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UPDATE ISP Kijoma Says BT NGA Broadband Overbuild Wastes Public Money

Friday, May 1st, 2015 (8:44 am) - Score 2,730

Ordinarily the news that BT is bringing fibre optic broadband (FTTC/P) cables to your area would be welcome. But it’s not always so and sometimes the use of public money to help upgrade the smallest of UK rural areas, especially when a “superfast” (24Mbps+) capable provider is already serving local customers, can raise concerns.

At present the Government’s Broadband Delivery UK programme is throwing around £1.7bn of public money, primarily in BT’s direction, in order to ensure that fixed line superfast broadband speeds reach 95% of the county by 2017/18. So far the progress has been good but it hasn’t always been without controversy, particularly with regards to overbuilding.

In fact there have been a number of incidents where the deployment programme has been accused of wasting money by allowing BT to roll-out into areas that are already covered or in the process of being covered by other Next Generation Access (NGA) providers, such as part of B4RN’s network in Lancashire (example) or Gigaclear in Wiltshire (example).

Europe’s State Aid Rules are designed to prevent such problems from occurring (though some overbuild around the edges is considered acceptable), although the implementation can be very bureaucratic and more than a few councils could be accused of having turned a blind eye to the good work that some alternative network operators are doing (note: often without any recourse to public funding).

A more complicated example is that of Fixed Wireless Access (FWA) providers, such a VFast, Kijoma, Relish and many more. Some of these ISPs are able to provide flexible data allowances, better than superfast speeds and low latency connections for affordable prices over wide areas, but they’ve also been largely shunned by a number of local authorities.

Take for example the situation that Kijoma currently claims to be experiencing in West Sussex (England), where they note that BT have been building fibre optic cables towards Hooksway, a remote hamlet of 4 properties. Elsewhere BT’s fibre also appears to be running from East Marden village all the way down the single track road, about 1.5 miles, towards Stoughton. Various other surrounding areas may also benefit from BT’s mix of ‘up to’ 80Mbps FTTC and some patches with 330Mbps FTTP.

Another area is Sutton Parish in Sussex, where BT’s deployment is predicted to involve 1 FTTC street cabinet and the rest FTTP for perhaps 3 hamlets + 1 other village and those beyond the reach of the cab.

The problem here is that Kijoma already covers many of these areas with wireless broadband speeds of up to 30-40Mbps (e.g. Sutton, Bignor, Barlavington, East/North/Up Marden, Chilgrove etc.) and they have a number of live customers, with take-up in some of their locations reaching as high as 96%.

Bill Lewis, MD of Kijoma, told ISPreview.co.uk:

I am not looking to be seen as the whiny competitor trying to preserve their revenues. Instead I feel the public need to see for themselves that significant parts of West Sussex in particular have gone without, mainly areas where the residents/businesses have no choice of Kijoma, ADSL at anything approaching 2Mbps or even 3G/4G etc.

The evidence is very strong that the money has been used predominately to overbuild Kijoma’s coverage and customer base. I.e. people and businesses with existing superfast connections, the majority of which have declared strongly that they do not want to change ISP, many of which use VoIP and have no desire to go back to Line rental and restrictive services either.

If you had Broadband at £17.99 and didn’t have to pay ~£16.99 line rental then I expect you would be reluctant to change too as it basically makes your Broadband £1 a month compared to BT , let alone the lack of minimum call charges, entirely free voip to voip calls and the mass of other features VoIP provides.

These areas also involve the most construction work and will have to be predominately FTTP in nature due to a lack of cabinets and a sprawled out population. BT flatly refused to fit ADSL to two exchanges in these areas on the basis of viability.”

The cost of digging pure fibre optic cables into the ground or slinging them over telegraph poles is far from cheap, especially when it comes to the arduous task of having to connect up individual properties, and as such it’s important to ensure that the public money goes towards those who need it the most. Clearly this may not always be happening. More over the page..

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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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37 Responses
  1. Avatar X66yh says:

    BT might be using their own money to upgrade those areas with existing superfast BB providors.

    I did read either on here or on TBB that there was (allegedly) some convoluted reason why B4RN did not want to engage in the OMR process

    1. Mark Jackson Mark Jackson says:

      A lot of the related work references the councils BDUK scheme, as seen in some other pictures that we have of the deployments. Kijoma has said they don’t have a problem if it’s purely commercial, but in a number of areas it’s not.. hence the whole article above.

    2. Avatar Gadget says:

      If it is BDUK deployment, doesn’t it come down to what the council defined the area as after their Open Market Review? If they declared the area white it will be in the contract to be upgraded, why it was declared white in that case is something for the Local Authority. That’s not to say it couldn’t be a subsequent contract amendment, but again something within the gift of the Local Authority to either initiate or agree.

  2. Avatar GNewton says:

    “altnet providers have found it increasingly counter-productive to engage with local authorities and instead prefer to simply focus on beating BT at its own game, by delivering a superior service.”

    I think that nicely summarizes the BDUK farce.

    1. Avatar PeterM says:

      But will enough people pay for that superior service to make it profitable. Remember with fixed wireless they need to be concentrated in a small area.

  3. Avatar Tim says:

    Kijoma says a lot, does little… Just look at thinkbroadband forums…

    1. Avatar PeterM says:

      The trouble is Tim, would you invest in extra capacity when you know that a state monopoly can make everything you do unprofitable?

    2. Avatar TheFacts says:

      Can’t be a monopoly when there are other suppliers in the area.

    3. Avatar PeterM says:

      @The Facts
      For me and most other postcodes in rural West Sussex the only way that we can receive fixed broadband is via a BT cabinet unless you count satellite of course but I don’t count that.

  4. Avatar Phil Coates says:

    To be fair, the restrictions on overbuild seem to be largely ignored most of the time. Locally, BTs decisions that several areas were ‘not commercially viable’ seem to have been predicated on the near blanket presence of Vigin Media. That has not stopped BDUK funded cabinets appearing – and not just in the ‘watershed’ areas.

    Seems to me that as the sole provider, BT simply tells Councils where there will go and the Councils just bend over and lube up.

    1. Avatar PeterM says:

      I was told by WSCC that they couldn’t legally improve my meager 3.5Mbps fibre service because of overbuilding.
      The reason was that they said fixed wireless was available to me – only it wasn’t!
      The fixed wireless provider they thought could provide me with a service was Kijoma.

    2. Avatar fastman2 says:

      im afraid that is incorrect – there are are a number of area identified as white which are now greyt due to other network activey — more consiprary theories Again

  5. Avatar PeterM says:

    The net effect of all this is that Kijoma have been frozen out of the West Sussex broadband market. The bureaucratic process, especially the EU rules, simply mean that no one other than BT can profitably provide us with our broadband in rural West Sussex.
    The consequence of this is that looking back Kijoma have been unable to expand their network and looking forward it will depend on the loyalty of their existing customers if they continue to offer their service in West Sussex.
    On a personal level I could certainly have benefited from Kijoma’s service. In the past I could only get 1.75Mbps on ADSL and now I can only get 3.5Mpps on fibre.
    If BDUK had embraced Fixed Wireless Broadband I would have been enjoying speeds of 30Mbps now instead of waiting to see when and if BDUK2 or BDUK3 delivers.

  6. Avatar Bill Lewis says:

    Thanks for the comments all.

    As PeterM states, there is no incentive for a long established commercial ISP to expand coverage at their expense if there is a state funded competitor with unclear objectives operating in the area.

    Although not alluded to much in the article, the primary objective of the county council was a “BT strategy”, Kijoma and any other operator within the county were an inconvenience and for the sake of gaining the maximum out of the BDUK pot, had to be suppressed/marginalised.

    West Sussex has 3 exchanges that BT refused to fit ADSL too (not viable they said). All 3 exchange areas are covered by Kijoma, including those who would be on lines too long for ADSL and definitely too long for FTTC (although they have 1 cabinet between them, the rest are all EO lines).

    If they were to put this in their bid for BDUK, it would of reduced the pay out somewhat i suspect. Fortunately for them the BDUK and EU process has continued to demonize all other technologies and non BT based providers since. So they probably have a water tight alibi now. “.Gov said we could do it”.

    Tims point is valid, on The Think broadband website there are some people complaining they cannot get the Kijoma service. But surely that is nothing compared to those complaining they cannot get a BT one?!? . Rather this than customers complaining in their droves.

    We know you cannot please everybody , so we start with existing customers first. New customers and expansion come second.

    This has worked for 15 years as a business in a sustainable way. It is a shame we have had to suspend expansion plans while this fiasco exists. But it does mean we are instead investing heavily in upgrading our infrastructure (again) for existing customers benefit.

    Bill

    1. Avatar fastman2 says:

      West Sussex has 3 exchanges that BT refused to fit ADSL too (not viable they said). All 3 exchange areas are covered by Kijoma, including those who would be on lines too long for ADSL and definitely too long for FTTC (although they have 1 cabinet between them, the rest are all EO lines

      Actually WSCC decided not to upgrade them abour 5 years ago – but lesat not the facts get in the way

  7. Avatar fastman2 says:

    there was a bid to upgrade them to ADSL and that was not successful

  8. Avatar PeterM says:

    Nutbourne is on the West Chiltington exchange in West Sussex. It has been upgraded to fibre but as it is about 1.5 miles from the cabinet that supplies it, only ADSL is available. The West Chiltington exchange is located at the Storrington exchange. Following the line by road that the phone cable takes, Nutbourne is located about 4 miles from the Storrington exchange.
    There are no plans, at the moment, for any upgrades to the West Chiltington exchange area.
    Customers can expect speeds of less than 2Mbps on ASDL at best, but a Kijoma speed test of just under 20Mbps is recorded by Think Broadband beyond Nutbourne in dial up land.
    The point of this ramble is simple. If BDUK runs Kijoma out of business, who is going to give this customer and probably 100’s more, the same level of service as they are currently getting?

    1. Avatar dragoneast says:

      Isn’t it the age old problem with any Government intervention, it distorts the market? The neighbouring town gets access to a motorway, mine doesn’t; we’re at an unfair disadvantage.

      Since some residents have bought a commercial solution, why can’t the rest of them do so if they’re that concerned? It’s the BARN solution. I was in this situation; I bought a Fixed Wireless solution when ADSL was inadequate, then BT came along with VDSL. The Fixed Wireless service has survived, playing the game to get both commercial and public support over its growing network – it tries not to go around upsetting people; I now have both.

      Politicians always try to bribe (enough of) the electorate – never all of them, difficult cases are a nuisance, except for their publicity value, occasionally; the law tries to restrain them (inadequately) as best it can. Meanwhile if you want something the only sure way to get it is do(support)-it-yourself, as ever. Why should anyone else go out of their way for your benefit? Only if there is something in it for them.

    2. Avatar NGA for all says:

      @dragoneast I understand your perspective but I think Parliamentary committee oversight has allowed the NAO and BDUK to formally identify BT 38% inflation of costs in their models. See clause 3.7 in the NAO January report.

      If the new batch of rural MPs have the appetite then forcing proper oversight of the state aid measure should 1) force proper sight of the gap funding model, 2) BT pays is allocated share of allowable costs and 3) the use of SEP contracts to reduce BT’s commercial investment is acted upon and reversed.

    3. Avatar TheFacts says:

      @NGA – and the rest of 3.7 says?

    4. Avatar NGA for all says:

      @The facts – the rest of 3.7 as would be expected has some mitigating comments about costs being more expensive later in the process, while the Scottish Audit office report argues the opposite, up front planning, handover points will mean average costs will fall. Given the mitigating arguement can be anything that suits the moment, the inflated costs have been found and recorded. The mitigating arguement gets you across a line until the next NAO report. The next report we hope can include a record of BT’s capital contribution.

      While the average customers served will fall, the economies scale of should be visible through to at least 90% coverage.

      What proportion of the total project costs have BT paid in West Sussex to date?

    5. Avatar TheFacts says:

      @NGA – 38% or 25%?

      ‘BDUK estimates that this £142 million variance reported so far is likely to be reduced by between £30 and £50 million. This is partly because of timing issues, as BT’s financial model profiled average unit costs, rather than profiling projected specific unit costs. There are also some possible further costs not yet charged by BT. But even if all of these costs materialise, BT would still have spent approximately £92 million (25%) less than its contracted forecast cost.’

    6. Avatar NGA for all says:

      @The facts – as I say the commentary is a post event justification. Cost Models were inflated, which was previously denied in Parliament. The commentary changes to match the message needed – see the Audit Scotland report for the inverse arguement.

      In West Sussex, BT contribution was supposed to c£12m or £4m in capital in phase1. It would be good to see the latter deducted from what should be no more than the cost of 300 cabs for phase 1 in West Sussex, just about the BDUK allocation of £6.2m.

      Hopefully, the new Parliament will focus on the application of the state aid measure, building upon the focus on costs during the last 2.5 years.

  9. Avatar FibreFred says:

    A nice sound bite blaming BT but surely they are only building within the bduk framework?

    They can only use bduk funds where bduk and the la says they can , sounds like bduk is to blame

    1. I’m with you on that one Fred 🙂

    2. Avatar PeterM says:

      A valid point but BT and BDUK have a symbiotic relationship when it comes to rural broadband. It is difficult to see how any of the altnets can gain any market share in West Sussex and I guess that applies to most of the country.
      When it comes to BDUK3 we will see that it will be impossible to provide fixed Wireless Broadband to the remaining 5% simply because the areas to be covered will be so fragmented. The poor s*ds will be left with satellite broadband.

    3. Avatar dragoneast says:

      Trees, existing and new buildings and hills also obstruct Fixed Wireless broadband apart from, and more often than, BT. Should they all be regulated or got rid of too? And should Fixed Wireless providers themselves be specifically regulated and forced to provide services as a utility, and ensure their signal sectors remain uncongested?

      I really don’t understand the logic that because one Fixed Wireless operator feels hard done by, every other Fixed Wireless operator must be the same. It’s not my experience, but then I don’t have an axe to grind. The argument seems to be that customer choice is fine, provided it’s for other people’s customers – the oldest argument against competition in the world. That battle was lost in the 1970s.

    4. Avatar NGA for all says:

      The submission of the coverage maps during the OMR, and Sussex acceptance or rejection of you as a viable supplier is key. ‘Viable’ tests were defined in the guidance but that should be clearly indicated to you or you may have failed to respond to some specifics on post code data, particularly plans for planned coverage. There is also a clause within the state aid measure 33671 which permits notification of new coverage so private investment can be protected. I am certain Gigaclear have needed to use this.
      Acceptance of your maps and plans means you effectively become a supplier of last resort for that community for broadband, so Councils need to be pedantic, they will not get forgiveness if they get it wrong.
      This is an issue between the company and the council.
      The BT issues are separate, but be aware that West Sussex phase 1, like all the phase 1 budgets are pumped high so that the c320 cabs will absorb c£8m of the subsidy, so a whole load more build is possible if the funds are managed well.
      If you wish to be supplier of last resort for broadband in some of these areas go back with your maps and plans, the backing of the community and make your case. The state aid clauses will permit it.

    5. Avatar NGA for all says:

      @Bill, I know its hopelessly idealistic but if West Sussex have paid for USC with BT, then at saner times BT might have used Kijoma for in-fill. A willingness to use local partners certainly featured in the requirements.
      That conversation might be worth having but the available funds and those emerging from clawback will be large.

  10. Avatar Bill Lewis says:

    Interesting comments on here. With respect to feeling “hard done by” , that is not the point raised here. The issue as i see it is many within the county are not receiving any Fibre build as part of the BDUK process . These areas have no other choice basically apart from satellite.

    WSCC are informing these people that they cannot spend the money there as Kijoma provide a service , even though we have declared we do not to the individual cases we have been involved in. We are being used as an excuse.

    On the flip side places that have nearly complete take up and coverage from Kijoma and have had for over 10 years , which includes all three of the non ADSL exchanges in the county, are having FTTP run everywhere over many miles of spread out small hamlets etc.. They had to run that fibre miles to even reach the area.

    The cost of this well exceeds the costs of putting in an FTTC cab next to an existing cab as most of the un served areas would need.

    The reason this has happened is a decision by WSCC before the start of the BDUK process to exclude any provider outside their clear “BT strategy” , responding to the BDUK OMR’s as we did had no positive effect at all and it wouldn’t as the decision had already been made.

    This is about mis-use of public funds / state aid to the detriment of those who need it, in order to spend it over building a very good service.

    Feel free to check customer speed reports on think broadband for the PO18 9JE area etc.. , then look at those outside that area on other providers for a clear example.

    Compton, a location Kijoma do not cover nearby appears not to be even on the radar for Fibre build for example.

    Bill

    1. Avatar NGA for all says:

      @Bill – for clarity can you repeat the 3 exchanges where you have been overbuilt – Nutborne, West Chiltington and ?

      I am not sure this is any comfort to you but money will be there for Compton as well.

      I cannot comment on the councils tactics in either using you to talk BT into an area, or to use you as an excuse as to why they are not going to a place. There priority will be trying to keep BT resource in West Sussex and not diverted elsewhere, avoiding overtime payments.

      The latter suggests they are willing to acknowledge your service and thus should be included in their mapping. If they map your service and publish it, it is acknowledged. If not their argument will not hold.

    2. Avatar PeterM says:

      @Bill
      I find myself totally disillusioned with the BDUK process, our fibre upgrade has done little for me and although we have another cabinet just 500m away we cannot connect to it because their is no ducting.
      Obviously it is expensive for you to provide a service for a small group of properties but would you consider providing that service if we could provide you with a location for a mast and a good contribution to the installation costs.
      We are within your general area of operation with other Kijoma customers just a few miles away. Peter Manfield. RH20 2JX

  11. Avatar MikeW says:

    Overbuilding is a thorny issue wrt any operator, but those offering umbrella services (fixed wireless and 4g mobile) are always at risk of overbuild – especially as most consider the fixed wireline services to offer the best options for the future, and the politicians aren’t immune to that feeling, even while supposedly being technologically neutral.

    But BDUK seem to be officially condoning overbuild, even of grey or black areas, so long as it happens as overspill from giving coverage to white areas.

    A number of recent (i.e. SEP projects) specifications for white/grey/black areas now specify that “an area” will be considered white unless at least 90% of premises in the area can already get superfast services from Virgin. There’s a definite move to not risk leaving people out through small holes in coverage.

    1. Avatar NGA for all says:

      Crikey – is this guidance written down?
      1.) So much for hard to reach.
      2.) The impact on Virgins proposed £3bn investment.

    2. Avatar MikeW says:

      As I said, there are a number of SEP project OMR/public consultations that have an updated definition of an NGA white area. Same for the definitions of the phase 3 market test pilots.

      They tend to differ in some of the details, but they generally cover the cases of
      a) Partial coverage;
      b) Overlapping coverage by multiple operators;
      c) A combination of (a) and (b).

      Requiring an area to have at least 90% coverage of infrastructure seems perfectly sensible, if you are one of those people not covered, or infuriating, if you are a provider of 89% of the coverage.

      It isn’t helped by a non-definition of “an area”, which allows the statistics to be suitably bent depending on persuasion. For the purposes of mapping, and for easy lists, a post code is one way to define an area. But when BT is involved, is it better to define an area as the service area of a cabinet?

      Of course, where deployment of, say, an FTTC cabinet is allowed under these partial/overlap rules, subsidy can only be claimed (on a per-premise calculation) from the properties that were actually sub-superfast. Likewise the government statistics (on number of properties passed) are compiled using only the properties that started sub-superfast and moved to superfast.

  12. Avatar Bill Lewis says:

    it is good to see the official response from the council. Kijoma needed to provide evidence of individual properties, they demanded our business plan, finances, projections etc.. too.

    They also stated that even if a single property was not covered by our service in an area then they would discount its existence for the whole area.

    The point is it was way before the BDUK process that they had decided to exclude us from the equation. the rest is pretty much the plans for Arthur Dents house destruction in Hitchikers guide.

    Bill

    1. Avatar MikeW says:

      A slow response from WSCC there – but surprising it came out before the election!

      It looks like WSCC were being particularly harsh on Kijoma in the early days; this attitude doesn’t seem to have extended to my county. Now we’re getting to the later stages, the FWA operators are becoming a key component.

      However, for me, one particular element of WSCC’s response stands out: “We have heard since from communities who have challenged Kijoma’s declared coverage of areas where a wireless supply of broadband is not available.”

      This matches evidence (anecdotal, obviously) I have seen online, with people complaining that they never get a response from Kijoma when asking about a new connection. In these complaints, Bill’s response is that he puts his company’s effort into supporting existing customers first – which is as close an admission of “we ignore prospective customers as a waste of our time” as he ever appears to get.

      To my mind, the idea of good customer service applies equally to prospective customers. Ignoring these people (whether their area is not covered, or the network has insufficient capacity, or through laziness or overwork) is tantamount to saying that their area is not covered.

      Unstated in the requirements from the EU, or from central government, or from the councils, is the basic fact that for an area to count as covered, the operator claiming coverage has to be willing & able to accept new customers – and to be willing & able to deploy new equipment if necessary. Without this, all the complicated technical stuff involving laws of physics behind DSL range, or radio propagation calculations, or network capacity loading, is moot. Refusal of service inherently creates an “NGA white area”.

      This consideration applies to BT equally: If they filled up an FTTC cabinet, and refused to stand an additional cab – then they can no longer be considered to cover the area. (No, Walter, I don’t think that only partly deploying cards or tie cables counts – provided a timely upgrade subsequently happens). Or where the estimate tool says the line is too long, and CS droids tell you that you cannot order.

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