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UPD Controversy as UK Councils Decide Superfast Broadband Contract Winners

Monday, September 10th, 2012 (2:59 pm) - Score 813

Several local authorities are this week expected to pick the winner(s) of their respective Local Broadband Plan (LBP) tenders, which will give them access to a slice of the £1bn+ Broadband Delivery UK (BDUK) budget and bring faster internet access to more homes and businesses. But the outcome might also inflame Europe’s competition concerns.

Both Cumbria and Norfolk, to name just two out of a slightly larger group, will this week hold private meetings in order to decide whether BT or Fujitsu deserve their public subsidy support to help 90% of people in each local authority area gain access to a superfast broadband (25Mbps+) service by the end of March 2015 (note: a firm post-2015 to 2020 plan has yet to be announced).

Sadly the public isn’t expected to learn the official outcome of these secret debates until at least the end of next week (assuming no media leaks.. hah), although many are already predicting that the result will be similar to other recent contract awards in North Yorkshire, Lancashire, Wales and Scottish Highlands and Islands where BT won.

In the case of North Yorkshire and Wales, BT simply had no competition after Fujitsu “voluntarily” withdrew over high “risk levels” and broader economic concerns (outside of a small trial Fujitsu’s FTTH project is expensive, somewhat unproven and thus perhaps carries a greater risk for councils than picking BT). A similar situation has already hit Cumbria (here), which yet again leaves BT as the only option.

Critics, such as Cumbria’s South Lakes MP, Tim Farron (LibDem), have also warned that a BT win would result in the operator using “some of the money that they will receive to do things that they would do anyway” (i.e. bring faster speeds to areas that already have good connectivity). BT understandably denies this and states that the money will only go towards areas where private sector investment alone cannot reach (this is a requirement of BDUK funding).

Sadly the heavy restrictions imposed by BDUK’s framework prevent smaller local ISPs (altnets) from taking part, while the Independent Networks Cooperative Association’s (INCA) effort to make the process more accessible might simply come too late to help existing tenders (assuming it arrives at all); in any case most councils only seem to have eyes for a one-operator-only solution.

Meanwhile the European Commission (EC) is continuing to block the release of state aid funding by the UK government until its competition concerns with the BDUK process have been adequately addressed (i.e. lack of competing operators, no Dark Fibre access, sub-30Mbps speed targets etc.). A decision is expected this autumn and most of the affected local projects will be unable to start building until this is resolved.

It’s important to remember that the majority of local BDUK based projects, except for a small proportion (e.g. Birmingham city has already won EU approval), face similar hurdles to the above. Ultimately the UK government expects the procurement process for all counties to be completed by July 2013, though few would be surprised if BT won the lion’s share of funding for its predominantly FTTC based solution.

None of this is to say that a BT win would be a bad thing, indeed their FTTC, FTTP and forthcoming FTTP-On-Demand services are a lot stronger than some give credit and would surely go a long way to improving the connections for millions of UK homes and businesses. At the same time it’s difficult to appreciate what alternatives might have existed if smaller ISPs were never given a fair chance in the first place.

UPDATE

Sorry we forgot to mention that Norfolk County Council (NCC) has delayed its decision until 17th September 2012. This is due to the “sudden and tragic loss of a key member of a team preparing to submit a bid to partner the County Council in the Better Broadband for Norfolk project

UPDATE 14th September 2012

It was noted earlier this week in the FT that Fujitsu had allegedly been blacklisted by the UK government for being too “high risk” to take on new public sector contracts (here). However that doesn’t mean that they’ve been totally banned and indeed we’ve not been able to find any confirmation of a ban. Fujitsu has said that it is continuing to engage with BDUK as normal, which doesn’t mean much since they’ve yet to win ANYTHING.

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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 Twitter, , Facebook and Linkedin.
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27 Responses
  1. Chris Conder says:

    You’re right, we’ll never know, because it will all go to cabinets and the whole job will be to do again once everyone realises millions still have poor access. We can never be a real digital nation until connectivity is ubiquitous, and mobile and satellite can never deliver what is going to be needed on their own.

    The future is coming to those nations who lay fibre, but not to those who think it can be served by a copper phone network.

    Cabinets are fine if that is what BT want to do, using their own profits, as long as no public money is used for them. Public money should only go into futureproof solutions.

    1. FibreFred says:

      What is your problem with cabinets chris? A cabinet is just a distribution point, a box. Up to you what you do with it. Just like a digital pump

    2. Somerset says:

      And with the cabinets comes FIBRE on demand. Sorted.

    3. DTMark says:

      The problem with cabinets… well, unlike Virgin Cable, which was/is a faintly “planned” network taking into account the limitations of copper (co-ax, yes, more capable than knackered old phone lines, but still copper) the cabinets are located for phone services, not broadband. FTTC is not a “planned broadband network”.

      The second problem is that they service only one provider leaving the customer zero choice.

      The third problem is the age of the old phone network. To try to imagine that it is up to delivering superfast (30Meg+) broadband for the majority is pie in the sky.

    4. DTMark says:

      @Somerset: but we have Fibre on demand now. The aims of the BDUK project were, among others, to tackle the “final third” and to provide superfast broadband for 90% of the premises. Cabinets will not achieve anywhere near that. So, why spend the (my, your) money on that solution, when it is demonstrably incapable of achieving the goals?

    5. Somerset says:

      Where do I order a TalkTalk FOD product and what % will FTTC cover?

  2. Somerset says:

    So what’s the answer to funding a 100% FTTP rollout, how much is needed?

    And it’s not a phone network, nice soundbite (again).

    1. DTMark says:

      What is it, if if is not a phone network? Remind yourself of the service obligation: dial up internet @ 28.8kbps. Which is the most it was capable of in Welwyn Garden City @ 3km from the exchange, no broadband possible – phone line, not broadband line. Urban area. Part of the “final third”.

      There is no need for a 100% FTTP network to attain superfast broadband for 90%+, that is a “straw man” argument.

    2. Somerset says:

      A phone network has exchanges handling voice calls and interconnections between the exchanges for those calls. Broadband and data networks are different although merging.

  3. bob says:

    Sadly we are moving back to a situation where we will have an almost total BT momopoly with HS broadband ouside of cabled areas. THis is not a ggod situation to be in. It will stifle inovation and progress as BT will focus on milking it’s legacy copper network rather than focus on developing a network for the future

    1. Somerset says:

      What does a network for the future look like?

    2. FibreFred says:

      Its true Bob, Fuji could have been direct competition but turned out to be a lame duck as expected.

    3. DTMark says:

      Near monopoly? Total monopoly, more like. What’s the point in paying a fortune to, say, AAISP for a connection when you can get the same speeds from Plusnet where the single infra provider’s cabinet is congested? The bottleneck is in one place, with one company who is only obliged to supply 12Mbps or 5Mbps depending on how poor the phone line is.

      We’ll never know just how much Sky, Talk Talk et al would have been prepared to invest had the BDUK project been executed with just a little thought and care facilitating the laying of fibre.

    4. Somerset says:

      Cabinets can have additional fibres installed if there is congestion.

    5. FibreFred says:

      Appreciate your point DTMark but if the fibre uplink of the cab is a concern an ISP can use PIA to put in their own dedicated fibre

    6. New_Londoner says:

      @DTMark
      Quote “We’ll never know just how much Sky, Talk Talk et al would have been prepared to invest…”

      Well the experience from ADSL suggests that neither would be investing in network deployment, preferring instead to buy capacity to connect to their LLU kit. IIRC neither chose to involve themselves in the BDUK bid process, so their actions suggest neither is interested in deploying a complete network.

    7. Deduction says:

      “Cabinets can have additional fibres installed if there is congestion.”

      Errr NO FTTC and FTTP ondemand which uses the cabinet are GPON systems (Gigabit Passive Optical Network) they also use a DSLAM (digital subscriber line access multiplexer) once one or the other is at capacity you have to have either a new cabinet if the multiplexer is full or new optical splitters if they can not handle the demand. You could run a billion bits of fibre to the cabinet, the speed limit and capacity is dictated by the gear in the cabinet, and filters off it. For someone that pesters people with questions and likes to insist they are wrong you know very little.

    8. Somerset says:

      I heard that addition capacity from the exchange could be installed, if not what is the capacity of a FTTC cabinet?

    9. Deduction says:

      The capacity (in terms of amount of users) is dictated by the DSLAM. There are just from what i know 2 different sized cabinets. Amount of customers each type is capable of doesnt mater. If for an example a DSLAM in the cabinet takes upto 600 users, thats its capacity, you can lay as much fibre cable to it as you wish, it still wont take more than 600 users. What speed each of those users can get is then down to how the capacity is split between them. The service is also GPON based so you would have to replace or add another OLT at and first aggregation node which is connected to each OCR and fibre from it. Depending on how many more users you then want to serve you would also have to add or replace primary splitter nodes after the cabinet. I trust that answers why you cant just shove another bit of fibre down the hole to boost the capacity. (Then again, probably not as being a questioning troll you can never admit you are wrong).

  4. dragoneast says:

    The problem with a network for the future – whatever it is – is that no-one wants to pay for it now. So we can’t have it (except in those few instances where enough people locally are prepared to pay in money, time or both). So making the best of what we’ve got seems to me (and a lot of other people who are not on forums, I suspect too) to be a pretty good second best and enough for us, especially with the incremental investment on offer. So I lack vision – yeah, but dreaming never put bread on anyone’s table.

    In the real world many people can’t afford the best of everything. Even abroad.

  5. bob says:

    In the real world companies have to invest for the future or they get left behind and go out of business. In the case of Telecoms though outside of the Cabled areas BT have pretty much a total monopoly in the residential market so have no need to invest as no one can take their business from them. Yes there are ISP’s but with HS Broadband all they are doing is repackaging and reselling the BT product.

    1. FibreFred says:

      So what about their 2.5 billion investment and the biggest change in the network for many years, its not that investment?

    2. Somerset says:

      ‘reselling BT product’? And how many exchanges have Sky and TalkTalk unbundled?

    3. Deduction says:

      How much do BT charge Sky and Talk Talk to put that gear in their monopoly exchanges?

    4. Gadget says:

      Same as they charge themselves

    5. Deduction says:

      So BT still make money from Sky and Talk Talk, even when they use their own equipment? Explain again how that is not a monopoly?

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