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UPD Public Accounts Committee Still Critical of BT and BDUK Broadband Rollout

Wednesday, Jan 28th, 2015 (4:20 pm) - Score 1,989

The Public Accounts Committee, which holds some responsibility for examining the Government’s public expenditure, has today hosted a third session in order to examine if any progress has been made on their prior recommendations for the joint state aid supported BT and Broadband Delivery UK rollout of superfast broadband.

Readers might recall that the Committee has already published two somewhat scathing reports into the “rural broadband programme“, as they describe it; one in September 2013 (here) and the second in April 2014 (here). We also strongly recommend that visitors read today’s other summary of the BDUK costs and competition from the National Audit Office (here), which adds some much needed context to all this.

Both of the original reports were critical of how BT had won all of the contracts and warned that BDUK was helping to prop up the incumbent operators “quasi-monopolistic position, which it is exploiting by restricting access to cost and roll-out information.” Certainly the lack of detailed coverage data wasn’t making it easy for some alternative altnet projects to secure state aid approval for their own schemes in the last 5% of the UK (remote rural areas).

But last year’s meeting, in-between moments of political grandstanding, also made a series of three recommendations and warned that a failure to make “significant progress” on them would result a “further hearing to find out why [BDUK] is not improving its approach to protecting public funds“.

PAC Recommendations (April 2014 Report)

Recommendation 1: The Department should work urgently with all local authorities to publish detailed mapping of their implementation plans, enabling searches down to full (7-digit) postcode level. The information should include speed of service, as soon as that is available.

Recommendation 2: The Department should collect, analyse and publish costs data on deployment costs in the current programme, to inform its consideration of bids from suppliers under the next round of funding.

Recommendation 3: Before the next round of funding is released, the Department should work with local authorities to identify opportunities to promote competition and value for money; including considering alternative solutions, joint working and fair capital contributions from suppliers.

Take note that the contracts themselves weren’t solely funded by the public purse and involved a sizeable commercial contribution from BT, which naturally meant some degree of confidentiality agreement in the related contracts.

Meanwhile the issue of coverage data is easily complicated by other factors, not least with the fact that the plan is constantly subject to change. Coverage expectations can shift depending on what problems or opportunities are revealed by Openreach engineers on the ground and the on-going changes in state aid funding allocations. Never the less if all local authorities employed a common sense approach then they’d have been better able to cater for altnets as well as BT, if only.

At the time of the last meeting BT’s Group Strategy Director, Sean Williams, did make clear how “in all cases that we are okay for this [coverage] information, down to seven-digit postcode level, to be published by local bodies if they so choose“. Since then many Local Authorities have improved their maps and coverage data, although quite a few are still coming up sort and only seem able to offer vague coloured maps that aren’t terribly informative or accurate. Detailed cost data is similarly missing.

Elsewhere the BDUK programme has since started the deployment phase of its £10m Innovation Fund, which was setup with 8 pilot projects last year to “test innovative solutions” for delivering superfast broadband (24Mbps+) services to the final 5% of the United Kingdom (full details) and this might help to meet the third recommendation. But has any of this been enough to placate the PAC’s concerns and meet those recommendations? Sort of.

Admittedly it should be said that the PAC can be a very political arena, which often does more to foster the pursuit of advantageous sound bites and pandering to the mass media than constructive criticism. Never the less some of the issues raised are very relevant and it’s important to have such sessions.

Today’s event appeared to be considerably softer on BT, BDUK and the Government than prior meetings and indeed the chair, Margaret Hodge (Labour), opened by saying that there “does seem to have been some progress, which we acknowledge and welcome” (part of this is reflected in today’s NAO report). Never the less there was some strong discussion over a number of points, which we’ve summarised below.

PAC’s Hot Topics (28th Jan 2015)

* Chris Townsend, CEO of BDUK, in responding to a question about the impact of peak-time network congestion on the Universal Service Commitment for speeds of at least 2Mbps (for all) agreed that the designated minimum speed would be available “at any time of day” (we’ll see how that works out). Interestingly Townsend also said the USC would be delivered “by the end of 2015“, although the BDUK website still states “by 2016“.

* Chris Townsend also mentioned Satellite broadband a number of times, pushing it as a partial solution for the final 5% and noting two of the pilots that are offering up to 30Mbps to several hundred premises in Exmoor and Scotland. “We’re very excited about them,” he said. Well at least somebody is.

* Chris Townsend also said that BDUK was “on schedule” to deliver their superfast broadband coverage target of 95% by 2017, thus temporarily putting concerns over a possible slip into 2018 to bed, at least for now (delays always come later).

* Andrew Field, BDUK’s Superfast Broadband Programme Director, was pressed on why upload speeds seemed to be overlooked in the contract, which is an especially big concern for businesses. In response he said, “We haven’t got a definition for upload speed .. but demand is more for download“. BDUK was then asked if it could look more deeply at this side of things and there appeared to be some agreement.

* Margaret Hodge and other members of the committee questioned if “there is still cherry picking going on?” (i.e. picking the easier low hanging fruit, while leaving the most rural areas out). BDUK and BT denied this, although admittedly the focus so far has been on the easier areas. The on-going negotiations for the Phase 2 and future Phase 3 contracts will result in a much stricter rural focus (many BDUK projects are already running out of easy areas). But, until a clear plan is set for 100% coverage, then this is likely to remain a suspicion.

* Margaret Hodge also suggested, pointing to some of the recent FSB studies, that BT were “deliberately” leaving business areas out of the roll-out in order to protect their lucrative leased lines. Hodge also took aim at BDUK, whom she accused of “not being vigilant enough … nothing much has changed in this area“. In response BDUK said they were “aligned with BT in trying to [reach] as many small businesses as possible“, although Hodge didn’t believe that and suggested that BDUK should do more to monitor business coverage and take-up, which they agreed to do.

* Margaret Hodge also spent some time going over the issue of costs and transparency. “You’ll never satisfy us that you’ve [BDUK] got value for money .. unless we can see the [information],” said Hodge. In reply Sue Owen, DCMS Permanent Secretary, said, “It was probably never possible for us on our own to change that [secure absolute transparency]” and BT’s Sean Williams, Director of Strategy and Policy, noted that the reason this is a problem is because it would “reveal the entire cost structure” of BT outside of just the BDUK work (i.e. commercial confidentiality).

In reply Margaret Hodge said, “The problem [with lack of transparency] is, we don’t know whether you’re telling the truth or not … we haven’t a clue here and we will keep coming back to this [to find if it’s value for money].” Sean Williams then suggested that they do provide enough cost data, across all of the projects, to BDUK and Local Authorities, which is a position that BDUK suggested they support.

In the end this PAC session was positively tame compared to the first one, with only the issue of cost transparency and business coverage resulting in a sense of anger and frustration from leading members of the committee. Margaret Hodge then closed the meeting by saying, “You still have to convince us that there’s value for money“.

It’s interesting to note that BT’s Sean Williams, flanked by a small squad of senior BDUK, Openreach and DCMS figures, didn’t end up having to answer many questions directly and handed others off to his associates. Indeed most of the committees energy ended up being focused upon BDUK and DCMS.

Meanwhile Hodge has suggested that, depending upon the forthcoming General Election result, she would like to return to the issues that have been raised at a future date. We hope they do, not least because the issue of poor quality coverage data and maps (this is an issue with some, but not all, local authorities) appeared to only be touched upon very briefly.

UPDATE 5th Feb 2015

The full written summary from this PAC meeting is now online (here).

Mark-Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on X (Twitter), Mastodon, Facebook and .
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