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Someset and Devon UK Councils Angry at BT’s Fibre Broadband Rollout

Tuesday, October 21st, 2014 (12:13 pm) - Score 890

Plans to extend the joint £94 million Connecting Devon and Somerset (England) project have been cast into doubt again after several district councils expressed concern at BT’s requirement that they sign “gagging orders” (Non-Disclosure Agreements) and the operators alleged inability to guarantee that residents in their area would receive access to faster broadband speeds.

At present the joint plan aims to make BT’s “fibre broadband” (FTTC/P) services available to more than 90% of local premises by the end of 2016, although the area has also been allocated an additional £22.75m from the Government’s Broadband Delivery UK (BDUK) programme in order to help achieve the national target for 95% coverage of “superfast broadband“(24Mbps+) by 2017; there’s also a local ambition to reach 100% by 2020.

Crucially the local authorities must match the BDUK investment with money from their own coffers, which has been a struggle and meant that the first proposal under the related Superfast Extension Programme (SEP) would fall several million short (here). Never the less the agreed value is still expected to be enough for the 95% target, assuming everybody can agree to sign the contract with BT.

Unfortunately this may be easier said than done after several local councils expressed concern at the need to coat the project in secrecy by signing a Non-Disclosure Agreement with BT (this is a common if much criticised part of most BDUK projects), which some officials described as forming part of the operators “aggressively commercial” approach towards retaining their “highly profitable” position.

Tim Wood, Chairman of the Task and Finish Forum, said (Western Morning News):

Indeed the lack of information has made it more difficult for rural residents to seek possibly viable alternative solutions to their internet problems.

There was negligible willingness for those who knew more information to reveal it and there was an air of frustration and anger on the part of those who felt their residents were being kept in the dark despite huge quantities of taxpayers’ money being spent on the project.”

The BDUK supported approach is partly commercial, relying on BT to invest some of its own money, and so from a business perspective the telecoms operator has felt a need to protect its investment and any information that it might deem commercially sensitive.

In the past this has created problems with both the transparency of costs and access to detailed coverage data, which have sometimes also made it difficult for alternative network operators to seek funding. State aid rules prevent NGA networks from overlapping too aggressively, but first you have to know where the network will go before you can answer any questions about an overlap (difficult when one side isn’t as forthcoming).

In fairness BT would no doubt point out that deploying FTTC/P is a complicated process and they often can’t say for sure precisely what coverage will be achieved until after the surveys have completed, and even then the coverage plans can change depending upon unforeseen circumstances on the ground. This is especially true when you have a target of 95%, which still leaves 5% stuck in the slow lane.

Regardless of the concerns the CDS project has already secured £19.1 million of their £22.75 million target and the contract is now out to tender, with BT of course being the obvious or rather only choice given that there aren’t any other bidders involved at the same scale.

The newspapers article also makes mention of BT’s £500,000 quote for bringing “fibre broadband” to the village of Upottery, which we covered earlier this year (here).

Leave a Comment
33 Responses
  1. Avatar NGA for all says:

    Who is verifying BTs investment? What if that investment is only in the form of excessive capitalised labour charges, which happens to be the highest in Europe? Is there anything you cannot hide under a commercial confidentiality agreement?

    1. Avatar fastman2 says:

      im sure bDUK are verying the work undertaken – do you think that they would not have been –

    2. Avatar NGA for all says:

      @fastman2 ticking boxes on milstones is one thing, but we have seen no reconciliation reports, no evidence the councils can check the invoices supporting their payments and no evidence that BT’s capital contribution is being examined. This is consistent with the reports above.

    3. Avatar Somerset says:

      NGA – what, exactly, do you expect ‘us’ to see? All of the cabinet installation would appear to be carried out by contractors.

      I’m not saying either way is right or wrong, just do you really expect counties to publish details of which ducts were blocked and each individual activity?

      Are details of individual invoices available for any other council/government contracts?

    4. Avatar nga for all says:

      @somerset sympathies but it takes 10 minutes to show a 2.5 times increase in subsidy using bt info already in the public domain. Do you want more public money for fttp or do you want to be broken up before that happens? you cannot sustain this nonsense. Actually the odd thing is you might get away with it.

    5. Avatar Somerset says:

      NGA – What level of detail do you think should be available to the public?

    6. Avatar NGA for all says:

      @somerset 12 components of cost aggregated to handover point, split public subsidy, bt contibution, white paper on technical solutions including details of future proofing.

    7. Avatar NGA for all says:

      @somerset This mapping from Eircom is simple. http://www.eircomwholesale.ie/Our_Network/ . They like Belgacom and indeed Call Flow Solutions will be able to confirm that even for quite rural areas the average cost per path/cab is about euros25k without subsidy and these economices can last to 90% ish coverage. So the average public subsidy(state aid) of £46k (includes USC) identified by the NAO needs to be explaind.

  2. Avatar Matthew Williams says:

    Glad to see that this is still going ahead even if they haven’t managed to find the full amount of money quite yet. Good to see there is still a good council demand for a 100% super fast broadband in some of our most rural counties.

    In one way I understand why BT can’t say where exactly they will deliver there network as obviously circumstances on the ground can change. But I’m not sure they have a right to ask for NDA when a lot of the money is coming from Public funding and not private investment.

    1. Avatar telecom engineer says:

      NDA is understandable when dealing with suppliers in private sector. Iam sure cost of parts when sourced from various vendors (bt always do to keep competition on cost hence using both eci and Huawei) and charges by subcontractors who also serve competitors would obviously be sensitive to many different companies. But then isnt a report with reciepts redacted or a final cost analysis possible?
      Honest question, I dont follow all the politics.. has a council / region reported on their overall assessment of costs of delivery.. any complaints of not hitting target within budget or is it still early days? Everything I have seen has been prior to signing or the pr when rollouts get extended..

  3. Avatar fastman2 says:

    Matthew actually there has probably been and investment inexcess of an additional 1BN Billion pound (outside of the 2.5bn already allocated to cover the 66% commercial project) perhaps you were not aware of that and assumed it was primariy government money

    1. Avatar Matthew Williams says:

      I am quite aware of that I am saying a fair chunk of the funds is still Public funding what shocks me is the places where BT apparently can’t deliver broadband with subsidy that is crazy.

    2. Avatar Matthew Williams says:

      Without*

    3. Avatar nga for all says:

      @fastman2 I must question the £2.5bn. Bt execs report to analysts that commercial rollout capital no more than £1.3bn bt slide available. More interesting is that bt’s labour capitalised is some 60%. These numbers di align with emerging benchmarks for partial fttc rollouts. You did finish 18 months early so that isin 18 months less of capitalised labour charges.

    4. Avatar NGA for all says:

      @Fastman2 You also should explain why BT’s overall capital budget actually reduced during the VDSL commercial rollout period. When you talk of standalone case this is a purely internal creation. The vast majority of the capital came from not maintaining the copper access network or other platforms. There is a 25 page analysis available from one of your analysts on this topic.

  4. Avatar fastman2 says:

    box ticking i realy dont think so — lost for words

    1. Avatar nga for all says:

      just look at the difference between a openreach quote for private gap funding for any pcp with a quotation for the same pcp from bt group for public subsidy?

    2. Avatar telecom engineer says:

      @nga thats an interesting point, have we got such an instance? Also bear in mind, and not to make excuses before we get the facts, that some regions included social benefits with the bids.. I heard of one which included the creation of new local engineering jobs, apprenticeships, work experience placements etc… Not involved enough to say that affected the price per cab but if bt were going at the bid in purely capitalist terms it must have factored in somewhere at least in part, if so that would show an increased cost compared to a one off gap funding.. Also would a gap funded cab be subject to clawback? If not would the higher future returns be factored in?

    3. Avatar nga for all says:

      The answer is yes. The other points you raise are not state aid compliant.

    4. Avatar fastman2 says:

      you can’t gap fund a cab that its the BDUK depployment — so not sure what your point is exactly — FYI some gaps been issued alot higher that the figures mentioned

  5. Avatar Chris Conder says:

    bit of a superfarce having a tender process when only one firm can win it.

    1. Avatar nga for all says:

      No excuse but The Communications Act 2003 does make clear, the very reason for the acts existence was and remains bt,s enduring monopoly in local access networks. State aid process demanded evidence of competitive dialogue. They got it but PROCESS allowed BT to use its dominant position to establish milestone payments unrelated to incremental costs.
      BT Group take short term position. This was stupid and it will cost rural customers and indeed bt .shareholders dearly.

    2. Avatar fastman2 says:

      Did they — did you attend every negiotiation or this just more mis/disinformaion t

    3. Avatar No Clue says:

      No need to attend any meetings its been known for ages the only people that get BDUK money must also be a wholesale supplier, so that leaves BT or Virgin and as Virgin decided they are not interested in the government handouts that leaves BT ONLY.

  6. Avatar fastman2 says:

    or do you have abeef with the pocesss and its impact on you

    1. Avatar nga for all says:

      I have zero complaint against anybody. None zip. More Transparency will lead to openreach engineers doing more work and securing best in europe. I am happy to be proved wrong.

    2. Avatar nga for all says:

      process (cd)€ forced bt to be defensive, rather than giving it room to offer its best. Bt has wholesale obligations, it’s pricing for the Framework had to accommodate the possibility of losing, and thus selling to the other party. Process prevented bt offering its best. But the process was needed to get state aid approval. This is being charitable but the basics are i think sound. Your free to disagree and i welcome your questions. Please keep testing my motivation. It is good you do.

  7. Avatar fastman2 says:

    callflow is an SLU monopoly no choice call flow price of nothing — not quite the same as an open eaccess

    1. Avatar NGA for all says:

      Eircom and Belgacom do have wholesale obligations. Call Flow referenced as its purchasing power for VDSL cabinets will be signficantly. Its payments to BT will also be at published wholesale rates, while BDUK costs are supposed to reflect incremnetal costs.

  8. Avatar fastman2 says:

    gap funded cabs which are prviate monies are not subject to clawback in the same way neither are commercical cabs

    1. Avatar NGA for all says:

      Clawback is designed around to recover costs where the take up is exceeded. It is not designed to address where the milestone payments became divorced from the incremental costs.

  9. Avatar fastman2 says:

    NGA

    Private funded cabs (gap funded with private monies) will only be where BDUK are not involved you cannot private fund a cab with is already scheduled / phased in a BDUK Deployment (uniless the community that are are aasking to fund gets no benifit from the BDUK cab being enabled

    1. Avatar NGA for all says:

      That’s not the point. The point was the BDUK subsidy when compared to the privately gap funded cabinets became divorced from the underlying incremental costs. This matter if examined thoroughly by a state aid expert, would not be permitted in any normal circumstance.

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