Br0kenTeleph0n3

Following the broadband money

Posts Tagged ‘Kroes

Lies, damn lies, and broadband data

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Is someone fiddling the broadband numbers, and if so, why?

INTUG, the international telecom users group, believes that officials in charge of Europe’s broadband roll-out are being misled by “vested interests”. It has written to Europe’s Digital Agenda boss Neelie Kroes, asking for the source of the claim that the UK has full coverage for basic broadband.

The claim was made in a Digital Agenda working document that said, “Denmark, Finland, France, Luxembourg, Latvia, Malta, Netherlands and the United Kingdom) have already achieved full coverage for basic broadband services”.

INTUG told Kroes, “Our UK Member, CMA (Communications Management Association), and the UK Federation of Small Businesses (FSB) met recently with OfCom and UK government representatives …to discuss broadband roll out. It was clear from the discussion that full coverage for basic broadband is still far from being achieved in the UK.

“This misrepresentation of a reality has been a consistent concern of users in the UK since BT’s often quoted claim of 99.6% coverage of broadband, which was similarly misleading. We would be grateful if you would share with us your source for this information. We can then assist the NRA (national regulatory agency i.e. Ofcom) in ensuring that future statistics on this sensitive topic are reliable and not unduly skewed by vested interests.”

This is not the first time questions have been raised about broadband claims. Announcing a 4G mobile technology trial in Cumbria this week, Everything Everywhere CEO Olaf Swantree said, “New independent research shows that one in five households in Britain could depend on 4G for superfast broadband in the coming years.”

Br0kenTeleph0n3 revealed in March that BDUK’s coverage maps exclude wireless coverage, even wireless networks that local councils are using today.

Sources say that BDUK is also worried about the accuracy of the maps of physical infrastructure such as street cabinets. Apparently BDUK’s maps show cabinets that are often 1km out and one is known to be 5km out. This, of course, drastically affect the ‘reach’ of BT’s Infinity broadband service, which one source put it, “goes 1300m with a following wind, and broadband itself which dies at around 5km”.

A further problem is that only Openreach engineers can tell the actual line length between a street cabinet and a subscriber’s house, and the information in BT’s asset database does not always reflect the actual situation.

These inaccuracies mean local councils may be making investment decisions using information that is wrong and potentially misleading.

We understand that BDUK is at last starting to worry about these issues as it prepares to release almost £400m to local councils to spend upgrading the networks in their “final third” areas.

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Written by Br0kenTeleph0n3

2012/05/04 at 08:02

Invitation to Neelie Kroes – let’s see the colour of your money

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Kroes - put your money where your mouth is.

Here’s an Anglo-Saxon invitation to European Commission’s Digital Agenda champion Neelie Kroes – put your money where your mouth is.

Kroes is clearly frustrated by the lack of progress towards Europe’s  broadband targets – universal broadband access by 2013, and 30Mbps for all and 100Mbps for half of us by 2020.

Speaking in Italy this week, she virtually implored Italy’s geeks to apply for up to €7bn she is putting into the EU’s proposed broadband slush fund, aka the Connecting Europe Facility. She hopes this money will unlock €50bn in private sector funding for next generation broadband.

The facility is there because, she says, “sometimes the private sector seems unwilling to get involved in broadband projects. They see them as too risky, or too uncertain; especially in rural or suburban areas. Support from (the fund) could give that extra assurance that investing in high-speed broadband is safe and profitable.”

A couple of points here. Investment in telecoms is and always has been risky. It’s only a political idea that dial tone or internet access is a human right, and therefore deserving of taxpayer money.

When that idea became popular, governments nationalised the telcos. When it became unpopular, because the state monopoly telcos were expensive, bureaucratic, unresponsive and self-serving, governments sold them off.

Taxpayers seldom saw a penny of their money back directly. They are still saddled, by and large, with “incumbent telcos” whose attitudes and practices are unchanged. So, nationalisation and privatisation were not good investments from the taxpayers’ point of view.

The incumbents have every reason to fear challenger telcos or altnets. That is why they fight tooth and nail to make life difficult or impossible, i.e. risky, for altnets, and so deter investment.

As the German firm WiK Consult shows, only competition forces incumbents to behave better.

Investment in telecoms should stay risky. It keeps people (funders, suppliers and network operators) on their toes, makes them come up with new ideas, and compete for business. It’s Darwinian, but it works. Feather-bedding them with free or cheap money makes no sense.

Kroes says the fund would help reduce “perceived risk” and “crowd in private finance … from anyone who, like me, realises that broadband is a sound investment in tomorrow’s technology.”

So here’s the invitation to Kroes: there’s a brand new network company called B4RN that’s busy putting in a brand new fibre network that will provide rural subscribers with 1Gbps symmetric broadband for £30 a month. I don’t know of a better customer proposition in Europe or the US.

Details of the project, which is a highly tax-efficient investment, are on the web. Of course Kroes should do her own due diligence investigation, and the usual caveats about investments apply.

If Kroes finds B4RN too dodgy to risk a few euros, what chance do altnets have of tapping her fund?

And yes, I do have shares in B4RN.

Written by Br0kenTeleph0n3

2012/04/13 at 08:05

Britain’s broadband budget is £3.58bn (approx)

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News that Europe is preparing a €9.2bn kitty to get broadband from where we are now to everyone having 30Mbps and half of us with 100Mbps left me underwhelmed and puzzled.

Over the weekend I tried to work out from public sources exactly what the UK has budgeted to get the entire country up to 2Mbps guaranteed – almost £3.58bn, not including our share of the proposed Euro-kitty.

If you reckon that we should be able to get at least £500m in matched funding or other “slush funds”, that is pretty close to the £4bn total people were whispering in my ear three years ago.

This is short of the £5bn-odd the Broadband Stakeholder Group said it would cost for national broadband access based on fibre to the cabinet, and a long way short of the almost £30bn for fibre to the home.

For months Digital Agenda champion Neelie Kroes has been asking telco bosses how much for 100Mbps. They have replied, “Well, it depends, but more than you think,” while continuing to sweat their copper assets.

I think we can safely say that when it comes to the final bill for 100Mbps broadband, everyone is guessing, and few are telling the whole truth.

The truth is hard to establish. For instance, looking at Northern Ireland, which is relatively simple, one can see many potential sources of finance: BT, various government departments, and a bunch of European purses as well.

This table is taken from Northern Ireland’s department of enterprise, trade & investment (Deti) web page on superfast broadband.

Northern Ireland
Source of funds Project £m
BT Broadband upgrade 30.00
ERDF via DETI Broadband upgrade 16.50
DETI Broadband upgrade 18.00
EAFRD via DARD Broadband upgrade 1.50
DARD Rural areas 1.00
BT Matched funding 1.00
ERDF NI Broadband Fund 1.90
DETI Commendium contract for advice 3.90
DETI Avanti satellite broadband 1.25
Total 75.05

Below is what I think is the UK’s broadband budget to 2015. I have assumed that BT’s contribution in Northern Ireland is part of its £2.5bn Next Generation Access budget to 2015, and excluded the £2.5bn it will probably spend on normal network build and maintenance.

If anyone can improve the accuracy of the tables here, please feel free to point out any errors. And if anyone wants the allocations to English counties, please let me know. If anyone has the Scottish and Welsh allocations, I’d be happy to put them up here. As for Northern Ireland, well, that’s pretty much all BT’s, I believe.

Britain’s Broadband Budget
£ £
BT 2,500,000,000
Cornwall 132,000,000
Digital Region 94,000,000
Defra 20,000,000
Rutland 710,000
DCMS England 294,890,000
Scotland 68,000,000
Wales 56,900,000
Northern Ireland 36,000,000
Unallocated 74,210,000
530,000,000
DCMS Post 2015 300,000,000
Total 3,576,710,000

This may include double counting of BT’s £78.5m contribution to Cornwall, which probably comes from its £2.5bn headline Next Generation Access budget.

It also excludes provision for matched funding that DCMS/BDUK expects to elicit from companies that bid for bits of the DCMS’s £530m. How much BT kicks in in matched funds will probably come from its NGA budget, so will not increase the pot at all.

It also excludes projects such as B4RN, which will start seeking investors in November for its proposed community-owned 1Gbps fibre to the home network.

Written by Br0kenTeleph0n3

2011/10/18 at 08:00

Will EC consultations stall UK progress on access to BT poles and ducts?

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Ecta, the European Competitive Telecommunications operators’ association, has welcomed European Commission moves to lower the wholesale price of access to incumbent telcos’ infrastructure, but has warned against overcompensating them with “excess profits” on their fibre networks.

Ecta said, “Network owners in many countries are making excessive profits over their largely depreciated copper infrastructure. This means that consumers are paying very high prices, and investments on fibre networks are just not happening.”

Ecta said it was unnecessary to allow “excessive profit” to compensate for any revenue lost to lower prices for infrastructure access. “All that investors need is a fair return, not excessive profits,” it said.

Being “over-generous” risked pushing fibre prices out of consumers’ reach and would undermine the Digital Agenda targets, it warned.

Digital Agenda champion Neelie Kroes this morning published two consultations designed to create a level playing field across Europe for infrastructure access prices. These could vary from €5.21 a month in Lithuania to €12.41 a month in Ireland for wholesale access to the local loop.

She did not believe that these differences between countries could be explained solely by variations in underlying costs.

The first consultation deals with alternative operators’ open (non-discriminatory) access to the infrastructure and services of dominant telecom operators. The second deals with how national regulators calculate prices that operators have to pay for this wholesale access.

Kroes wants a standard system to operate across Europe.

Telcos could also soon have access to €9bn through the “Connecting Europe Facility” proposal now before the Council of Ministers and European Parliament.

Kroes’s Digital Agenda targets are to have all Europeans with access to 30Mbps broadband by 2015, and to have 50% using 100Mbps services by 2020.

Comment

Kroes appears to have largely accepted Ecta’s argument, presented in June, that incumbent telcos have sweated their copper assets, and only invested in faster fibre networks once cable TV operators and “triple play” services (fixed line voice, TV and broadband) threatened their market share.

However, she has also given ear to incumbents’ pleas for protection of any investment in fibre.

The irony here is that many Ecta members are incumbent operators in their home countries. While they want prise open access to their off-shore competitors’ networks, they are fighting hard to keep competitors out of home markets.

The UK is already halfway down this road. In January, at the regulator Ofcom’s request, BT published terms and conditions (the so-called PIA reference offer) for access to its poles (£21/pole attachment/y), ducts (£0.95/m/y)and other physical infrastructure.

This was heavily hedged, denied use of the facilities to competitors who wanted to use the ducts to sell leased lines, and insisted on reciprocal access to competitors’ networks. In addition, Fujitsu Telecom, with Virgin Media and TalkTalk, claimed BT’s prices were four to five times their actual cost.

The BT offer was rejected by both competitors and business users. Following its inability to attract anyone to test its PIA scheme, BT was expected to deliver a revised reference offer by the end of September.

Ofcom and BT did not respond immediately to queries as to whether the commission’s consultations would affect the PIA reference offer timetable.

Update

Ofcom says it won’t. BT is presumably busy with a power failure at a Birmingham exchange which shut down many subscribers’ broadband for hours and got it trending on Twitter.

Written by Br0kenTeleph0n3

2011/10/03 at 13:25

NGA funding chasm revealed as Kroes meets industry CEOs

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A massive funding gap will make it hard or impossible to meet the European Commission’s Digital Agenda targets by 2020, yesterday’s meeting between Digital Agenda champion Neelie Kroes and communications industry CEOs revealed.

Kroes told the CEOs yesterday she hoped the commission’s proposal for €9.2bn between 2014 and 2020 would unlock over €100bn in private investment.

McKinsey, a consultancy, estimates the cost of achieving the Digital Agenda goals at around €300bn. The European Investment Bank told Br0kenTeleph0n3 it would cost €200bn.

The Digital Agenda targets are basic broadband for all by 2013, universal access to 30Mbps, with 50% using 100Mbps services by 2020. Kroes asked the CEOs in March for proposals on how to fund the investment needed to achieve them.

There was clearly no consensus. Kroes said in a statement, “While it is understandable that commercial players try to maximise their own advantages, we also need to recognise that we have common interests.”

She said there was more mutual understanding about the issues, especially that digital video distribution is likely to be crucial in stimulating demand for high speed broadband.

However, there is growing evidence, such as the rise in uploads to YouTube, that audiences are becoming increasingly prolific producers. This will increase demand for higher upload speeds.

Kroes reiterated the European Commission’s support for a “robust best-efforts internet to which everyone has access”, saying it’s up to industry players to find commercially acceptable contracts, and that regulation will be a last resort.

Kroes said she wanted more time to study the CEOs’ proposals, but added some points were already clear. These were:

  • The maturity of high-speed networks differed across Europe and take-up levels were “disappointing”.
  • Investors were unwilling to commit funds for a massive NGA (next generation access) roll-out.
  • With uncertain short term demand for very fast broadband, a switch-off date for copper was unclear.
  • Consolidation and specialisation of network operators could create the scale and certainty required to attract investors.
  • There should be a single pan-European regulatory regime.
  • More open and interoperable technical standards were needed to improve efficiency and create uniform wholesale network access products.
  • Net neutrality, i.e. a robust best-efforts internet to which everyone has access, should be preserved. “Players at different levels of the internet value chain should be free to reach commercial agreements to innovate and develop new business models,” Kroes said.
  • The commission accepted that internet service providers should self-regulate the transparency of the terms, conditions and performance characteristics of the products they sold.

The CEOs’ proposals were put to Kroes by Ben Verwaayen of Alcatel-Lucent, René Obermann of Deutsche Telekom and Jean-Bernard Lévy of Vivendi.

Rural broadband creeps closer as R&D pays off

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While Europe’s Digital Agenda champion considers the 11 principles needed to unlock investment in fibre networks, there is news about two projects that will reduce the cost of reaching even remote rural broadband subscribers with broadband speeds well above 100Mbps cheaply and quickly.

The European Commission on Wednesday revealed that technology developed in two projects may give every household a connection 10 times faster than the usual ADSL, reaching 1Gbps and 300Mbps in rural and urban scenarios respectively. Moreover, the connection becomes more stable due to a minimized number of data traffic failure points within the fibre.

The technologies developed in the Sardana and Alpha projects are both being incorporated in the new NG-PON2 standard for residential, backhaul, business and SME users, and commercially operational in 2015.

The €4.1m Sardana multiwave fibre to the home technology allows operators to upgrade existing passive fibre links to provide greater speeds and reliability to subscribers. The technology will increase reach above 60km with a greater than 40Gbps aggregate capacity per feeder and low power consumption.

The Alpha project, already tested in France, Sweden and Spain, combines wireless technologies and fibre (single, multimode and plastic) to boost speeds even in remote rural access networks so that each user can get 1Gbps, while providing bandwidth capacity on specific demand.

 

 

 

Written by Br0kenTeleph0n3

2011/07/13 at 18:39

Give us all your money, telcos to tell Kroes

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Incumbent telcos are expected to try to extend their regulatory holiday on installing optical fibre networks when they report back to European Commission VP and Digital Agenda champion Neelie Kroes tomorrow.

Earlier in the year Kroes invited telco CEOs to tell her how to kick-start investment in fibre networks so that all Europeans would have access to 30Mbps broadband with 50% using 100Mbps by 2020.

Tomorrow CEOs from Deutsche Telekom (for telcos), Alcatel Lucent (for equipmentuppliers) and Vivendi (for content providers) are expected to deliver a statement of 11 “principles” that address industry structure, approaches to “net neutrality” and regulation of “next generation” fibre networks.

The amount required is estimated at between €200bn and €300bn over the next 10 years. Given the sovereign debt crisis engulfing southern Europe, it is likely that money from governments is likely to be in short supply.

At the recent Ecta (European Competitive Telecoms Association) conference on triggering fibre investment, representatives from the funding community were plainly willing to lend, even to buy existing copper networks. They preferred to see their risk reduced by having fewer fibre network operators, and when Br0kenTeleph0n3 pushed, they admitted they would prefer to invest in a monopoly network operator.

The conference also showed that incumbent operators do not invest in fibre until forced to do so by competitive offers. At present the competitive threat came almost exclusively from cable network operators with their mix of fibre backbones and co-axial local loops, said Karl-Heinz Neumann, one of the authors on an exhaustive analysis of wholesale access pricing of copper and fibre.

Depending on whether new entrants have access to the incumbent’s passive infrastructure such as ducts and poles (or other utility suppliers such as energy), fibre networks were between 20% and 35% more expensive to install than copper, Neumann told Br0kenTeleph0ne.

However, fibre delivers vastly more raw speed than copper. BT’s Sean Williams told the conference copper will achieve 100Mbps within five years. besides which it was quicker to use copper to deliver incrementally higher speeds.

But a fibre to the home (FTTH) service could start from 100Mbps, speed upgrades are vastly cheaper and quicker to implement than with copper, and general running costs are said to be lower with fibre than with copper.

Ecta, which represents more than 100 “entrant” telcos, has long argued for there to be a single fibre network in each country, or ideally, across Europe, and for each operator to have “open access” to the physical network.

Speaking ahead of the meeting with Kroes, Ecta chairman, Tom Ruhan said, the “de facto” regulatory holiday for fibre networks in many countries had not led incumbents to invest more. “It is time to recognise that in most cases, including in cities, the market can only support one fibre network alongside any cable networks that already exist,” he said.

Ruhan called for an end to the regulatory holidays for fear that Europe would slip behind competitor economies. “Regardless of whether the fibre is owned by one operator or several ‘co-investors’ the network needs to be open and the regulatory rules must be clear,” he said.

Written by Br0kenTeleph0n3

2011/07/12 at 16:16