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Public Accounts Committee report teases but gives no answers
Tuesday 01 April 2014 11:12:37 by Andrew Ferguson

The Public Accounts Committee (PAC) has published its report on a meeting held in January 2014. The report provides the official summary of the meeting that we covered in our news eight weeks ago, and have also been covering significant progress from the actual projects themselves.

The PAC exists to ensure that value for money is delivered with public money, but aligning this with commercial realities and the complex nature of the real world is never easy. The persistent complaint by the PAC is over the level of mapping information published, but as an outsider from the BDUK process the fragmentation of the UK into 44 projects was bound to lead to 44 different ways of doing things, if we as a nation wanted a consistency then larger projects or a firmer grip by DCMS on the process was needed.

In terms of transparency and value for money the day that the DCMS started the ball rolling on the projects that were not part of the original pilot scheme was the day it all fell apart. Three years ago a £50m pilot programme was announced, but none of these have completed to allow for full inspection and given the pressure of the 2015 date to reach 90% coverage of superfast broadband across the UK it was always unlikely to happen.

Looking forward, one cannot but wonder what potential investors looking at bidding for the next round of projects are thinking, perhaps trying to assess what the costs will be for the paperwork involved in a Government procurement project and the financial impact of criticism by PAC. BT may be evil in wanting to protect information about its commercial model, but we suspect almost every other commercial body that might be interested in a gap funded project would have similar concerns.

Competition has been held up as the gold medal of procurement for some years now, but the BDUK process was meant to be operating in an area where commercial competition had failed, in essence throwing money at something that has already failed tends to discourage firms to try and do better in the first place. So in effect BT has known since around 2008-2009 that it could do the easier bit of its fibre roll-out and rely on a good chunk of funding to go further.

The problem for those living in the final third of the UK, (the majority of which is not rural) is such that many millions care little about political battles and just want online order checkers at the big household name providers to say they can order a faster service. The debates over whether BT is giving value for money will only really be known in 2025 when either the digital economy becomes a 21st century British Leyland or we are home to many new companies who pay UK tax but trade globally and underpin a prosperous United Kingdom.

Until 2025 we can argue over the morals of not rolling out to one cabinet because the costs were seen as higher and changing the plans through to what levels of overlap are predatory or not with existing commercial roll-outs (e.g. Virgin Media) or community led projects.

The funding to take coverage to 95% superfast across the UK (Scotland has a lesser 95% with fibre based coverage target) is likely to go to BT, mainly because of time pressures and the cost of running another complete procurement exercise. The experimental funding for the next 5% cannot all go to BT, the maximum any one commercial operator can win is 1/3rd of the funding, so maybe its third time lucky and an opportunity for more firms to find out why you always charge more if working with a local authority to account for the extra administration costs involved.

A final sound-bite, if in the UK we had wanted to do it right, we would have set-up a national FTTP roll-out scheme with committed funding of £1bn per year for the next 15 years to add to commercial funding and create a brand new infrastructure operator, i.e. rebuild the GPO of a bygone era, but then should they use GPON or point to point fibre?

Comments

Posted by cyberdoyle over 3 years ago
What a shame they haven't done it right. Our children will remember this.
Posted by Spectre_01 over 3 years ago
^ The drama is strong with this one.
Posted by WWWombat over 3 years ago
Interesting quote:

"BT has committed to allow local authorities to publish coverage information on which locations will receive superfast broadband at a complete 7-digit postcode level if they choose to; a greater level of detail than its contract obliges it to or than is contained in the speed and coverage templates."

However, PAC remains disappointed that speed & timing cannot be predicted & published before surveys are done.
Posted by WWWombat over 3 years ago
And another:

"The Department told us that in the last few months it has spoken to 57 different suppliers in relation to the additional £250 million of broadband funding from 2015."

"It told us that it is very interested in exploring different technologies as it tries to reach the hardest to reach areas where there is less existing infrastructure."
Posted by WWWombat over 3 years ago
And finally, we get to the bottom of the confusion about Postcodes:

- BT are contractually bound to supply detail to councils at the 5-digit postcode level.

- BT are happy for councils to publish detail at 7-digit postcode level, if they wish to. BT will help with this.

- Councils might not wish to, for reasons of managing expectations (ie plans may change)

- BT will not let councils publish the "speed & coverage templates" because they contain more sensitive information that just speed & coverage

- It takes 9 months in each deployment phase to get detailed speed estimates.
Posted by WWWombat over 3 years ago
There's another mention of FTTRN too:

"There are fixed-line solutions, such as fibre to the remote node, where we take the same kind of fibre to the cabinet technology and put it into a much smaller format and into a much smaller community, so we can serve communities at the end of a longer fibre line with a smaller piece of electronics. Fibre to the remote node is very important technology. We are also exploring wireless solutions, and we have actively trialled wireless solutions in various parts of the country, including Cornwall and the highlands. "
Posted by gerarda over 3 years ago
Reading Sean Williams evasions to the PAC it appears to me that this is because a) they still have no solution for long lines so cannot demonstrate how they will fulfil the 2mb obligation and b) do not want their premises passed myth blown at this stage
Posted by andrew (Favicon staff member) over 3 years ago
Actually have done some checking on premises served by fibre twin cabinets and do not see any major issues with the Openreach millions claimed
Posted by gerarda over 3 years ago
@Andrew here's one example in BT/Ofcom's claimed NGA stats
http://www.eadt.co.uk/news/haughley_green_councillor_rachel_eburne_hopeful_of_progress_over_broadband_speeds_1_2352301
and one this we are not even looking at whether its 24mb or not but where there is little or no ADSL service at all
Posted by andrew (Favicon staff member) over 3 years ago
Ah so not disputing the passed figures, but the proportion of premises that qualify as super fast. Two different things and much arguing over the accepted profile to use for distance versus speed.

Answer is it varies from area to area and no template fits all areas
Posted by gerarda over 3 years ago
they are two different things as much a BT like the Government to believe they are not
Posted by WWWombat over 3 years ago
The UK government knows to treat them as two separate things, and can be seen to take great care doing so during Westminster debates. The local council here does too.
Posted by gerarda over 3 years ago
Can you produce anywhere where they show a breakdown of the premises passed between those getting a SFBB and those not? I have never seen one. The BDUK produce a stat of the former but it does not show the latter
Posted by andrew (Favicon staff member) over 3 years ago
Yes but it would come with numerous proviso's and uncertainties
Posted by ValueforMoney over 3 years ago
Thanks to the North Yorkshire reports at least they have confirmed they are payin £176 per premise past subsidy with an average of 268 premises per cab.
This average subsidy of £47k, with no reference to future proofing costs (FoD) or excess build costs where new open access conditions would apply is for the record more than three times higher for the same subsidies compoents in Fermanagh, Tyrone and South Armagh.
Posted by gerarda over 3 years ago
The better broadband for suffolk site does allow a drill down to 7 digit postcode - and shows how many areas shown as green (superfast) on the parish based overview become white(2mbmin) on the drill down.
Posted by andrew (Favicon staff member) over 3 years ago
@ValueForMoney - which North Yorks report says average of 268 prems per cab in the intervention area?
Posted by andrew (Favicon staff member) over 3 years ago
Have done some sums and come out at around 100 as average cab/premises size in NYNet project
Posted by WWWombat over 3 years ago
@gerarda

North Yorkshire does: In reports from SFNY/Nynet to the county council executive, see here:
http://democracy.northyorks.gov.uk/committees.aspx?commid=18

From there, you can get links to:
A report for the 29/10/13 meeting that breaks down the coverage figures for the phase 1 SFNY project.

A report for the 18/3/14 meeting breaks down the figures based on the new proposal.
Posted by WWWombat over 3 years ago
@VFM @andrew
VFM's numbers are semi-right, semi-wrong.

The 18/3/14 SFNY report to NYCC shows current phase 1 progress of 107k premises getting SF speeds from 399 cabinets, which is 268 premises per cabinet.

The target for phase 1 is 150k from 700 cabinets, which is 214 premises per cabinet.

That means the last 43k of phase 1 comes from 300 cabinets, which is 143 premises per cabinet.

None of these figures includes the properties which are too far to get SF speeds, but which are improved anyway: We don't know the total size of a cabinet.
...
Posted by WWWombat over 3 years ago
Using the phase 2 proposal, we see that the extra money will change the total to 161k with SF speeds, but we are told the total connected to fibre is 188k, leaving 6k unconnected to fibre in the IA.

That suggests that 86% (161/188) of lines on NY cabinets are within the threshold of SF speeds.

That, in turn, suggests that the 700 phase 1 cabinets average 250 lines each, of which 214 get SFBB speeds.

The extra 11k SFBB premises will perhaps take an extra 100 cabinets, reasonably assuming they're all smaller than the remaining phase 1 ones.
...
Posted by WWWombat over 3 years ago
That would suggest a phase 1+2 total of 800 cabinets, and an average of 235 premises per cabinet, where 201 premises get SFBB speeds.

Total phase 1 subsidy is £26.5m for 150k premises, after removal of the demand stimulation.

That averages £176 per premise. At 700 cabinets, it also averages at £38k per cabinet, not £47k.

All that makes no allowance for the possibilities of FTTRN; 5,000 extra premises probably means 100 or more of the new "cabinets", if it goes ahead.

Nor does it take account of any range improvement through vectoring.
Posted by gerarda over 3 years ago
@wwwombat - I meant national government not local. Most local councillors in BDUK areas are only too aware of BT's flexible definitions, whereas national government as demonstrated by Ofcom's stats and Ed Vaisey's regurgitation of BT figures are not
Posted by andrew (Favicon staff member) over 3 years ago
DCMS does quote a superfast coverage figure that takes into account speeds available to premises, when doing its regular updates.

http://www.thinkbroadband.com/news/6268-dcms-releases-latest-coverage-figures-for-super-fast-using-public-money.html

But am sure people will disagree with that. The figure looks reasonably accurate based on the checking I can do.
Posted by WWWombat over 3 years ago
@gerarda
Then you need to read the debates from Westminster. One between the various North Yorkshire MPs and Ed Vaizey himself was full (amongst lots of sweet-smelling, self-congratulatory stuff) of very clear reference to the SFBB thresholds, and the number of properties in total vs the number with SF speeds.

See this statement within the full debate: http://www.theyworkforyou.com/whall/?id=2014-01-08a.142.0#g148.1
Posted by WWWombat over 3 years ago
@VFM
That link I just posted for gerarda changes some of my numbers a little.

From that, phase 1 is 670 cabinets, not the 700 I mentioned. That makes the subsidy average £39,500.

Phase 1 is confirmed to pass 168k premises (with 150k at SF speeds).

Average cabinet size for phase 1 is 250, with 223 getting SFBB speeds. That means that 89% of lines per cabinet are within range for phase 1.

The remaining portion of phase 1 is 43k premises, but now over 271 cabinets. That makes for 180 premises per cab, with 160 getting SF speeds.
Posted by WWWombat over 3 years ago
@VFM
North Yorkshire is one of the largest and least-densely populated counties of England. It ends up being very comparable to the parts of NI that you mention.

At the smaller end of the scales, Ryedale district is comparable with Fermanagh in population and density, while the combination of Richmondshire, Craven and Hambleton matches with Tyrone.

The most-populated district of NY, Harrogate, matches fairly well with Armagh.

Between these two groups, population size-wise, North Yorkshire has an extra 2 districts that, combined, would match a second Armagh.
Posted by ValueforMoney over 3 years ago
@wwwwombat Thanks to get £47k average cost in a GEA rollout model mimicking BT's commercial rollout and adjusting for rural you need to quadruple the dig budget, double the power budget, double the cable run lengths and double up on commons costs, contingency and overhead allocations.
Posted by ValueforMoney over 3 years ago
@wwwwombat thanks - the subsidy even at £39k is way too high, and move to FTTndp may not change greatly the unit subsidy. Sean Williams BT was re-assuring PAC it would be circa NI of less than £15k +12.5%. So where how can you generate invoices to that level, as those exceptions ought to be evidenced in the reports.
Posted by WWWombat over 3 years ago
@VFM
Where are you taking those budget figures from?

I imagine that the numbers we see grow are because the land area grows. If it did that, but was still densely populated, then we'd see the number of cabinets rise, and the per-cabinet budget stay the same.

However, with a rise in land area, but a lowering of density, and a switch to the smaller, more remote locations, then I'd expect to see the cabinet size reduce but the cable-run length increase exponentially. I imagine the dig budget would increase too (in total)
Posted by gerarda over 3 years ago
@andrew but the BDUK ones do not show how many premises connected to the cabs do not get superfast

@wwwombat let us hope he remembers that but his press release of last month suggests he lapses back easily http://charneybassett.org.uk/wp-content/uploads/2014/03/2014.03.03-Vaizey-Press-release.pdf
Posted by TheEulerID over 3 years ago
The initial NI project is probably not typical. It was early and will have included a lot of locations that needed minimal or no gap funding. The BT contribution was proportionately much higher. The latest NI announcement budget of £24.5m is for 45k premises, so an expensive "tail".
Posted by ValueforMoney over 3 years ago
WWWwombat the NI data is DETI/BT 1265 cabs for £16m subsidy followed by DETI press release saying 60% of budget and 70% of cabs for outside Greater Belfast. This is supplemented by data from CACM and remote Austria.
Posted by TheEulerID over 3 years ago
@VFM
The NAO (who actually have access to the accounts), came up with a very different conclusion to the one you keep repeating. Apart from the issue that NI is probably not typical of BDUK projects (due to the limited commercial roll-out), they only apportion 36% of the total BDUK cost to cabinet enablement. They also have the English avg 12% above that for NI.
Is it credible that the NAO don't know the difference between a 12% and 200% increase?
Posted by ValueforMoney over 3 years ago
TheEulerID - 60% of £16m budget for 70% of the cabinets (1265) for areas outside Greater Belfast is hugely releveant and well documented in BT presentations and supplier case studies. The invoice data is also available to those with the appropriate authority to review it. The later number is BT imposing the BDUK deal rates which need to be reviewed given BT said (to BBC on Feb 27th) they were set to win one deal not a national programme.
Posted by TheEulerID over 3 years ago
@VFM
This is the NAO quote on this subject (fig 13)

"Applicability of the Northern Ireland average to the whole of England is uncertain. Specifically cost inflation, number of cabinets enabled as part of commercial roll-out and terrain factors will give rise to differences"
Posted by TheEulerID over 3 years ago
@VFM

So, if I'm to take the implication of the NAO statement, an unknown (to use) number of those NI cabinets you are counting were actually commercial roll-outs and not part of those gap funded. Without knowing that, you can't work out the numbers.
Posted by New_Londoner over 3 years ago
Interesting debate. The conclusion us that the data is not available to allow credible analysis and that the people in BDUK that do are better placed, and probably better qualified, to do this job.

So perhaps Mike can leave this to the professionals now, I'm sure that BDUK and the NAO will report any concerns in due course.
Posted by TheEulerID over 3 years ago
To be fair, the NAO report does raise some concerns, most particularly about operational costs. They make the point that if BT achieve operational savings, there is no benefit sharing. There's also a concern that BT included an unknown amount of cost contingency to cover the downside risk (albeit it's unclear how they'd realise it if they are only paid by invoice unless manpower or operational charges are exaggerated)
Posted by WWWombat over 3 years ago
The point that DCMS make is that BT can only claim what they actually spent... so obviously cannot claim any money from a budget labelled "contingency": they actually have to spend it on something chargeable.
Posted by WWWombat over 3 years ago
The PAC transcript says that NAO came up with an average of 12% over NI, but mentioned that there were broad ranges. Do we have a good description of the ranges, and which projects saw the extremes anywhere?

I'd imagine the NY is one of the extreme edges within England, alongside Cumbria and Northumberland.
Posted by ValueforMoney over 3 years ago
@EulerID & Co According to page 9 of the latest PAC effort BDUK have not looked at detailed cost data per cabinet and path. It will probably down to BT to fully reconcile ERDF claims in NI with Claims in North Yorks and Cornwall.
The 36% in Table for the cabinet is a little misleading. I look forwatd to their next effort.
Posted by ValueforMoney over 3 years ago
@EulerID North Yorks budget per premise is not the extreme.
If its an extreme then where are the published fibre paths where it is expected new access conditions will apply?
This is a once in a genertaion opportunity to perform such an upgrade. The preferance for confidentiality and mis-direction on costs and investment has been poor.
Posted by WWWombat over 3 years ago
@VFM
Page 9 of an online PAC report without page numbering makes no sense. There is no table, and no mention of 36%. Not sure what you are talking about.

Why would there have to be "published fibre paths where it is expected new access conditions will apply" to make North Yorkshire be considered an extreme?

Surely the things that make the extreme for an infrastructure rollout are all related to population density and clustering, type of landscape, etc?
Posted by WWWombat over 3 years ago
BTW, I disagree that this is a once-in-a-generation opportunity.

My belief is that this is only step 1 in that generational change, where the end result is indeed ubiquitous FTTP, and it is likely to take the best part of the next 20-30 to get there.

There's likely to be an intermediate step, with G.fast, before we get there. This isn't a given, but I suspect we'll get clues from the trials of FTTRN.
Posted by ValueforMoney over 3 years ago
@wwwwonbat sorry it page 9 paragraph 13 of the most recent PAC report.
New newtork segments over 1km where the state pays >70% have enhanced PIA so need to be published. It's in the state aid doc.
Extremes <20 premises per sqkm had the fail safe of the 4G coverage obligation which is written carefully enough to be used creatively.
Posted by ValueforMoney over 3 years ago
WWWwombat - once you decide to pay excessively for the power or you have the opportunity to present costs of say £47k, it becomes a barrier to expand again until the next cycle, which could be 15-20 years out.
Posted by Somerset over 3 years ago
In 15 years everything will be wireless? How many new houses have ethernet cabling installed and how long before we have a wireless connection from the pole or cabinet?
Posted by WWWombat over 3 years ago
@VFM
Sorry - my copy of the PAC report is online. There are no page numbers, but I can at least find para 13. There is still no table on the online report though, nor a reference to 36%.

I'm also still looking for the NAO ranges. Got a link?
Posted by WWWombat over 3 years ago
@VFM 2
What counts as a new network segment? Is it just new fibre? Or new duct and fibre within it? Or perhaps if a certain amount of work is performed to clear old ducts?

Incidentally, I can't find such detailed requirements in the EU state aid document, nor the BDUK wholesale access guidance; only vaguer restriction on who can request PIA access in the former, and seven year minimums in the latter.

Do you mean some other doc?
Posted by gerarda over 3 years ago
I notice from the PAC transcript that it is not just places in Suffolk that have been left in neither the commercial nor BDUK roll out after reneged on their promises. North Yorkshire is also suffering from that
Posted by ValueforMoney over 3 years ago
@Wwwwombat
page 9 para 13 on the PDF http://www.parliament.uk/business/committees/committees-a-z/commons-select/public-accounts-committee/news/rural-broadband-report-publication/
Network segment is 1km or £50k but detail not in ss33671 - will need to find EU references. May need formal query to EU to extract extra detail.
NAO report Table 11 P33 has refernce to 36% for cabinet.
Thnaks
Posted by ValueforMoney over 3 years ago
@Sommerset Wireless to a DP with a radio for the final bit would work, but I would argue the comparative cheapness to push on with FTTP using some of the rural programme budget presents many opportunities to calibrate costs for a more informed decision. The controversary over the subsidy levels for FTTC has many damaging side effects and lack of open dialogue on the question you pose is just one.
Posted by WWWombat over 3 years ago
@gearda
Do you have a Q# for that? I don't recall seeing a NY place mentioned in the transcript.

I have seen it happen for 3 cabs in Skipton, where the cost for power was £90k. SFNY was asking council for extra cash for those last year, but these weren't in the transcript
Posted by andrew (Favicon staff member) over 3 years ago
Perhaps the power firms need to send someone to PAC to explain the highly variable power costs
Posted by ValueforMoney over 3 years ago
@wwwwombat - £90k for three!, any controls you would not do it, you would keep pushing fibre further out to the DP and begin force a plan for full transition. Power costs is not secret so could and should be published.
Posted by WWWombat over 3 years ago
But you can't publish the power cost until you've got far enough in the surveying & planning process for that phase. You can't do it earlier, because it can change depending on siting. And it can still change, depending on other requests for supply.

Those 3 cabinets weren't very rural. Two were for the centre of Skipton, while one was for a large village just outside.

Good point on DP, except these are dense areas with lots of properties. Without reverse power, it would probably cost more.

Maybe @andrew is right.
Posted by gerarda over 3 years ago
@wwwombat - it was a Westminster debate on broadband not the PAC http://www.publications.parliament.uk/pa/cm201314/cmhansrd/cm140108/halltext/140108h0002.htm#14010847000188 in a question from Julian Smith
Posted by WWWombat over 3 years ago
Ta. I've seen that debate, but didn't latch on to that being a new place.

Cononley makes a 4th area within Skipton, this time limited because a viable site to locate the FTTC cab could not be found.

It seems that, after community intervention, a site has since been found, but it depends on a bridge over the railway to route the fibre over.
Posted by WWWombat over 3 years ago
I guess this is a problem caused by starting the subsidised rollout while the commercial rollout is still ongoing... and then not allowing the definition of the intervention area to be updated when changes are needed.

Thankfully it looks like the SEP will trigger those updates to the IA
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