirds” of commercially viable UK homes.

BT went on to say “Openreach achieved 339,000 net fibre connections, an increase of 38%, with around 2.4m homes and businesses now connected. We added 228,000 retail fibre broadband customers, up 14%, and now have around 1.9m customers.”

Regrettably, BT doesn’t say what speeds its customers get. Regular readers will know that BT’s “up to 80Mbps” service, based on fibre to the cabinet GPON/VDSL technology, is a bit of a pig in a poke. Actual speeds depend on distance between the cabinet and the premises, line condition, network congestion, content filtering, traffic shaping and other factors that degrade the service people pay for.

Other things being equal, line length is the main factor that affects broadband speed. Openreach keeps secret the average line length, but it is longer than 1km. Analysys Mason has calculated it at 1.704km. According to ThinkBroadband, that should deliver a download speed of under 15Mbps; for 30Mbps you need to live within 750m of the cabinet. BT speakers have earlier claimed the average length of the line between premises and cabinets is around 900m. According to ThinkBroadband, this would give a download spped of about 24Mbps.

Virgin Media also operates a fibre to the cabinet (FTTC) service based on DOCSIS 3.0 technology using coaxial TV cable rather than twisted copper pair wires between the cabinet and the home. Its latest quarterly report reveals that “Of all of our 4.4 million internet customers, 3.2 million, or 74%, subscribe to superfast broadband services of 30 Mbps or faster, an increase of 1.0 million in twelve months, including a 209,300 increase in Q4. We continue to see that nearly half of our new internet customers subscribe to speeds of 60 Mbps or higher, showing the strong, ongoing demand for faster speeds.”

Now we are in a position to judge whether Ofcom’s claims to be leading Europe are worth anything, even if true in the limited context it chooses.

Adding BT’s 1.9 million and VM’s 4.4 million gives us 6.3 million customers. BT said Openreach had connected 2.4 million premises, so we should add 500,000 LLU lines, giving a total of 6.8 million customers connected to a fibre-enabled cabinet. That is a fixed line penetration rate of 26%. However, if we consider that, according to Analysys Mason’s figures,  less than half of those on Openreach lines will receive a service of 30Mbps or faster, the household penetration rate drops to around 17%.

If the Ofcom report is measuring progress towards the EU’s 2020 target of 30Mbps for all with 50% using a 100Mbps service, as it seems to be, then we are a long way short of achieving the EU targets, or even Ed Vaizey’s nebulous “best broadband in Europe”.

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Written by Br0kenTeleph0n3

2014/03/13 at 06:54

Anger mounts over rural broadband delays

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BrokenTelephone is grateful to Patrick Cosgrove for assembling the following reports of wide-spread and growing anger with the politicians, civil servants and operators responsible for the UK’s next generation broadband programme, especially in rural areas.

In a letter on behalf of the South-west Shropshire and Marches Campaign for Better Broadband, Cosgrove wrote to subscribers as follows:
1. WHERE IS THE LEADERSHIP ON RURAL BROADBAND (1)?

The agitation over rural broadband seems to be moving to Westminster. And not before time.

We’re quite used to Lib/Dem MPs breaking ranks within the Coalition but, with the exception of Europe, not so often Conservative MPs.  That seems to be changing now with respect to the countryside and the cross-party Fairer Funding Campaign (see http://www.rsnonline.org.uk/politics/mps-pile-on-pressure-over-rural-funding), of which the broadband issue is part. Put it this way, if you were in government, large numbers of your rural voters were thoroughly fed up with the reality of no decent broadband in the foreseeable future and many of them were stampeding in the direction of UKIP for a whole host of reasons (see http://www.spectator.co.uk/features/9069211/rural-revolt/), wouldn’t you do something about it with an election starting to loom? Despite David Cameron’s staunch defence of BDUK’s rural broadband programme, and Maria Miller’s shake-up of BDUK management, it seems that even Conservative MPs are starting to publicly question matters.

This is what John Glen (Conservative Salisbury) said on 31st October: “I thank the minister for that answer (to a general question about the progress of rural broadband roll-out plans), but what do I say to the local authority and residents in village such as Pitton who believe they are in the percentage that will not qualify for the imminent roll-out through the BT deal? They want to be free to develop new community-based solutions with alternative providers, as they anticipate they will not get anything from BT for a long time.”

To which the minister, Ed Vaizey, replied, “I am happy to meet my Hon Friend to discuss any issues. The Rural Community Broadband Fund (RCBF) is designed to support community broadband projects that the programme is no reaching.” To which we say, “But we know that the RCBF money is languishing in Europe because any application has to confirm that it won’t overbuild on BT’s intended infrastructure, only BT won’t tell anyone with any precision where they are going to put that infrastructure.”

Shortly afterwards, Anne McIntosh (Thirsk and Malton Conservative) asked, “What will my Hon Friend say to the 5% of those living in the hills, particularly farmers, who will not have access to superfast broadband by 2016? Will he implement the Select Committee report recommendation that they be given advance warning, so that they can make alternative arrangements to those on offer from BT?” To which Mr Vaizey replied, “As I have said repeatedly, it is up to local authorities to publish their local broadband plans and I am delighted, particularly after the Secretary of State wrote to them, that many have now done so. People in Wiltshire and Yorkshire will know where the project is rolling out”. To which we reply, “Scroll down to the next article to see what a farce that is.”

Then Philip Hollobone (Ketttering, Conservative) said, “It seems to me that BT is a big company that sometimes does not treat small communities very well. May I draw to the attention of the Minister the village of Rushden in my constituency, where residents are complaining that they are not getting the the proper broadband they deserve, despite their best efforts”. And Mr Vaizey replied, “I hear what my Hon. Friend says. BT is a big global company that we should be proud of, but from time to time issues will be raised by our constituents. I am happy to meet him to discuss the problem in detail”. To which we reply, “It’s not just Kettering, Thirsk & Malton and Salisbury. It’s the whole country, including 1,208 people in rural Shropshire who signed a petition making the very same points, and 31 parish and town councils who are also very unhappy.”

We  desperately need some strong leadership on this at Westminster as it’s flying in the face off all reason to declare that everything’s fine when it plainly isn’t. A little more honesty and a lot more action would be a great help.

2. DID THE MINISTER SAY PUBLISH LOCAL BROADBAND ROLL-OUT PLANS OR DIDN’T SHE? ?

Knowing who is or isn’t in line for having their broadband upgraded is essential for communities that want to make alternative arrangements. If you don’t know, you can’t apply for public subsidy such as DEFRA’s RCBF grant in case it ends up double-funding an area. Even if you don’t want to apply for funding and you might have sufficient people to make it a viable proposition, alternative broadband providers are not going to invest in your area unless they are certain that BT won’t be operating there in the future, and no-one will tell them.

Here in Shropshire we sent a Freedom of Information Request to Shire Hall asking for a detailed broadband deployment map. They gave it to us but it didn’t tell us very much. We’d seen the Public Accounts Committee recording where Sean Williams of BT said that there was no reason why such information shouldn’t be available, and then we read that Maria Miller of DCMS had said she was “keen to see this information made available” so that other broadband Internet Service Providers and community groups could “determine whether it is worth their while to develop local broadband projects to fill in gaps” so we’d hoped for something a bit more precise. Later we learned that FOI requests were being sent to local authorities all across the country and either receiving similarly opaque answers or, as in Devon’s case for example, were told that they daren’t publish for fear of being taken to court by BT, their so-called “partner”.

Now Cumbria County Council has told Computer Weekly, “The … matter was raised at the Public Accounts Committee (PAC). However, subsequent clarifications issued by Maria Miller’s office defined what BT meant by information that could be shared. The list of postcodes to which you refer, called the speed and coverage template (SCT), is excluded. BT considers that (it) is commercially sensitive.”

This decision could leave community-based broadband schemes schemes in limbo for several years if they were hoping for RCBF money (which won’t be there for much longer), and no chance of alternative providers plugging the gaps on a commercial basis for fear that BT will suddenly announce that they might bring fibre to those areas after all (as appears to have happened in parts of Wales and Worcestershire, and probably elsewhere). Meanwhile BT has added to the confusion by saying that it remained happy to hand over the details for release by local councils. It seems that the Department for Culture, Media and Sport (DCMS) has chosen to shirk responsibility for the mess by saying that it was ultimately a decision for BT and the local authorities.

The full story is here: http://www.computerweekly.com/news/2240207856/BT-and-Whitehall-tell-council-to-keep-BDUK-postcodes-quiet

Interestingly, North Yorkshire was a pilot area for rural broadband, and it seems that its contract with BT was different because it can publish anticipated deployment to post-code level (see next link). Therefore some bright spark at BDUK or DCMS must have agreed to a tightening up of all the local authority contracts that followed the pilot. It would be great if we had a map like this.

http://www.superfastnorthyorkshire.com/where-and-when

 

IT SEEMS THAT SOME LOCAL AUTHORITIES HAVE HAD ENOUGH?

Cumbria County Council and Devon have now spilled some of their beans. We wonder if this was code for  “We’ve been stuffed by BDUK and BT so can’t say too much, but please read between the lines”. After all, what local authority in their right mind wouldn’t want  100% of their residents to have good broadband, or would want the degree of continuing aggravation that’s resulted?

Refreshingly, in Lancashire where there is still two-tier local government and a thriving community broadband scheme (B4RN) that doesn’t appear to get on with BT too well, Lancaster City Council’s Scrutiny Committee has asked Lancashire County Council to:

1. Request that BT as soon as possible, produces a clear roll out programme for its superfast broadband in the Lancaster District to enable other providers to work in areas not covered by the BT programme

2. Seek immediate permission (!) of BT to provide a clear statement of the terms of their joint agreement

3. Request the removal from any future rural broadband contracts with BT that are on a non-disclosure agreement basis to facilitate openness and transparency.

(Plus more – see this link for the full story: http://www.ispreview.co.uk/index.php/2013/10/uk-gov-creates-confusion-bt-bduk-broadband-coverage-data.html

West Oxfordshire District Council, another second-tier local authority, also seems to have had enough, but they’ve been very polite about it so far.

http://www.witneygazette.co.uk/news/wgheadlines/10770542.Pledge_to_work_for_extended_rural_broadband_coverage/

We will contact them to see if we can learn anything from their approach.

 

WHERE IS THE LEADERSHIP ON RURAL BROADBAND (2)?

Therefore, the situation isn’t just bad, it’s actually worse than before the rural broadband contracts were signed with local authorities. Up until then communities could apply for RCBF money, now there’s no point. Up until then alternative broadband providers were moving into new areas but now they are not (or if they are they’re keeping it secret – what madness!). And to make matters worse, BT, Sky, Virgin etc have been signing large numbers of people up to their entertainment and sports packages, irrespective of whether these customers have superfast broadband or not, so the whole system is starting to slow up because too many demands are being made of it.

We repeat, “Where is the leadership?”

 

Written by Br0kenTeleph0n3

2013/11/07 at 03:18

35% is SuperConnected success, says BDUK

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need-for-speed-highresBDUK has pronounced itself happy with the results of its two month pilot of a voucher scheme to increase small business connectivity in cities, even though only 35% of requests for funding led to a quotation.

The original £150m SuperConnected Cities project aimed to set up fibre to the premises (FTTP) networks in 22 cities. Following legal objections from BT and Virgin Media, this was replaced with the voucher scheme. The scheme allows SMEs to apply for grants of up to £3,000 to fund a connection to a broadband service that gives “step change” in the speed received.

The scheme was red-lighted (deemed in imminent danger of failing) in a Cabinet Office report last May.

The £2.25m pilot ran, largely unpublicised, from the start of August to the end of September in Belfast, Cardiff, Edinburgh, Manchester and Salford.

“The supply chain supporting the use of vouchers is either competitive or regulated so this will prevent distortions to competition,” BDUK said.

BDUK reported 59 suppliers registered, though some were inactive prior to the scheme. Sixteen didn’t meet the registration deadline, and a further 19 said they were interested in Phase 2 of the project.

There were 690 voucher requests, of which 443 conditional offers were made (12 rejected), leading to 240 quotations from 28 suppliers.

BDUK declined to give a breakdown of the location of the requests, or many contracts were signed, or the amounts committed.

However, Metronet, a fibre-wireless ISP in the north-west, claimed 13 orders from the voucher scheme. This earned the firm a visit from communications minister Ed Vaizey during the recent Conservative Party conference to learn the secret of their success.

MD James McCall is on record saying businesses depend more on having a reliable service than raw speed.

BDUK said, “Some cities and suppliers have noted that some SMEs fed back that they value the quality of service elements of business grade services and that a service under 30Mbps can represent a significant upgrade in capability. We will consider whether there is an opportunity to be flexible around minimum speed required for business grade services.”

It added, “From our perspective and that of the (European) Commission the scheme the market test have (sic) been successful.”

BDUK is holding two industry days to provide feedback and discuss phase 2 on 18 and 21 October in London. It will present its findings to the European Commission Case Team on 31 October and to the Commission on 6 November. Ministers will decide whether to go to phase 2 shortly after.

Written by Br0kenTeleph0n3

2013/10/17 at 05:02

NAO report on BDUK: blame game starts now

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The government’s rural broadband programme will transfer £1.2bn to BT, finish two years late, and rely on civil servants to establish whether it has received value for money.

“The rural broadband project is moving forward late and without the benefit of strong competition to protect public value. For this we will have to rely on the department’s (culture media & sport – DCMS) active use of the controls it has negotiated and strong supervision by Ofcom,” said Amyas Morse, head of the National Audit Office.

The NAO has been investigating whether Broadband Delivery UK, the quango set up in DCMS, will deliver value for money.

It was expected to be critical; the Cabinet Office National Project report recently judged the BDUK project amber/red, meaning it is in danger of missing its targets. Few will have guessed how bad things are.

In the very baldest terms, the NAO said there is £1.2bn available to provide high speed (>24Mbps download) to areas outside BT’s commercial roll-out to two-thirds of the country. All of it will go to BT.

Central government’s contribution is £530m; the balance comes from local authorities’ budgets which are funded by the taxpayer, and BT. BT’s contribution will be 23%, way down on the 36% estimated in 2011.

There are 44 projects that call for 4.6 million houses to have access to ‘next generation’ broadband; BT has already won 26, and it has no competitors.

The original completion date for 90% of homes was May 2015. Last week DCMS increased the coverage target to 95%, and extended the deadline to 2017.

BT said in response, “BT’s fibre programme has been one of the most efficient in the world with the company going further and faster than industry experts thought possible. BT has applied these cost efficiencies to its BDUK work and so the company is delivering excellent value for money.‬‪”

It argues there was strong competition when prices were set at the start of the process. “That ensured counties have benefited from the best possible terms.
“Deploying fibre broadband is an expensive long-term business and so it no surprise that others dropped out as the going got tough,” it said.

On the specific claim that BT is likely to contribute 23% of the total funding or some £356m, BT said, “We would like to highlight we have committed more than £500m to date. With more than a third of the contracts yet to be signed, including a very large one in Scotland. We believe we will contribute around 38% of the total funds by the end of the programme, which is well above the 23% claimed in the report.”‬‪‬

Asked why, when the state aid issue delayed things for six months, the deadline is now two years later, BT said, “The timescales for when individual contracts are signed are out of our hands as these are dictated by the individual councils. Our commercial fibre roll out is at least 18 months ahead of schedule so we have proved we can roll out fibre at great pace.”

Few Br0kenTeleph0n3 readers will be surprised by the NAO’s findings. But some might be taken aback by the NAO’s plain-spoken statements of fact. It is rare, given that ‘superfast broadband’ has been such an iconic target for this government, and the vested interest in BT’s on-going attempts to rubbish criticism of the project, that the circumstances have been set out so plainly.

Indeed, the NAO has merely scratched the surface. It could have explored and said much more about why the BDUK Framework process attracted just two bidders from nine invited. These were BT and Fujitsu, which pulled out in March.

It could have said much more about the reasons for the six month delay before the European Commission swallowed its reservations and passed the Framework as fit for purpose. The commission spent weeks waiting for information from BDUK.

However, these would have placed responsibility squarely with individuals, and the tradition here is to apportion responsibility collectively, except in the most egregious circumstances.

That said, some people will have a chance to explain what they have been doing for the past three years. They include Colette Bowe and Ed Richardson, chairman and CEO respectively of Ofcom, the regulatory watchdog that became BT’s lapdog. They will face MPs on the culture, media and sport committee on Tuesday 9 July.

Next up on Monday 15 July are believed to be BT Openreach CEO Liv Garfield and Bill Murphy, MD of BT’s NGA project. They have been invited by culture secretary Maria Miller to face representatives from six alt-nets, including B4RN CEO Barry Forde, who are trying to get the go-ahead to build in the ‘Final 10%’ that BT won’t cover. The trouble is, BT won’t say what it’ll cover and when, leaving the alt-net vulnerable to state-funded competition from BT.

If that meeting agrees that BT is not allowed to overbuild where the alt-nets run, the alt-nets might say it was worth the trip.

Finally the Public Accounts Committee, chaired by Labour leader Margaret Hodge, is likely to want to explore why the Conservatives scrapped Labour’s plan for a national 50Mbps broadband network by 2013, funded by a 50p ‘broadband tax’ on fixed phone lines. But who shall be the victims? Will it be communications minister Ed Vaizey, who has presided over BDUK for the duration. What about BDUK head Rob Sullivan, or Matt Agar, who has been the lynchpin in the BDUK works? Or BT CEO Ian Livingston, who in September is destined for the lords and a job as investment minister at the department of business, innovation and skills? Or his successor, the former Procter & Gamble soap and nappy salesman Gavin Patterson?

Entertaining as such spectacles might be, there is serious work to be done. Ofcom’s role may be crucial. But it may need a shake up. It refuses to accept its decision to allow BT to refuse the use of its physical poles and ducts for third party leased lines had any effect on the BDUK process. Yet this was the main reason why everyone except BT and Fujitsu dropped out of the BDUK framework bid. Geo CEO Chris Smedley was particularly forthright in his comments.

Ofcom suggests he should have gone through proper channels rather than ‘have a slanging match’ in the press. Asked why, if it was aware of the problem BT’s terms and conditions for access to its physical infrastructure (PIA) were causing, it did not consult further, an Ofcom spokesman said it believed its feedback process was clear and transparent and should have been used.

The spokesman felt there may be “a new role” for PIA in future. This might also involve Active Line Access, a standard way for fibre carriers to connect that was developed but not enforced by Ofcom.

(There is more to be said about PIA because it is addressed in detail in Ofcom’s Fixed Access Market Review consultation published the day before the NAO report. But that is for another time.)

Just ahead of the NAO report Ofcom set out a consultation that makes it easier and cheaper for firms that rent fibre from BT to switch.

In a more formal statement referring to the Office of Fair Trading investigation into competition in public sector procurements, which include rural broadband and the still-born £150m Superconnected Cities project, Ofcom said it doesn’t regulate public service procurement or contracts. “Rather, we regulate competition in the private telecoms sector. Likewise, the BDUK programmes are entirely matters for DCMS,” it said.

Whether it can persuade others that is the case remains to be seen.

Will Vaizey end B4RN’s wait for broadband money?

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Vaizey - time to take the wait off?

Vaizey – time to take the wait off?

Communications minister Ed Vaizey is expected to sign off at least one application for funds from the £20m Rural Community Broadband Fund (RCBF) on Tuesday.

The application is from B4RN, the high profile DIY fibre to the home network in rural Lancashire. B4RN applied months ago for £875,000 from the RCBF, and is also negotiating a bank loan.

B4RN’s application, and up to 50 others, have been delayed while local councils try to establish where BT intends to roll out its next generation access to broadband and what access speeds and reliability it promises. Early reports suggested BT intends to duplicate two-thirds of B4RN’s coverage in one of the remotest parts of Lancashire.

The government has said the speed and coverage template details (SCT) in BT’s NGA contracts are commercially confidential, but it expects local councils to publish them once the BT roll-out is under way.

However, B4RN had a prior agreement with Lancashire County Council (LCC) for the county to exclude B4RN’s coverage area from BT’s plan. This meant B4RN’s application should have been gone through without reference to BT’s roll-out.

“The hold-up was down to LCC refusing to confirm (to the RCBF) they were not planning on funding BT from the main pot (of state aid) in the same postcodes, this despite our agreement,” B4RN CEO Barry Forde told Br0kenTeleph0n3.

Forde said LCC had asked B4RN to drop a complaint with the European Commission against LCC’s use of state aid to help BT overbuild a pre-existing privately funded network, namely B4RN. He agreed to drop the complaint only after LCC promised to give B4RN’s postcodes ‘immunity’ from state-aided competition from BT. Forde published B4RN’s latest postcodes as recently as April.

LCC did not immediately respond to a request for comment. If it does, we will update the story.

B4RN’s complaint is essentially the same one BT and Virgin Media used to scupper the government’s Superconnected Cities initial £150m plan to see 100Mbps fibre to the premises networks built in the UK’s 22 largest cities. This prompted the extremely well-connected blogger Philip Virgo to suggest that the two carriers be referred to the competition authorities for anti-competitive behaviour.

LCC does a lot of business with BT. Three years ago it handed BT the management of the Cumbria and Lancashire Education Network (CLEO) schools network, which Forde designed, and later signed a £40m contract for its county public service network with the telco. In 2011 it entered a £400m, 10-year joint venture, One Connect, with BT to provide back office services, a deal whose transparency an MP has questioned. BT now stands to scoop £130m from the Lancashire NGA roll-out.

Update

Barry Forde has been in touch to say that the amount B4RN is currently seeking is £875,000, not £750,000, due to a bigger coverage area, and that I should be referring to the Lancashire, rather than Lancaster, County Council. Points noted; changes made above.

Written by Br0kenTeleph0n3

2013/06/30 at 13:37

Questions the NAO might prefer to ignore

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Conservative Technology Forum CEO Philip Virgo has posted a number of questions the National Audit Office may prefer to ignore in its investigation of whether the BDUK process will deliver value for the £1.8bn at risk.

I suspect that Virgo’s questions are slightly misdirected; the Public Accounts Committee is, I believe, the right forum to raise these issues.

Culture secretary Maria Miller is already apparently fighting for her political life, given the number of strenuously denied reports that DCMS is going be shut. She may be seeking an elegant way out of the swamp her civil servants have landed her in.

If so, she could ask the European Commission’s DG Competition to take an urgent look at the BDUK guidance to local authorities on how to deal with RCBF bids. She could confidently expect a verdict that finds the guidelines might lead to an uncompetitive market in the Final 10%.

That would give her an excuse to clean house, get BT to say what it will deliver openly and upfront in its taxpayer funded roll-out, provide a stick with which to beat BT if it doesn’t deliver on time and on budget, and garner some credibility to get fresh investors into the market, and pin the blame for any delays on Europe.

Best of all, it could save her and communications minister Ed Vaizey’s face, although Ed’s will have egg all over it.

Written by Br0kenTeleph0n3

2013/06/15 at 18:20

Government nixes publication of Final 10% boundary details

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Communications minister Ed Vaizey: right place, right time

Communications minister Ed Vaizey: can’t say where the Final 10% is

The government is refusing to disclose the speed and coverage details of BT’s next generation broadband roll-outs in rural areas, preventing community network operators from finding ways to provide services where BT will not build.

This is disclosed in a letter from communications minister Ed Vaizey to next generation broadband lobbyist INCA CEO Malcolm Corbett. Vaizey said these details are regarded as “supplier confidential information”.

Br0kenTeleph0n3 understands that DCMS has sought and received legal opinion on the matter. It has asked DCMS in a Freedom of Information Act request to confirm this and to say what advice was given. DCMS has until 2 July to respond.

Normally reliable sources indicate that the advice was that the public interest now outweighs the supplier’s commercial interests, and that therefore the government can publish the contracted speed and coverage templates (SCTs). Knowing the precise “no build” areas will enable others to fill in the gaps. BT is currently the only supplier to win supplier contracts under the BDUK procurement framework.

“I cannot understand how (keeping the SCTs secret) can possibly be in the public interest,” Corbett said.

Corbett wrote to culture secretary Maria Miller earlier to express concerns over the commercial confidentiality over the SCTs. He said this secrecy endangered independent privately-funded projects because they could face being overbuilt by state-funded BT.

A further concern was that new guidance issued by BDUK gives BT an effective veto over community-led RCBF projects. The guidelines allow BT to do an impact assessment of Final 10% bids on its roll-out before councils can award a bid.

In his reply Vaizey says, “Any project has the opportunity to disclose their plans during the mandatory public consultation held prior to all state aid decisions. Publicly-funded projects are prevented by the state aid rules from overbuilding other projects which have been notified at that point.”

Corbett says this is correct but points out that the reviews took place several years in advance of the final deployment. “It is reasonable to expect operators’ plans to change. BT’s plans certainly will change. BT’s changes are apparently entirely acceptable. Independent operators’ plans will be ignored.”

BT’s speed and coverage plans for BDUK work are “subject to survey”. Further, it appears that even final contracts may be renegotiated.

INCA members have used the Freedom of Information Act to ask a number of local councils for the SCTs. “They are refused,” says Corbett. “Effectively it means that the locations that BT is being paid by the taxpayer to deliver to, along with those that are out of scope, are confidential.”

According to the BDUK guidelines on RCBF bids, where the bid overlaps BT’s coverage area a lot, the local council can ask BT to include the rest in its roll-out. Where the bid only partially overlaps, the council can renegotiate BT’s contract. Changes to the value of the contract with BT will depend on the “materiality” of the changes. (See below for more on materiality.)

Where there is little or no overlap, the council must issue a new tender in which BT is allowed to compete. BT will know precisely where its competitors plan to build and how much it is likely to cost; the bidders will have no such insight into BT’s coverage or its likely costs to extend its roll-out.

BT can use marginal costing to price what is effectively an extension to its existing network, but other bidders will have to bid a fully-costed price. BT holds another ace; the cost, terms and conditions of using its ducts and poles drove Geo and all other invited bidders out of the BDUK procurement framework. If they couldn’t make the sums work, it is unlikely community network operators will be able to.

A further obstacle for RCBF bidders is that they must fund the entire build upfront. They can then apply for a maximum of 50% of their costs to be met from the RCBF fund. BT on the other hand, can negotiate for ‘progress payments’ to help its cash flow.

Further, BDUK estimates that state aid intensities for local broadband projects will vary from 53% to 89%, with an average of 71% across the country, and it may go higher for ‘hard to reach’ places like the Final 10%. So BT has to find less than 50% of the project cost whereas its would-be competitors have to find 100% and claim back half.

Corbett says Vaizey has asked for a list of potential projects and to meet potential investors. “I would be happy to help arrange such a meeting but I can’t see why anyone would invest under these circumstances,” Corbett says.

Vaizey could also ask his colleagues at Defra and BDUK who have received more than 80 RCBF applications. Of these 52 have been asked for more details, and four have been approved for funding. The first approved, at Rothbury in Northumberland, will see BT scoop £460,000 of RCBF money.

Corbett believes the government’s position would be more credible if it were to declare where the Final 10% areas are, based on information it already has, and to encourage more private and community investment by guaranteeing there will be no overbuild funded by the main programme.

“This will have two significant effects: it will signal that the government is serious about competition and investment to help address the Final 10%; secondly it will help allay the very serious concerns about how to obtain value for money, at least in those areas, if not the main programme.”

The National Audit Office is expected to release a highly critical report on the value for money that the BDUK process will achieve. The Public Accounts Committee is rumoured to be lining up BT CEO Ian Livingston and BDUK CEO Rob Sullivan to answer questions arising from the NAO’s report.

Materiality

RCBF projects can only be integrated into an existing Call Off Contract under change control if the change does not constitute a material change under procurement law (otherwise a new procurement will be required).

Local Bodies will need to form their own view as to whether the proposed change to the Call Off Contract would be considered to be material under procurement law. The current materiality test is set out below. BDUK will be issuing further guidance concerning the application of the materiality test in the near future.

Under current procurement law the test of materiality involves an assessment of the following non-cumulative factors (known as the Pressetext test):

Does the change demonstrate an intention to re-negotiate the essential terms of the contract (risk allocation, price etc)?

Has there been a change that could have affected the tender outcome or affected a bidder’s approach to their tender submission?

Has there been a change that could have altered who decided to respond to the original call for competition?

Will there be a shift in the economic balance of the contract in favour of the contractor?

Will the change increase the scope of the contract “considerably”?

Was the change provided for or contemplated under the original contract?

Local Authorities should note that the Materiality test applies to all additional funding added to an original county project on a cumulative basis, therefore any other additional funding that has already been added to an original procurement should be taken into account when undertaking the Materiality test.

Written by Br0kenTeleph0n3

2013/06/15 at 15:56