The joy of a blog as opposed to our main news feed is that I can ramble on a little bit more, and the subject for this blog post is the current BDUK situation and in particular the meeting our esteemed Culture Secretary is set to have with some smaller Alt-Net providers and BT to try and resolve coverage overlap issues.
Procurement is not a modern evil, but we know a lot more about the process as the Internet makes information sharing so much easier. For those who firmly sit in the ‘BDUK is evil’ camp, consider this – how much complaining is the political opposition making about the BDUK process? Very little that we see, probably because the BDUK was created while Labour was still in power (http://www.thinkbroadband.com/news/4175-usc-gets-broadband-delivery-uk-to-make-it-reality.html). Looking back at that article from March 2010, it is interesting to see that the 90% for 2017 target is so very similar to the current 95% for 2017 target. The 2012 USC has been and gone, but I am not sure that anyone believed anything other than satellite vouchers would have succeeded in the time frame that had.
Most of the current complaints about the BDUK/BT process revolve around:
- BT being sole bidder
- Delays to the programme
- Overlap with alt-net projects
- Are projects value for money?
- Transparency of costs
- Perception that BT is scamming us
On value for money, some are spending a lot of time and blood pressure on getting to the bottom of the pricing, but until either BT releases every invoice (which of course someone will need to double check) will we stand a chance of figuring if there is any over charging. As I see it, we can arrive at ballpark ideas of the cost for what BT is providing, but down at the individual cabinet level there are so many variables that modelling is prone to big mistakes in the figures. The NAO report was a chance to help, but while being critical this was still a fudge that did not consider areas like cost of power (I don’t recall any study for power to other street furniture to see if the claims by BT of the wide variations in cost are sensible). Here in lies the problem, only 60,000 properties have access to NGA via a BDUK project so far, 4.4 million to go roughly, so any value for money assessment is a paper exercise.
The situation of BT using its muscle to move into areas and squeeze out at alt-net is an age old one, with this being a common moan when the original ADSL roll-out accelerated killing off many fledgling Wi-Fi provider, those that survive are offering fixed wireless to wide areas and it seems able to provide symmetric speeds in the order of 22 Mbps. The 2013 version is revolving currently around Lancashire and the race to provide FTTP to the small village of Dolphinhome (at a quick guess from map around 150-200 homes) and the news that BT is planning GPON FTTP to the village, against B4rn that has been digging to the area for some time.
Now in theory as part of the Lancashire Open Market Review BT will have declared where it is going commercially, but while this helps define the black/white and grey areas it appears B4rn was not considered in this. So the BDUK project which is aiming for 97% FTTC (including a little FTTP) is very likely to target clusters in villages, as opposed to the middle of nowhere isolated farms and homes B4rn specialise in.
The people running B4rn are a great bunch and have worked very hard, but if one was to look on the project dispassionately I would say that the balance of PR and actual connections is wrong. 2012 was not a kind year for rolling out a virgin fibre network, but a year on in March 2013 they were stilling looking for 300 subscribers to make the model self sustaining.
So the question really is whether B4rn can cope with overlap in Dolphinhome. In terms of connection speeds B4rn would seem to be winning, but with BT having the marketing clout backed up by Sky and TalkTalk it will be a tough game. At the end of the day, just maybe accepting half the connections in the area and being able to say they went head to head with BT might be a good thing and create the first UK village with true FTTP infrastructure competition.
Obviously in terms of spending state-aid money, there are massive question marks, but there are provisions for small overlaps and in the scheme of things 100-200 homes if the EU look at the overall Lancashire picture will appear to be small. Perhaps that is what the evil BT is gambling on – the question is who in Lancashire County Council pointed BT towards Dolphinehome as a good spot for a little FTTP? Or just maybe the demand survey had a good response from Dolphinehome?
BT is far from perfect, they are bad at releasing information on cabinet level roll-out both commercial and as part of the BDUK projects. They also have some parts of the firm promising the earth or exploiting people’s misunderstanding of technology. The Fibre on Demand product is sliding into obscurity and upstream options on the GEA-FTTP products are severely limited still, lets hope a 50 or 60 Mbps upload option surfaces in 2014.
At the end of the day, the impression I get from the general public as opposed to broadband commentators is people care little about who provides the service, so long as they can keep their email, the price is reasonable and it is arriving in their area tomorrow and Lovefilm (other streaming providers are available) streaming works
If in the UK we had wanted to run a nice clean procurement process we would have waited until Spring 2014 to start the process, as the Openreach commercial deployment would have finished, and it would have been clear as to the full extent of that network. This would have given the fledgling fibre alt-net firms who largely wasted time between 2003 and 2009 to gain their foothold also. The downside is that the contract signing would not be until late 2015, with delivery another few years after that. The way we have now is mixing and matching commercial versus funded roll-outs such that it could be said that market failure has not been demonstrated, beyond a few words made by BT and Virgin Media to some Members of Parliament.
The latest funding stunt by the Government where £250m (not the original £300m) of TV licence money has been announced as if it was from their own pockets to raise NGA coverage to 95% at some point in 2017 is only confusing things further and for alt-nets it is politicians saying we value shares and dividends a lot more than your hard work. No surprise there.
One final thought to end this long blog on, the meeting with Maria Miller will offer some olive branches, but there will be little substance. Even if it delivers everything what some hope for, it is bringing the alt-net operators closer into the mechanism and reducing some of their agile abilities and maybe set them up as being one of the half dozen projects used to show that BT is not an evil monster in the future.