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Is the Public Accounts Committee trying to rewrite history?
Wednesday 07 August 2013 11:03:36 by Andrew Ferguson

BT may be able to utilise the resources it has to make it easier to bid for the BDUK work, and there are many questions to be answered as to how the BDUK process was set-up, but reading what Steve Barclay MP has written in The Telegraph in isolation one gets the impression that the UK at one time had a publically stated goal of 100% superfast broadband coverage, and that BT is solely responsible for it being scaled back.

"Throughout the bidding process the company has been predictably successful in exploiting its infrastructural advantage over its rivals. In principle, there should not be opposition to this, save for the fact that BT is now delivering 10% less than initially planned and is turning back the clock on twenty years of competition from small and medium size firms who have been able to drive down prices for hard pressed consumers. "

Steve Barclay MP, who sits on Public Accounts Committee

Now we do not recall any politician stating an ambition for 100% superfast broadband coverage in the UK, and one of the first speeches in June 2010 by Jeremy Hunt talks about broadband and how while the 2 Mbps Universal Service Commitment is 'paltry' it is necessary. Then moving forward just one month we have news on the delays to the USC and the 'best superfast broadband in Europe' phrase, but this was couched already with qualifications, i.e. not a simple 100% can get it idea.

There was of course the Digital Hub announcement in December 2010 which created the idea of a digital village pump, which was a nicely worded idea but with little substance. In some peoples views that might count as a commitment to getting superfast broadband to everyone, but that is something of a fantasy approach to the idea, as it would rely on communities sharing a universal view.

At the end of the day, if the BDUK process had worked perfectly, we would have had perhaps BT winning in a dozen cases, the Fujitsu consortium in another dozen cases and then a variety of other firms winning elsewhere. This would not have created competition for rural communities still, as the funding still only went to one player in each county area, now in a dozen years time once the EU State Aid requirements had lapsed we might have seen BT starting to roll-out in areas where it did not win, which raises the real question an important question is the BDUK process actually addressing market failure or is it just reducing the timescale for the inevitable, from a ten year timescale down to a five year one. It is our belief that even without the BDUK process, BT would have got close to 90% coverage by around 2020.

BT has questions to answer, but there are bigger questions to be asked of the politicians and consultants involved in the period June 2010 to December 2010 as to what they thought £530m of funding would actually achieve.

Comments

Posted by csimon over 3 years ago
The amount of money spent to halve the timescale to 90% coverage is open to debate. It's priceless in some respects. but I think the main issues are the failure of the "market" to provide an appropriate comms infrastructure for the UK without public handouts stepping in, the failure of the "market" to provide competition in vast areas of the country, and BT's holding-back policy until they're given public money - sounds like holding the country to ransom!
Posted by herdwick over 3 years ago
The market has provided 65% of the country's population with superfast broadband. It hasn't provided every home with any service, nor has the public sector - apart from the Royal Mail which is I think the only truly ubiquitous service.
Posted by herdwick over 3 years ago
Even the final Digital Britain report had the USC as "2Mbps to virtually every household in the UK" http://www.official-documents.gov.uk/document/cm76/7650/7650.pdf p57.
Posted by SimonWindsor over 3 years ago
Watching the PAC Rural Broadband meeting the other week, confirmed my view that BT's rollout has been optimised not to interfere with its leased line business and to maximise its chances of winning BDUK projects.

On the other hand, the BDUK project was constructed to favour single suppliers who could implement easily monitored solutions.

At the end of the day, BT will have received a £530 millian subsidy to build its network at the expense of tax payers and competitors. Not good.
Posted by JNeuhoff over 3 years ago
£530 million Pounds wasted on BT, with no ROI. And most of it went to yesterday's VDSL copper, hardly any genuine fibre-optic broadband services!
Posted by gah789 over 3 years ago
Politics revolves around choices made or not made. This choice was to provide ~30% of the population with an upgrade from ADSL 2+ to VDSL, which they may not appreciate or use. That was simple and corresponded nicely to BT's existing investment strategy. As you say, it has advanced the inevitable by perhaps 5 years.

The choice not made was to duck the question of what to do about about the rest, especially the few tens of thousands with no or absolutely minimal ADSL (well below 2 Mbps). This requires imagination & decentralised solutions - much too difficult!
Posted by gah789 over 3 years ago
Setting aside the obsession with the "super-fast" label, many things could still be done at relatively low cost. For example, upgrade every exchange to 21CN with costs shared over the whole network via line rental charges. Or, much the same thing, provide a common carrier type of backhaul network for non-21CN exchanges. Or, ...

As I said, this requires imagination and a commitment to solving the problems in remaining 5% rather than making a vague universal service commitment with not the slightest idea of how this is to be fulfilled.
Posted by New_Londoner over 3 years ago
As it standa over 90% of the population will have access to "superfast" broadband, a good chunk of the rest will see a speed increase but not to 24/30Mbps. This should improve when decisions are made about the so called "final 10%", which is actually 5% or so.

If some on here had their way we'd be spending the money on FTTP that would benefit a small fraction of the final third, take far longer to build. Others go for lots of disagrgegated "alt nets", with little or no choice of ISP, no track record etc, and some liikely to fail as the community wifi projects did last decade.
Posted by New_Londoner over 3 years ago
What we're actually getting compares well with other major economies in terms of availability and price, and has an upgrade path using using vectoring or G.fast. Those demanding higher speeds can pay for fibre on demand.

And all this for a fraction of the (public) money that the likes of France, Australia, Korea etc have spent. In terms of value for our tax money, I for one am pleased not to see vast sums being wasted a national FTTP project when there are plenty of other funding priorities like schools, hospitals and so on.
Posted by New_Londoner over 3 years ago
As for the MP, hardly a surprise to see more grandstanding from people more inetrested in getting media coverage than in understanding the detail of the issues they are supposed to be dealing with. The grasp the PAC members have on the reality of BDUK is lamentable, a real eye-opener in terms of the calibre of our MPs.

It would be funny if it wasn't for the fact that we pay these people, they work for us!
Posted by SimonWindsor over 3 years ago
I don't think the PAC was that bad, local councils and DfCe are responsible for the BDUK project and should have handled it better.

I accept that some areas are unviable for exchange/cabinet options but 4G should I have rolled out as an option, and now that BT have a chunk of 4G maybe they will.

Also, if any area that receives BDUK funding are more successful than an area that did not, BT should refund all BDUK money for that area to the council/government for use in other areas.

Posted by andrew (Favicon staff member) over 3 years ago
On the refunds, there are clawback options so that if an area reaches take-up that would make commercial roll-out viable.
Posted by SimonWindsor over 3 years ago
I had heard that, but no where I have aI seen a definition of successful take up.

The criteria for commercial roll out has never been defined by BT, and in many areas appears random, so not sure how a simple definition of successful take-up can be used.
Posted by fastman over 3 years ago
Simonwindsor

there are specific clawback criterai for those Cabs which are definded as BDUK cabs (whether they sit in commercially deployed exchnages (But cab not covered under commercial deployment) or they sit in a BDUk funded exchange and are covered under BDUK
Posted by JNeuhoff over 3 years ago
@andrew: About the clawback: Does that mean that soon almost all of the BDUK money will come back? Because surely once a BDUK area has been set up with VDSL services, the average takeup by customers will be the same as in commercially rolled out areas.
Posted by andrew (Favicon staff member) over 3 years ago
Cannot answer on the takeup level needed or how much will be handed back, as don't have precise figures.

Down to BDUK to mandate and BT to play ball, but yes there is a possibility councils might get some of their money back if take follows pattern some people say it will. ie. demand much higher in rural areas.
Posted by themanstan over 3 years ago
but not that much... normally only a few percent more. but percent uptake is not the what is what makes commercial viability it is raw physical numbers, which is why often an urban 4% is viable and 10% rural isn't. 4% of 25,000 vs 10% of 4000 lines... easy math
Posted by GMAN99 over 3 years ago
100%? The only mention I've seen of 100% was at PAC and the BDUK guys hadn't heard of it either. Surely as they've spent millions in admin its just a case of referring to a scoping document?
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