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Councillor upset that £3.2m to be reinvested in faster broadband roll-out
Friday 13 November 2015 18:03:31 by Andrew Ferguson

While broadband more than ever is seen as the fourth utility and is becoming ever more crucial to the success of different parts of the UK economy not everyone sees broadband as critical to an areas success.

It seems there was a bit of a battle in Worcestershire about how the council would handle the return of some £3.2m million by BT as part of the clawback system, though this money has really only become available at this stage because the BT Group announced the clawback sum because it had adjusted its model based on the level of take-up it is starting to see (if take-up continues it is possible that further lump sums will appear). The clever part is that BT has not actually dumped the money randomly in any council bank accounts, but is saying 'we have rejigged our model which leaves £x million pounds spare, that under the contract would be paid back in a few years time, or we can roll that money now into the project and keep rolling out exceeding the contracted targets'.

The Labour opposition in Worcestershire attempted to block this re-investment and are keen to get the money returned to the council to help balance the books or spend on other council services (ISPreview spotted the original newspaper item first). Fortunately for those yet to benefit from broadband improvements in Worcestershire the move was defeated and while take-up of superfast services may be well behind that of exchange based ADSL/ADSL2+ services for business and people moving to the area access to faster broadband will be a key decision maker and if a council exploits the widespread availability of broadband there is lots of potential for reducing costs and redeploying staff.

"What really annoys me, and many others in this room is not getting our priorities right.

Since when has it been this chamber's priority to throw millions after millions at a private company?"

Councillor Peter McDonald, Labour group leader

The part that meant we covered this in more detail than just the classic claw back re-investment was a Peter McDonald saying that the spending on broadband is just to help those who "live out in the sticks with the badgers and rabbits".

Leaving these comments behind as the clear message we get from people is they care little about the politics they just want something faster to arrive yesterday, so that it will let me stream video, do online shopping easily and stop the kids from blaming their dodgy internet connection as for why their homework takes ages to do.

thinkbroadband calculation of Superfast, USC, USO and Fibre Broadband Coverage in Worcestershire
Data from 10th November 2015
Area % fibre based % superfast
24 Mbps or faster
% superfast
30 Mbps or faster
% cable % Openreach FTTP % Under 2 Mbps USC % Under 10 Mbps USO
Worcestershire County 90.4% 84.2% 82.9% 25.1% 0.03% 0.9% 8.6%
Bromsgrove 91.8% 85.1% 83.6% 21.5% 0.02% 0.7% 5.3%
Mid Worcestershire 90.1% 78.9% 76.1% 0.2% 0.01% 1.7% 11.5%
Redditch 92.8% 91.3% 91.3% 81.1% 0.07% 0.3% 4.7%
West Worcestershire 76.4% 67.1% 64.7% 0.2% 0.07% 1.5% 21.6%
Worcester 98.5% 94.3% 94.1% 1.2% 0% 0.4% 3.4%
Wyre Forest 92.3% 88.2% 87.4% 49.5% 0% 0.6% 5.3%

The official target for the phase 1 project is described as 90% coverage of high speed fibre broadband, which based on what is known about other contracts usually translates into coverage at 15 Mbps and faster and the indication is that the project is on schedule to hit that target and in six months if current delivery rates continue could be looking at 90% coverage at 24 Mbps or faster.

The phase two project that extends into 2017, is targeting 94% superfast coverage with 95% fibre based coverage, though if the current split of FTTC/P is carried on to hit 94% superfast would mean fibre based coverage approaching 99% or higher. The £3.2m that is being recycled should allow for around another 2 to 3% with access to superfast, or could be used to target a small number of premises but deliver FTTP to ensure that rural business is not left behind or tempted to cross county borders to a better served area, taking both business rates and jobs elsewhere.


Posted by Somerset 12 months ago
Like all the money they give to 'private' companies for street lights etc. that don't benefit people who don't go out at night...
Posted by generallee94 12 months ago
nice to see all this superfaste project going on from across the road where 2Mbps or Cable is the limit.... can't say its the worst situation to be in but amazed by the lack of interest in the area by BT... I won't mention the council they haven't got a pot to piss in never mind fibre investment!
Posted by jabrady10 11 months ago
I live in a village with no mobile coverage, no public transport and slow broadband. No option but to use BT as no one else offers a service. I chose to live here and I see no reason for the taxpayer to subsidise the delivery of faster broadband and that Councillor has a point!!
Posted by ValueforMoney 11 months ago
BT owe a capital contribution of £4.5m and there will signficant underspend as well.

@jabrady10 the idea is that good connectivity permits the transformation of public service delivery while helping to assist making communities more viable by permitting people to work from home, or to continue working. It is worth as much to the economy as it does to any one individual perspective.
Posted by Gadget 11 months ago
@vfm - is this £4.5m your personal view, or one that is endorsed by the project's accountants, especially the use of the word "owe"?
Posted by jabrady10 11 months ago
Valueformoney makes a good point about the value to the economy. The question is does fast broadband fall in the same category as mains water or electricity? The same goes for mobile phone coverage and public transport. Certainly property prices in the villages around here are much higher than in the City and it could be argued that the local community pays for the delivery of high speed broadband if they want it.
Posted by ValueforMoney 11 months ago
@Gadget that is my estimate based on the emerging data in the public domain.
@jabady10 - I believe if we understood how relatively cheap it is to fix, then there would be no debate.
Posted by themanstan 11 months ago

They owe a contribution of £4.5m a portion of which will be capital...
Posted by ValueforMoney 11 months ago
@themanstan I contend that at 60,000 premises passed the amount of capital BT is due to pay is between £3.9m and £4.5m.
This is in addition to the clawback on take up and the underspend is also separate.
Lower than modelled costs, higher take-up and a less rural profile are the drivers.
The £3.9m-£4.5m is part of the £356m referenced in NAO 1. Note Oxera refs a intervention rate of 73%.
Posted by BREWERDAVE 11 months ago
Have some sympathy with the Labour councillor.Most of the fat in Council budgets has gone and they are left with the much tougher decisions on road repairs, waste collection,street cleaning,street lighting now -so an injection of cash would help with immediate issues rather than the "jam tomorrow" approach of increasing investment in broadband/fibre infrastructure.
Posted by WWWombat 11 months ago
Laughing at the idea that BT's capex contribution is "owed" in any way towards the councils or the BDUK projects.

Capex, of course, is paid to the suppliers. Huawei, ECI, and the contractors performing the civils. It can also be accounted as the money paid to staff employed in deploying this capital investment.

It was always a bit funny to watch @VFM demand visibility of BT's capex, when it was explicitly the subject of the NDAs. Now the laugh has turned sad, when his perspective has changed to the money being owed.
Posted by WWWombat 11 months ago
This is a graph especially for you @VFM...

When Sky complained about splitting Openreach, one set of figures they relied on was shown in a graph that separated out the FTTx capex costs.

I've taken that graph, which includes figures "net of grant", and added in the grant for you.

BT's capital contribution, of course, comes in the grey blocks; the money flows out from BT to suppliers.

Base graph:

Adding subsequent "deferred" data:
Posted by chrysalis 9 months ago
The councillor does have a point, living in rural areas has its perks, and people in cities dont cry about not having nice fields to look at and peace and quiet, they get on with it. Also as much as I like broadband, a food bank is higher priority.
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