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 ( 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.

7 Responses

  1. PhilT on 15 Jul 2013

    Value for money, BT as the sole winner and the like is crying over spilled milk. Cheaper operators with the relevant capability failed to materialise or survive the evaluations by Council officials with BDUK support and frameworks. So surely it’s time to move on from there.

    We could have another enquiry as part of our enquiry-led recovery (or is that “inquiry”) but it can only guide future projects and let’s face it what public sector project leaves all stakeholders, campaigners and observers happy ?

  2. milesm on 15 Jul 2013

    A not unreasonable, albeit pragmatic, view.

    Any thoughts on RCBF which seems to have failed to deliver anything much so far?

    • andrew on 15 Jul 2013

      Dare one suggest that RCBF is an attempt to placate the vocal few who felt the small projects were ignored.

      The moving goalposts making it difficult to know which areas will be covered by main project for superfast, and also the additional paperwork mountain.

      £20m RCBF was only every going to be a token spend.

  3. milesm on 15 Jul 2013

    Quite possibly – and none of it spent yet.

    • Selina Howells on 16 Jul 2013

      Some of it has been spent. Rothbury, Northumberland was awarded funding from the RCBF. A councillor made fibre broadband a very high priority. When the funding was announced Danny Alexander visited and was photographed at a local business. It was claimed the investment in broadband would invigorate the entire local economy. However, even though this region will benefit from an invigorated economy, the councillor is making a further bid to RCBF with advice from a paid consultancy to connect more villages with more public money. The first grant we have been told will invigorate the local economy therefore this enlarged local economy should fund any further investment. It is not for the taxpayer to find more money for this councillor’s patch.

  4. Thanks for that Andrew. However, I believe you gloss over some important points. At LCC’s request B4RN withdrew a complaint about BT overbuilding its coverage area in return for LCC excluding B4RN’s footprint from a BDUK-funded roll-out. LCC “betrayed” this agreement (Philip Virgo’s word).
    It may have been a gentlemen’s agreement (neither B4RN nor LCC has shown me the written agreement), but if one of the parties reneges, can one consider him still a gentleman? Perhaps these days trust and reputation don’t matter. If that’s the case, life is going to get a lot more expensive and litigious, and you can forget about “up to” as an acceptable service level agreement.
    As I’ve reported, LCC and BT have a joint venture on public service networking and services such as pensions. It is now stripping the assets build up in the CLEO network and reallocating them. LCC chucked these taxpayer-funded assets into its negotiations with BT in return for more coverage, so we can’t fault BT. But we can ask LCC what it is getting in return. We can also ask Lancastrians and LCC workers how they feel about what’s happening with the CLEO assets. After all, there is a difference between what’s right and what’s legal, but you may choose to believe that might is right.
    Just a quick response to @PhilT: most of the BDUK money is allocated but not spent. Therefore it is not “crying over split milk” to scrutinise every single invoice that BT sends in and to require accompanying suppliers’ invoices to BT. Mike Kiely’s work on comparative costs of BT’s NGA roll-out is eye-opening and instructive in this matter.
    BT has never published a rebuttal to Kiely’s figures; indeed, the NAO complained that BT’s cost figures did not pass basic transparency rules. If this was the track record of any other supplier of any other service, would you still trust them not to screw you over if they could?

    • PhilT on 16 Jul 2013

      If contracts are signed and in place it is crying over spilt milk. I realise some people are devoted to attacking BT in anything they do, and perhaps even making a living out of it, but any attempt to fiddle with a BDUK project will just end up with a renegotiation and it’s clear to me who will come out better from that.

      Unless the BDUK contracts are on some form of open book or payment against invoices basis, which I think unlikely, then there is no right or obligation around disclosing invoices and payslips. Real world commerce simply doesn’t work like that, my input costs are my concern and you pay the price to me that we agreed.

      Kiely’s reliance an arbitrary massive discounts to say BT’s FTCC is overpriced doesn’t impress intellectually and seems incompatible with the work of others like Atkins’ “should cost” analysis for Northants CC which came out slightly higher than the BT bid. Does Kiely’s work even merit a rebuttal, or does that give it undeserved credibility ?

      Fact of the matter is that all these supposed better alternatives, lower cost suppliers and clever people were found wanting in a real world procurement exercise and failed. We shouldn’t be too distracted by their sour grapes or conspiracy theories let’s just get on an deliver as much as we can using the methods that have after all got us virtually all our current broadband connectivity, bar a few curiosities.

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