Posts Tagged ‘Telecommunications’
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.
I am pushing way beyond my graphene-thick understanding of microprocessor and internet addressing technologies, but I am intrigued by stuff I have heard recently, and hope that someone out there can shed more light on the subject.
Current chip technology mostly works in 64-bit ‘words’. In other words a chip can process a single 64-bit word, or two 32-bit words every cycle. That’s handy, because a 64-bit processor can deal with two internet addresses that conform to the 32-bit IPv4 internet addressing scheme at the same time, speeding up data flows around the internet .
Unfortunately, the world has pretty much run out of 32-bit addresses, just as the BYOD and M2M initiatives are adding billions of devices to the internet, all competing with me for the network’s attention We are having to move to IPv6, which uses a 128-bit address scheme. That means it will take most chips two cycles to deal with an IP address, effectively quadrupling the time required to send a packet on its way. (Or you could split the address in two, run them in parallel through two 64-bit cores, and hope that what emerges still makes sense.)
Actually, because IPv4 and IPv6 will co-exist for a long time to come, probably it will take even more cycles to resolve an IP address because the processor must translate addresses between the two incompatible schemes.
In addition, router tables, the automated IP address databases, suddenly become much bigger. From looking for a needle in a haystack for an IPv4 address, digital postmen are now looking for the equivalent of Higgs’ boson.
According to telecoms consultant Martin Geddes, the internet is likely to become less reliable, not more, as packets start to queue, waiting for microprocessors to figure out the next leg of their journey across cyberspace.
“IPv6 is a waste of time and money,” he says in a newletter, Nuclear networking (subscription needed). “It is the wrong answer to the wrong question. It fails to tackle the fundamental problems of Internet Protocol: addressing the wrong thing (interfaces, not applications); tightly coupling the whole system; confusing naming and addressing; perpetuating hacks like DNS and Mobile IP to paper over the gaps; and a host of other sins condemning us to networking purgatory. Indeed, IPv6 will create a whole new slew of performance, security and implementation problems we have yet to fully experience.”
Geddes advocates we re-engineer the internet using RINA – Recursive InterNetwork Architecture. But he also says a commercially viable use of RINA is 10 years away. Now is a good time to start planning the transition, or at least how to splint the fundamentally broken internet with something more robust.
Of course, the for-now answer is to build 128-bit processors specially to cope with IPv6 addressing. Chips with 128-bit floating point registers have been around for quite a while, mainly for high performance computing like counting molecules or decrypting Skype calls in real time, apps that need a high degree of accuracy.
But resolving internet addresses has, until now, not really been an issue. It’s going to be, so how are we going to do it?
Over to you.
Ever since the government’s digital engagement czarina Martha Lane Fox told Twitter that she’d dropped her mobile phone into the lavatory, it’s been clear that some Britons are addicted to their communicators.
Communications regulator confirmed this on 4 August in its 2011 Communications Market report. It found almost four out of 10 adults and six out of 10 teenagers admitted they were “highly addicted”.
The study shows a massive shift from fixed line communications to mobile, as well as huge growth in mobile data traffic. The number of mobile voice minutes has grown by 250% over the past decade from 35 billion to 125 billion a year, and text messages have increased from 7 billion to 129 billion per year. Mobile data traffic has skyrocketed 40-fold since 2007, Ofcom said.
Despite BT saying it added some 87,000 new copper lines over the past two or three quarters, Ofcom found that the percentage of UK homes with fixed lines dropped from 93% in 2000 to 81% today, and one in seven homes were “mobile-only”.
Overall revenue from telecommunications was down 2%, Ofcom said. Mobile revenues were up 1%, but fixed voice and broadband revenues dropped 3% and 6% respectively, largely due to competition and regulatory action. However, 26% of advertising spend is on the internet, marginally ahead of television. Internet advertising spend grew by 16% in 2010 to over £4bn, and mobile advertising increased by 121% in 2010 to reach £83m.
A striking feature of the market has been the switch to smartphones, with its implications for a big shift in traffic patterns and hence network build. Almost six in 10 people who have a smartphone acquired it with the past year. As a result, 27% of adults and 47% of teenagers now use a smartphone, Ofcom found.
Smartphone users make a lot more calls and send more texts than regular mobile users. Ofcom said 81% of smartphone users make calls every day compared with 53% of “regular” users). “Teenagers especially are ditching more traditional activities in favour of their smartphone, with 23% claiming to watch less TV and 15% admitting they read fewer books,” Ofcom said.
Usage figures reveal the development of an “always-on” culture. Eight out of 10 smartphone users have their mobiles switched on all the time, even in bed. Over half (51%) of adults and two-thirds (65%) of teenagers admit using their smartphone while socialising with others, nearly a quarter (23%) of adults and a third (34%) of teenagers have used them during mealtimes, and over a fifth (22%) of adults and nearly half (47%) of teenagers admitted using or answering their smartphones in the bathroom or lavatory.
This extends to fixed networks too. Just over three-quarters of homes are now connected to the internet compared to one-quarter in 2000. Total UK broadband take-up increased by three percentage points to 74% by 1Q2011. The largest increase in adoption was from those using fixed services, mainly among older age groups, Ofcom said.
By May 2011, around 500,000 households had adopted superfast (greater than 30Mbps) broadband, a fivefold increase from 2010. Nearly six out of 10 homes were “passed” by either Virgin Media’s cable service or BT’s fibre to the cabinet Infinity product.
People were happier with their high speed service that their previous broadband by eight to six, with most high speed users saying they were more likely to use it to download high definition video.
This evening an Essex village hall will host a meeting at which more than 140 people who represent around 80 parishes will discuss how to improve the broadband service their parishes receive.
These are almost all people who have been promised broadband, paid their money, and been, at best, short-changed.
They are mostly angry and frustrated.
They are not alone.
It shouldn’t be this hard. There’s a market out there that wants broadband. There are suppliers kitted up and fitted out to deliver it. Why can’t they get it together?
There is plenty of evidence that there many communities both rural and urban that now do not get a decent broadband service (i.e above 2Mbps reliably. See the map of Cumbria, for example) are willing to pay to get it.
However, the suppliers, at least the ones that are qualified to pitch for government money through local authorities’ procurement procedures, would rather talk to county councillors rather than to customers.
As a result, as Br0kenTeleph0n3 reported previously, some frustrated communities are getting ready to just do it themselves.
This is risky. There are unconfirmed reports that South Yorkshire’s Digital Region Ltd is on the brink of collapse. DRL rents its network from BT, and recently won a regulatory review of BT’s pricing of local loop unbundling products.
DRL says it was “surprised” to be contacted about the state of its financial health. “Our deployment of super fast broadband across the South Yorkshire Region is currently ahead of schedule and Phase 1 (80% coverage) will be completed by December 2011 in line with the project plan,” it said.
DRL wanted BT’s price cut to around £50 per line. In a letter sent to BDUK in April, Fujitsu Telecommunications and internet service providers claimed BT’s prices were four to five times its actual cost. As a result of DRL’s complaint, communications regulator Ofcom may drop BT’s “metal path facility” (i.e. a copper pair) price 10% from the present £91.50.
In addition, while BT has announced that it will enable some exchanges with high speed fibre, it has not said which street cabinets it will upgrade to “superfast” broadband. It has said previously as few as 70% of subscribers served by a steet cabinet may get the higher speeds of “up to 40Mbps”.
Nor has it said definitively where it will not upgrade its network. It has said it will provide a “superfast” broadband service to 90% of the country if it gets most of BDUK’s £530m budget, but it either cannot or will not say where the 10% live who will not get the upgraded service.
This creates fear, uncertainty and doubt among potential broadband investors and subscribers. Few investors wish to risk creating demand, put in a network, and having BT come in and underprice them, which it can easily do, thanks to the scale at which it operates and because it is probably the incumbent supplier.
In addition BT is usually the only source of backhaul, the link from the street cabinet to the national carrier networks. Potential not spot network operators are reluctant to discuss their plans with Openreach, BT’s physical network provider, for fear that other BT divisions may get wind of them, and scupper them.
There is little doubt that this uncertainty has slowed investment in networks in general and in rural networks in particular. There are stories that lack of broadband is helping to depress house prices, and many rural communities have blamed lack of high speed broadband for holding back economic growth and for depopulation of the countryside.
Ofcom is formally required to ensure that potential investors have more certainty about the investment climate. Its success on this score is evident from the number of investors and network operators providing broadband services to subscribers.
Tonight’s meeting will give further insight into whether the pent-up frustration with the slow or non-delivery of high speed broadband can spark innovative ways around the present obstructions.
Broadband Delivery UK, the government agency set up to deliver high speed broadband to the country’s broadband “not-spots” is to review proposals for very high speed broadband in cities.
This was revealed in a job advertisement for an accountant. It said, “BDUK is also taking forward other ministerial priorities such as proposals for very high speed broadband in cities.”
The department of culture media and sport, to which BDUK reports, did not respond immediately to a request for comment.
Until now the government has said the BDUK’s £530m budget is to ensure that so-called “final third” of homes and businesses currently without a decent broadband service will get one. It has said it will rely on the market to deliver high speed (above 24Mbps) connections largely in towns and cities.
It is therefore not clear why BDUK should be involved in urban networks.
Virgin Media is already testing a 1.5Gbps network at London’s Tech Hub in Old Street, and BT has said it will have spent £2.5bn on fibre to the cabinet (FTTC), with a little fibre to the premises (FTTP), by 2015. It has started rolling out some 100Mbps FTTP projects in high density locations.
Br0kenTeleph0n3 asked the DCMS press office the following questions about BDUK’s apparently extended mission:
What proposals for very high speed broadband networks in cities is BDUK looking at?
Who has submitted them?
What time period do they cover?
How much taxpayers’ money could be involved over and above the £530/£830m already earmarked for not spots?
BDUK was set up to address the problems of broadband not spots. This looks like mission creep. Is it?
This is its reply in full:
“Broadband Delivery UK – a team within DCMS – was set up to deliver the Government’s broadband strategy, bringing superfast broadband to all parts of the UK.
“The Government wants the UK to have the best superfast broadband network in Europe by 2015.
“Our priority is to ensure the whole country can join the digital age by helping take superfast broadband to areas the market will not serve on its own.
“We have set out plans to provide 90 per cent of homes and businesses in each local authority area with superfast broadband access and everyone with access to at least 2Mbps.
“We are also exploring other ways to ensure Europe’s best superfast broadband network is in the UK.”
It’s nice work if you can get it. BDUK, the government agency charged with delivering the best national broadband network in Europe by 2015, is looking for a Mr (or Mrs) Moneybags.
The person, who will be paid between £45,380 and £54,595, will manage BDUK’s £530m budget to help local authorities and enterprise partnerships roll out high speed broadband in those parts of their counties, towns, villages and parishes that other networks won’t reach.
They will also manage the £16.5m, five year budget for BDUK’s staff of 25 to 30 civil servants, consultants and advisers, the job ad says.
Assuming BDUK maxes the headcount, that averages £110,000 per year each. Presumably the difference between salary paid and budgeted reflects a nice office, desk and chair for our keeper of the BDUK purse-strings.
The way chancellor George Osborne and culture secretary Jeremy Hunt have been throwing money at Wales and some of the counties, around £110m by now, and with the procurement framework pretty much in place, it seems that the heavy lifting is largely done.
But someone still has to keep an eye on the recipients of the taxpayers’ largesse. “BDUK will need to ensure that the money is granted on a sound basis, and that spend is properly managed and reported back by LAs,” it says.
Anyone fancy the job, get a wriggle on. Applications close at 5pm on 28 July.
And if you want to know more, Andrew Field is your man, tel 020 7215 0152 or Andrew.email@example.com
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.