Rural Broadband Programme report published
Broadband debates are often now the most scintillating event and many conferences feature the same faces, but the House of Commons Committee of Public Accounts session in July 2013 was the exception. BT and the BDUK itself got a firm talking to and while the meeting lasted nearly four hours there was still lots of discussion needed. Now we have the copy of the Twenty-fourth Report for 2013-2014 from the Committee entitled The rural broadband programme, which should be on the must read list for all those campaigning for better broadband, politicians and those working in the industry.
Update 8:45am For those that want to read the report themselves, it is available online now and includes transcripts from the streamed committee session.
Several recommendations are made in the report, whether the Government pays heed is of course another matter:
- The Department (DCMS) should not spend any of the further £250 million of public money until it has developed approaches to secure proper competition and value for money for improving superfast broadband after 2015.
- The Department's (DCMS) assumptions in its 2011 business case about the respective capital contributions of the public and private sectors were widely inaccurate. Before contracts are awarded for additional broadband coverage from 2015, using the additional £250 million, the Department should improve its modelling work, and when negotiating levels of private sector investment, the Department should push for contributions that take account of the long-term value of the assets to the supplier.
- The Department should insist on a higher standard of cost transparency before contracting. Where contracts are not yet signed for the current Programme, the Department should secure BT's agreement to improve cost transparency, for example by omitting the non-disclosure agreement between local authorities.
- The Department should set out how it has assured itself that local authorities will be adequately resourced and supported to carry out adequate checks on BT's costs and take-up rates during the project.
- Overall, BT is supposed to deliver at least 90% coverage in rural areas but the Department did not secure sufficient transparency from BT about precisely where it intends to roll out superfast broadband within each area. The Department should, as a matter of urgency, publish BT's detailed roll-out plans so that other suppliers can get on with trying to reach the remaining 10% of the population that will still be without superfast broadband.
- As part of its current review of the broadband market, Ofcom should explicitly address the impacts on competition of BT's wholesale pricing structure and of the terms and conditions attached to accessing BT's infrastructure. (tbb Note: It is believed this is referring to PIA (duct and pole access rather than VULA, i.e. GEA-FTTC/P products)
With the main BDUK roll-out very much underway, there is little that can be changed without introducing delays, but reading the full report from the Public Accounts Committee there are various assumptions and misconceptions that have very much now entered into the area of because it was said at a Committee it must be 100% true. Some examples are:
- Overall, BT is supposed to deliver at least 90% coverage in rural areas: This is not what the BDUK project was meant to achieve, some believe the goal was 100% coverage at superfast broadband speeds, but research indicates that apart from one document where you can see how some people have interpreted what was meant to be a description of the Universal Service Commitment has been taken to refer to speeds significantly faster. The BDUK project was often called the final third project earlier in its life, reflecting its aim of building out from the mainly urban commercial roll-out (which sits at 73% currently) to making superfast available to 90% of the UK and 2 Mbps as a baseline to everyone else.
- The Department forecasts that it will complete the Programme in March 2017, 22 months later than originally planned. is quoted several times and is largely based on the National Audit Office report and the latest DCMS estimates say 95% by 2017. The 90% target is likely to be late by 12 months, not 22 and the 95% target cannot be late as no money has been allocated to meeting it yet.
- The report title is misleading, The rural broadband programme, particularly with the 90% target for superfast broadband. Ofcom states that 14% of the UK population is rural, 51% are semi-urban and the remainder urban. Generally the BDUK roll-outs to date have helped the semi-urban population on the edges of towns and there are several cities accessing the fund. A clear definition of what is rural/urban we would have thought key to understanding the costs involved.
- The lack of mapping data from BT and the councils. There is an increasing amount of mapping information from the projects and if you take time to look at the dates these appear generally it is a few months after the contract was signed, i.e. one BT has actually started working with the local authority. Potentially the BDUK could force BT to publish its own model for a county at the time of contract signing, but this removes flexibility and with unknowns like ability to get planning permission for a location for a chamber/cabinet and the cost of power supplies. One side to this are that it allows BT flexibility so that if one cluster of homes is very expensive to at the full planning stage to prioritise spending elsewhere where it can serve more households and businesses. The flip side is that it can allow BT to adjust its plans to react to previously unannounced roll-outs and act as a vampire death squid (to borrow an illustration from the committee meeting).
- The report glosses over the varying targets across the UK, some counties signing contracts covering work till 2017 and 100% superfast coverage already, and others going for greater than 90% and some aiming at below than 90%. To the extent that someone using just that report to assess the UK broadband picture could be misled.
At the end of the day the Government announced the amount of money it wanted to spend for a target and the risk appears to be on BT to meet that target. The experience from Digital Region has made the Government and Councils very risk averse and other projects where subsidies have been provided to bring service to an area for an operator to withdraw once funding runs dry. The most overlooked aspect of the BDUK process, is that the money is £230m of surplus from the Digital Switchover Fund and £300m from the TV licence fee, with the money for 2015 onwards also coming from the licence fee.
The example may be extreme, but essentially what we have is a triage system working to try and deliver a target and there appears to be no extra resources on the way, so its try and spread out what is available to cover the widest possible area.
In a traditional situation the Government would have waited for the commercial roll-outs to complete and get a better idea of what take-up levels were, but the rapid growth in the digital marketplace meant the pressure was on to do something sooner rather than later, and it could be said that the decade of lobbying by campaigners finally got through to the politicians, but not with the result that pleases everyone.
There are various high profile what-ifs raised by the report, e.g. £150m of lost investment in North Yorkshire from UK Broadband, and Fujitsu saying they might invest £1.5 billion. The problem here is that the Fujitsu bid relied on a much larger project size, apparently requiring around four counties to get the volume required and the mixture of technologies was unclear (supposedly FTTH to 80% coverage - and other technologies beyond there) and with the UK Broadband bid for most people this committee meeting will be the first time they have heard of them. UK Broadband is behind the 4G LTE fixed wireless network in Swindon, which based on complaints about broadband in the area may not be available on the large new build estates.
Sitting in the middle as we do, we can see on one hand those wanting the best technical solution no matter what price or effort is required and the majority of the public who just want to know when they can order off their existing supplier. Perhaps we should ask how much the report has cost to create, and what are the cost implications for the changes they request.
For all the problems there are with BT, it is clear that some County Council's are able to do things differently, e.g. the use of fixed wireless in parts of Lincolnshire, some have used satellite broadband for the areas they are likely to reach last with their project and the widely varying levels of information from them. The 21st century rally cry is really 'we want our broadband and we want it now'.