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Worcestershire UK Criticised for Low BDUK “Fibre Broadband” Take-up

Friday, December 5th, 2014 (8:05 am) - Score 654

The £21m Superfast Worcestershire (England) scheme shows why councils might be nervous about revealing the take-up figures for their state aid supported roll-out of BT’s “Fibre Broadband” (FTTC/P) network. A Freedom of Information (FoI) request has revealed that the county’s uptake for related upgrades is just 3.2% and naturally political opponents have been quick to criticise.

At the end of November ISPreview.co.uk published some of the first official take-up figures (i.e. premises that have subscribed in the projects upgraded areas) for the national Broadband Delivery UK (BDUK) scheme (here), which revealed that the programme in Wales was running at 12% and Dorset 7.2% (so far all of this data, including Worcestershire’s above, is to the end of September 2014).

The figures appear low, although in a general wide-area deployment (as opposed to being strictly demand-led or partly community built) it often takes a bit longer before consumers a) become aware of the new service, b) see a need for it (especially if many of the initial the upgrades occur in areas that can already benefit from good ADSL2+ speeds) and c) are willing to spend the extra £5-£15 per month premium in order to receive it.

In that respect it’s also worth noting that Worcestershire’s deployment phase only started earlier this year, unlike the more mature BDUK projects that began in 2013. As a result Worcestershire’s scheme had only managed to reach an additional 6,833 homes and businesses by the end up September (note: they’ve just hit their end-2014 target of 10,000 and ahead of schedule), which is up from only 1,400 premises during early summer (i.e. most of the premises went live during September, so we probably shouldn’t expect to see much uptake).

In a general deployment the “build it and they will come” mentality takes a lot longer to reach fruition, but the game of politics means that none of this matters.

Councillor Paul Denham, Labour, said (Evesham Journal):

Given the financial hardship in the country and the county, is this really the best way to spend millions of pounds of taxpayers’ money when people are homeless, struggling on benefits and relying on foodbanks? Certainly the rate of sign-up is very low and that rather questions whether there is demand in the first place.

Many people will be served by the fibre optic network but may not be able to afford it and as a large, national company BT should be able to provide a universal service without public subsidy.”

It’s interesting to note that Denham’s criticism doesn’t focus any of the BDUK programme’s truly practical shortcomings, which might at least have been more understandable, but instead appears to criticise the general approach of using public money to help achieve universal coverage of superfast broadband (24Mbps+) services.

Plenty of studies have pointed to the perceived social and economic benefits of such upgrades, which over the longer term would arguably help to pay for tackling the problems that Denham highlights, although this is ignored. By comparison putting more money into tackling homeless people is all well and good but you also have to make money before you can spend it and that’s difficult to do when the country is struggling with a mountain of public debt. But common sense aside, there’s a General Election coming.

Meanwhile the Worcestershire scheme will continue to deploy towards its goal of reaching 90% of local homes and businesses by mid-2016 and hopefully 95% by 2017 (assuming enough public match-funding can be found to achieve the latter). The local authority is also planning a new advertising campaign to help raise awareness of the service.

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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 Twitter, , Facebook and Linkedin.
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20 Responses
  1. Avatar Phil Coates says:

    ‘b) see a need for it (especially if many of the initial the upgrades occur in areas that can already benefit from good ADSL2+ speeds)’

    Doesn’t that rather degrade the validity of the ‘inside – out’ approach.

    1. Mark Jackson Mark Jackson says:

      ..Probably not enough to void the investment calculation, especially as it’s usually more efficient to take the inside-out approach (faster return on the investment). A small percentage of tens of thousands (premises) can rake in more than a high percentage of a few hundred. Of course each area is different.

    2. Avatar MikeW says:

      I think a (d) is needed too: That a subscriber has come to the end of an existing contract and is able to move.

  2. Avatar Steve Jones says:

    It would be nice to see some sort of take-up rate normalised for how long the cabinets have been enabled. The Welsh example showed that it takes time as (from memory) it reached about 18% after a year. It’s only by having some form statistics corrected for this that it will be possible to make sensible comparisons between geographical areas given that the timescales are all over the place.

    Another thing to note is that the break-even point isn’t the same for all cabinets. A low installation cost site serving more lines will need a lower take-up rate than an expensive one with fewer lines. No doubt such a cabinet-by-cabinet breakdown is rather too complex for things like “claw-back” calculations, but it would be intriguing from the point of view of cost effectiveness. I would have thought it essential information for things such as FTTP vs FTTC evaluations for a given location.

    1. Avatar No Clue says:

      The welsh take up is not even 12%

    2. Avatar TheFacts says:

      The take up after a year is the important number.

    3. Avatar No Clue says:

      No the take up as a whole is the important number and it is under 12%

  3. Avatar GNewton says:

    Talking about an inside-out approach doesn’t make much sense. Even smaller villages and towns tend to be high-density population areas, with the given advantage that they have no competition from cable, nor good enough old fashioned ADSL services. Hence, these areas should have been targeted first, to ensure sufficient early takeup figures.

    Of course, the BDUK/BT approach in general is a farce. It starts with the madness to avoid genuine fibre broadband, and the fact that they don’t REPLACE copper with fibre, if they did there’d be no need to worry about low takeups.

    And don’t cry out that it can’t be done, and don’t come up with the argument that the poor LLU-providers need to protect the DSLAM equipment investment at the exchanges. Their equipment should have been able to take both copper and fibre lines in the first place, the LLU knew about the risks from the very beginning.

    Overall, this looks like just another case of the typical ‘Can’t do’ attitude here.

    1. Avatar Steve Jones says:

      Copper cannot be removed under the current regulatory environment as there’s MPF is a mandated product. Ofcom would have to change the rules and, further, it could hit other legal issues from LLU operators. They might well have a good case for compensation on the basis that they made their investment on the basis of that product. Of course, it couldn’t be argued forever as there is a payback period, but it’s certainly going to be longer than current BDUK thresholds.

      There is an example (in a small non-LLU exchange) of Ofcom approving a fibre-only trial, but those circumstances don’t apply everywhere.

      In any case, it would take vastly more money than is currently on offer to do fibre-copper swap. It’s also a much longer process as it means delivering fibre to every household (not just, as in the case of FTTP, those who want it). There are also issues of a few legacy services that require copper loops (from memory, there were some alarm systems, but I think there are a couple of others). In any practical swap-out scenario, there would be a period of a few years with parallel services. This is what is happening in Jersey.

      This is not to say a strategy of a copper/fibre swapout couldn’t be done, but it would take a change to the regulatory environment and proper way of paying for it. It would also take time. My quick estimate is that the cost would be the equivalent of £3 per month on wholesale costs per line over a period of about 30 years (when cost of finance are included). Of course, the amount could be reduced, but over a longer period, but it will take time. You can’t simply wipe out the regulatory value of the copper network. Not only would it be a massive right-off, but would certainly end up in the courts.

      A copper/fibre swapout needs a strategy, and something like BDUK, which is designed to maximise coverage at least cost will never do it. In a country the size of the UK, then I think it would take perhaps 10 years, but probably longer. There’s only so much capacity to do such things, and the complexity is massive considering the very complex multiple service-provider industry that there is in this country.

    2. Avatar FibreFred says:

      He’s not interested in rules and regs Steve, rules are just displaying a “Can’t do” attitude 😉

    3. Avatar Steve Jones says:

      I know, but I’m just setting out what would be a viable approach. Frankly, if the country did want to go ahead with a 100% fibre infrastructure, it will need a strategy to do so. The current regulatory environment is a barrier and we’ll just end up with a patchwork approach with cherry-picking.

      It is affordable without public money if the right regulatory approach and model was used (less than £1 per week per household over 30 years). However, it will need a mechanism that enabled cross-subsidies to be used as it’s difficult to see any commercially sustainable case for large areas of the country. Indeed there are several other services (post, rubbish collection, electricity distribution, phone) where exactly this is done.

      Unfortunately it breaks down when operators in “cheap” areas can undercut national services. We are seeing some of this whereby alternatives to the Royal Mail can decide to operate in some areas and not in others.

      I do wonder about the possibilities of having explicit cross-subsidising licensing schemes. Roughly speaking, those service providers who choose to operate in “low cost” areas have to contribute to a fund whilst those in expensive areas will draw from it. There’s nothing to stop an operator working in both. In the case of something like or postal facilities, then this would be delineated on geo-economic areas. (But the model might be extended to other services where cross-subsidy is required where something other than geography matters – perhaps demographic groups). All this is possibly a bit fanciful and a potential bureaucratic nightmare, but if cross-subsidy is to be used in areas open to competition then it might be one way forwards.

      nb. I think it is the case in the US that the major telcos have to contribute to a central fund for rural telecommunications infrastructure.

    4. Avatar GNewton says:

      @Steve

      I agree with your thoughts about the needs of changing the regulatory environment to make cross-subsidising easier. However, this still leaves the UK telecoms industry with the looser-mentality they have, especially BT.

      High-density population areas should be relatively easy to cover, howver there are loads of examples, e.g. small towns, which BT won’t touch. One of the reasons being its ‘one-size fit all’ approach which doesn’t work in the real world.

      BT has to act like a business, not like a beggar for public money, and not with its current ‘Can’t Do’ mentality. Just take a quick look at BTs own business forum to see why: https://business.forums.bt.com/t5/Feedback-general-chat/bd-p/Intros

      Also bear in mind estimates for fibre deployment tend to be grossly exagerated. The UK telecoms could learn from others like Telefonica or Jazztel in Spain which do fibre for a fraction of the costs in the UK. Indeed, the next madness about to happen in the UK in the next few years is that we’ll see VDSL2/G.fast being deployed to within 50m of a dozen properties instead of installing FTTH.

      And let’s not forget people here in the UK who still believe fibre can’t replace copper because of emergency/alarm systems, so it would be good to educate people. First thing to do inform them about the ASA lies which calls twisted pair copper wires ‘fibre-broadband’.

    5. Avatar TheFacts says:

      People who believe fibre can’t replace copper need to know about ASA lies, what is that about?

  4. Avatar X66yh says:

    If BT really did behave like a normal business then all the rural expensive/difficult to maintain lines would be dropped and the residents would have a stark choice
    1. no service at all once it failed.
    2. A service that once failed the full repair costs would be dumped onto the line owner to pay.

    The reference to the ASA made by another poster is that the ASA recently decided that FTTC can be called fibre optic broadband as the small amount of copper in it made no difference: plus other reasons quoted – look it up on the ASA’s site.
    I know who are the original complainants and they are appealing the decision to the independent adjudicator.

    1. Avatar TheFacts says:

      How alarm lines work has no connection with a product name.

  5. Avatar X66yh says:

    @Gnewton
    In respect of the last 50m to the house can I ask you to consider the following point.
    FTTP company Gigaclear only supply at their cost to the connection pot at the house land front boundary. From there to the house whether that is 15m, 50m, or 100m is at the cost of the householder to organise, argue over and pay for. They do have an installation partner/contractor for the householder to get quotes for.
    Now the point is that Gigaclear know that this last section to the house from the road is a great deal of aggro and cost one way or another and they are making sure it is not themselves that end up with the bill.

    1. Avatar No Clue says:

      There install charges are around £50 good luck getting any BT product higher than FTTC for a £50 install

  6. Avatar fastman2 says:

    best of luck in getting a fix if you then have a fault and you did the DIY work between the POT and your house

    1. Avatar No Clue says:

      I take it you have experience then or is that just more of your hearsay lets bash something thats better than BT pointless contribution?

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