Broadband News

Government rejects House of Lords USO amendments

The Universal Service Obligation which has not made its passage onto the Law books yet has had another airing in the House of Commons today with the debate covering amendments requested by the House of Lords a few weeks ago.

The debate on the USO was part of the wider Digital Economy Bill and while ten days ago one would have being moaning about the length of time the bill is taking to make it onto the statute books with a General Election now just weeks away the Digital Economy Bill is one of those rushing their way through before Parliament ceases. If the Bill does make it onto the statute law books if there is a new Party in charge they may want to revisit the bill or if the Conservatives are returned with a new mandate there may be changes they wish to make to elements of the bill since if they have a larger majority getting controversial elements passed becomes easier.

"Lords amendment 1 challenges the Government to be more ambitious on universal digital connectivity. The universal service obligation forms part of our plan to deliver better connectivity, helping to ensure that everyone gets decent broadband and no one is left behind. However, we have serious concerns about whether the amendment is deliverable. As drafted, it is counterproductive to the implementation of a USO, because of the risk of legal challenge and the delay that that would cause. We are legislating for the USO under the EU telecoms legislative framework, under which a USO is intended to ensure a baseline of services where a substantial majority has taken up the service but the market has not delivered, and where users are at risk of social exclusion.

According to Ofcom’s latest data, in 2016, take-up of ultrafast broadband with a download speed of 300 megabits per second and higher was less than 0.1%, so we are nowhere near being able to demonstrate that the majority of the population have access to full fibre with a download speed of 2 gigabits per second. We therefore cannot accept Lords amendment 1, and we are not in a position of a substantial majority having taken up superfast broadband. I do, however, support the ambition of better, faster, more reliable broadband, so the Government propose an amendment in lieu that requires any broadband USO to set a download speed of at least 10 megabits per second, and requires the Government to direct Ofcom to review the minimum download speed in the broadband USO once superfast take-up is 75%. That gives the assurance that any USO speed will be reconsidered once a substantial majority of subscribers are on superfast."

Matt Hancock Minister of State for Digital and Culture at the Department for Culture, Media and Sport as recorded by Hansard on 26th April 2017

The 2 Gbps USO requirement was always an amendment too far, and perhaps was more a case of those lobbying Lords and wanting the USO to mandate that the UK utilise full fibre (FTTP) and no other technology in delivering the USO. So to see Matt Hancock reject the 2 Gbps is no surprise. The debate about how the escalator will work and a 30 Mbps baseline for the initial USO has been rejected, with the original 10 Mbps holding. The amendments the Government is proposing to insert instead are:

Page 1, line 12, at end insert 2, but may not do so unless—
  • (a) it specifies the minimum download speed that must be provided by those connections and services, and
  • (b) the speed so specified is at least 10 megabits per second."
Page 2, line 23, at end insert— “72B Broadband download speeds: duty to give direction under section 72A
  1. The Secretary of State must give OFCOM a direction under section 72A if—
    • (a) the universal service order specifies a minimum download speed for broadband connections and services and the speed so specified is less than 30 megabits per second, and
    • (b) it appears to the Secretary of State, on the basis of information published by OFCOM, that broadband connections or services that provide a minimum download speed of at least 30 megabits per second are subscribed to for use in at least 75% of premises in the United Kingdom.
  2. The direction—
    • (a) must require OFCOM to review and report to the Secretary of State on whether it would be appropriate for the universal service order to specify a higher minimum download speed, and
    • (b) may also require OFCOM to review and report to the Secretary of State on any other matter falling within section 72A(1).”
Amendments Digital Economy Bill on USO proposed by Government

So if the USO does turn out to be a 10 Mbps minimum with an escalation to 30 Mbps once superfast take-up reaches 75% or higher when will that be? Well superfast take-up at end of 2015 was reported at 50% by Ofcom and 54% at the end of 2016, which is inline with the relevant figures from providers financial reports, and that means an estimate of 59% based on observations from March 2017 speed test results is within the ballpark. If (and it is a big if) demand for superfast continues to grow at the same pace as indicated by the last full quarters financial results we are looking at a growth of 2.4 million premises or around 8 percent points a year. Therefore the trigger may fire in 2021, but 2022 looks more likely. Of course take-up may level off, or it might increase, forecasting demand is a difficult business, changes such as Ofcom slashing the price of the GEA-FTTC 40/10 service might boost demand, but that change is not certain and the full saving may not make it to the retail market.

Members of Parliament did respond to Matt Hancock questioning the level of ambition especially when there is a greater ambition to deliver full fibre, but as we mentioned back in 2016 there was always a risk with all the talk of full fibre that until one actually sees delivery it is all just political rhetoric. Our earlier paragraph on take-up hopefully does illustrate once MP who may have sourced some wrong figures in their response.

"Let us look at what will happen with the Government’s offer here and at the trigger mechanism of a 75% subscription rate. In 2016, only 31% of people were getting 30 megabits; in 2015, it was only 27%. How long is a constituent in England, Wales or Northern Ireland going to have to wait before the USO catches up and gets to 75%? The USO could be either a really ambitious measure to close the digital divide or simply a safety net, and it is quite clearly the latter, which is fine—as long as it is clearly articulated as such—because other things can be done."

Extract of Calum Kerr (Berwickshire, Roxburgh and Selkirk) (SNP) talking in Digital Economy Debate

Correction 10am 27th April Due to a human error and missing the section title in the Ofcom Connected Nation Report the author was reading take-up of over 10 Mbps broadband, rather than 30 Mbps and higher, we apologise for any confusion. Ofcom Connected Nation report does state 31% for 2016 and 27% for 2015. Which if correct and take-up remains linear at 4 percentage points per year would mean 75% reached in 2028! 31% take-up at the end of 2016 seems low, when there were 7.2 Openreach GEA live services and 4.8 million Virgin Media cable and another probably 300,000 with other superfast (mostly ultrafast too) services. Applying a 5% allowance on the GEA numbers to remove those not likely to be superfast you get a total of 11.9 million superfast premises, which is 42% of 28 million UK premises, or you could say 44% of the 92% of UK premises currently with access to a superfast broadband option. Another way of expressing the figure is that Ofcom reports broadband take-up is running at 78% of UK premises, which is around 22 million and thus superfast take-up is running at 54% (this last figure is the closest to what we observe in terms of take-up of superfast services in our speed test round-ups). Ofcom elsewhere in the Connected Nations 2016 report (page 5) does indicate that its figure for the number of superfast was 9 million, which is substantially different to the 12 million indicated by financial reports by the operators at the end of 2016, what we don't know exactly is what date the nine million applies to. Nine million take-up and the 31% figure gives a UK premises total of 29 million and thus if no changes to the way Ofcom reports take-up means effectively everyone who has broadband now would have to upgrade to superfast broadband, and given the performance issues around VDSL2 unless broadband take-up increases significantly 75% superfast take-up is almost impossible.

The bit that no-one wants to talk about is who and what technology will actually deliver the Universal Service Obligation, and at what price point for delivery will who ever is charged with the USO be able to opt out of using a gold standard service but deliver it using just satellite broadband. Long Reach VDSL is touted as a solution and if ADSL/ADSL2+ frequencies can be recovered with additional infill cabinets this is a possibility, but that seems to presume Openreach taking the USO mantle and they might be very busy concentrating on duct and pole access for millions of premises getting full fibre rolled out to them by numerous other operators once we are into 2019 and onwards.

Comments

You say that Ofcom reported superfast takeup at 50% in 2015 and 54% in 2016: Are you reading their dashboard page in the CN report?

If so, Ofcom report those takeup figures in the "10Mbps+" section.

They only give superfast a takeup of 27% and 31%. Matching Calum Kerr's comment ... which do make sense.

Reason? Ofcom are measuring takeup across all premises in the UK, of which only 78% take broadband at all.
...

  • WWWombat
  • 6 months ago

TBB numbers normally involve market share, where NGA was ~50% at the end of last year (7.2m FTTC, 4.9m cable, out of ~24-25m broadband customers incl both residential and business)

Calum Kerr makes a valid point. If only 78% of all premises have broadband in any form, it is going to take a long while before 75% of all premises have swapped to superfast.

Perhaps the government need to target a 75% market share instead. That would be just 59% of all premises.
...

  • WWWombat
  • 6 months ago

If NGA is at 50% market share now, and needs to get to 75%, then it'll take 4-5 years. NGA growth is roughly 0.45m per quarter (VM+BT), and it needs another 6-7m lines.

  • WWWombat
  • 6 months ago

My worry is if satellite is viewed as an option.
This was the solution here (until fttc gave me 4mb) even though I live in a village. Whilst it might be viewed as an option for remote single or small clusters of houses, when you live a scant 3.5miles from the exchange just a few hundred yards from where the fibre runs it might still be seen as an easy option.

  • burble
  • 6 months ago

Doh! echo's around the world

  • andrew
  • thinkbroadband staff
  • 6 months ago

Have added a correction notice and re-done the figures.

The Ofcom figures still look odd, but if we don't know exactly when the date they use to arrive at their 9 million is.

  • andrew
  • thinkbroadband staff
  • 6 months ago

I sort of think rejecting 30mbps for now was the right call. This forces OR to focus on those areas with slowest speeds. In most urban cases this will mean FTTP or network rearrangement, which will provide much more than 10mbps. 30Mbps would have meant even longer waits for EO upgrades as it would have moved their focus to lower hanging fruits.

  • hvis42
  • 6 months ago

Looking at the urban situation, there are a growing number of EO lines in city centres where FTTP appears to be planned. So the sub 10 Mbps in cities may dip a lot before 2020.

Though with recent price proposals from Ofcom those people with FTTP may be complaining it costs more compared to 40/10 VDSL2.

  • andrew
  • thinkbroadband staff
  • 6 months ago

Your calculations assume that the USO standard will only be increased when the 75% threshold is reached. However, the draft establishes a minimum requirement. There is nothing to stop a future government raising the USO standard before the threshold is reached. It is simply a matter of public/political choice, especially with respect to how the costs of meeting the standard are to be recovered.

  • gah789
  • 6 months ago

Mandating a USO without having worked out how it will be financed and implemented is just gesture politics. The heart of the problem is that most people think a minimum standard is a great idea but equally many opt for the lowest broadband prices, which means not paying a levy to fund the USO. The days of a monopoly infrastructure operator which can spread the costs over all users are gone. As the number of fixed lines falls (which is inevitable) the costs of maintaining the telephony USO will increasingly distort the market. There is no neat or universally acceptable solution.

  • gah789
  • 6 months ago

Of course we are making the assumption the 75% target will be used, and at top of article we did mention how things might change due to General Election.

If current Government wants to trigger things earlier why have a 75% requirement instead of a 60% one or some other figure?

  • andrew
  • thinkbroadband staff
  • 6 months ago

@gah
The original point of this part of the legislation was meant to /merely/ enable the government to mandate a broadband USO of some form - they don't currently have that right.

It was never meant to even set the value of the USO. An aim that the Lords managed to screw up.

In parallel, Ofcom are doing the heavy lifting on figuring out the finance and implementation details.

Looking at this bill in isolation is just gesture critique.

  • WWWombat
  • 6 months ago

@gah 2
Good point on the threshold. However, once the 75% is enacted, you just know it will become the focus.

IMO, it is a good standard to set if it works on market share; much better than a 90% figure. If it works on "all premises" then it is a terrible, meaningless figure.

  • WWWombat
  • 6 months ago

@andrew
Thanks for the updates. I think it gives a really good flavour for how badly Ofcom's statistics are presented to us currently, and how hard it might be to pin a government down on the 75% figure in the future.

  • WWWombat
  • 6 months ago

@hvis
I think you've made the right call there.

Matt Hancock has already shown that he's taken his eye off the rural ball, and is playing to the "pro-competition" urban crowds again.

  • WWWombat
  • 6 months ago

The Ofcom stats are always a confusing game but as they are 'official' it is seen that I need to fix my figures to line up with theirs too often.

  • andrew
  • thinkbroadband staff
  • 6 months ago

@www Yes agreed Matt Hancock is not helping rural locations, maybe try Louise Haigh for help, see https://www.fginsight.com/blogs/my-blog-farmers-guardian/opinion-louise-haigh-mp-shadow-minister-for-the-digital-economy

  • godsell4
  • 6 months ago

@Andrew
I wonder if this will trigger the govt to accept the proposal by BT a while back (last year?) to use long-reach VDSL and other tech to increase availability of 10Mbps+ services to around 99% of premises at no cost to the government?

I notice that the wording still appears to shy away from spelling out the USO is likely to be a "right to request" a service, may require the requester to contribute towards the cost of providing it. Odd that politicians seem to gloss over that bit!

  • New_Londoner
  • 6 months ago

The base line price figure above which people may be asked to contribute is likely to be part of the secondary legislation, rather than committed in stone in the primary law.

  • andrew
  • thinkbroadband staff
  • 6 months ago

Judging by today's Hansard, the Lords accepted all the Commons' changes. Including the 75% figure unclarified.

  • WWWombat
  • 6 months ago

The standard must be 30mbps.

User contributions are unacceptable: BTOR is a state monopoly by any sensible definition thus its provision of broadband services should be at the same cost for all. Charging some is iniquitous.

None of which addresses BTOR's refusal to upgrade EO lines from ADSL2+ so these customers must suffer low speeds and frequent outages forever.

  • Dodman
  • 6 months ago

@Dodman
Who would pay the cost for the "provision of broadband services [to be] the same cost for all"? Remember cross-subsidy is not possible in a market economy.

AFAIK increasing numbers of EO lines are being upgraded to fibre in both urban and rural areas.

  • New_Londoner
  • 6 months ago

As per New_Londoner comment, the 10Mbps is out of date, the huge capital deferrals owed o Government suggests a more meaningful policy would be to establish a right to order a direct fibre connection based on a 'reasonable' request.
Defining 'reasonable' is worth discussing given the level of subsidy.
The difficulty with the 10Mbps and indeed the 2Mbps before it, is that it implies a 'copper fix. The copper fix as we are leaning is take fibre further and ultimately replace it.

  • ValueforMoney
  • 6 months ago

Did not Ofcom cost a full superfast cost for USO at ~£2bn, which sounds a lot more than the deferral amounts available (ignoring all the contractual issues around clawback).

One presumes this was a mixture of tech, so a full fibre USO is likely to go even higher in cost.

Yes full fibre on request and at standard prices for public would be great, but maybe other priorities exist for spending public funds now.

  • andrew
  • thinkbroadband staff
  • 6 months ago

The Analysis Mason work for Ofcom barely referenced the BDUK progress and monies left over, so the costings do not look well informed with 'stylised costs'.

Unlike more enduring problems, Broadband is actually fixable. You have not really reported it but Annex 8 of WLA confirms BT investment is £1bn off the £2.5bn. It reinforces how relatively cheap overlaying fibre is.

  • ValueforMoney
  • 6 months ago

So tell us all how much money is the deferral fund?

As for the commercial spending, lots of city centre FTTP showing as on the way if care to look.

  • andrew
  • thinkbroadband staff
  • 6 months ago

As of dec it was £325m, to which you add the underspends, the capital balances and c£600m yet to be spent.

It would be good to report on the Town Centre builds.

  • ValueforMoney
  • 6 months ago

So of the £1.7 billion commonly referred to for the BDUK process, there is £325m of deferral, plus underspend, plus capital balances and £600m left to spend?

So perhaps better to ask what has been spent since it looks like almost nothing if your extrapolations are correct.

  • andrew
  • thinkbroadband staff
  • 6 months ago

The BT state aid receipts to Dec were c£922m of the £1.7bn available to be contracted. £325m deferral sits in BT's accounts for phase 3,4,5,- £129m is a subset of this.

If BT's capital contribution could be accounted for then in theory Phase 1, as it should be, (lower than portrayed costs, higher take-up) should based on the gap funding principle be fully paid by BT. Phase 1 was 1 third fully urban anyway.
So your question is valid, if you put it alongside the question of what the ambition should now be?

  • ValueforMoney
  • 6 months ago

I tried to see but wasn't sure where to look what are the next steps in order for the USO to be implemented?

  • bluemoon87
  • 6 months ago

@VFM - do you have links for all the figures and calculations? eg. page in BT accounts etc.

  • Somerset
  • 6 months ago

Once law exists, steps to implementation I believe for now head over the Ofcom and various back and forth consultations and discussions with industry.

  • andrew
  • thinkbroadband staff
  • 6 months ago

I wonder how many people are in a position like me, where being on a market A exchange
have no access to all the offers that are available. Just under £40 for 3mbps internet.
The line is rated on the checker to be capable of 11mbps. So is that considered meeting the criteria of the USO? and if not, how much more will it cost (us) to improve it as there is nothing actually physically wrong with it apart from it being ali instead of copper.
Its not that we don't want to pay more for an improved service, its the fact that we already are paying for it.

  • Necroscope445
  • 6 months ago

No one can truthfully answer the costs to consumer for USO services, since none are available via scheme yet.

On your line what is the downstream attenuation?

  • andrew
  • thinkbroadband staff
  • 6 months ago

@Somerset Yes, numerous organisations will be submitting these to WLA consultation.
Do you need a specific, the £922m- you need to examine the notes in the capital section for each quarter.
You must support the opportunity.

  • ValueforMoney
  • 6 months ago

@Necroscope445 - which county are you. BDUK have funded c28,000 cabs so far, and another 7,500 are due. I think some 300k of rural FTTP (includes Cornwall)with more planned.
There is still a lot of money in place and owed to do more work. Using these monies and the clauses on FoD points to the need for the notion of 'reasonable demand' for fibre access to be established within some legal framework.

  • ValueforMoney
  • 6 months ago

@ValueForMoney I think Somerset was looking for a link so they can read and confirm your interpretation.

  • andrew
  • thinkbroadband staff
  • 6 months ago

As for doing more, surely that is why politicians are saying superfast is likely to reach 96 to 97% by 2020, i.e. they know that projects keep recycling the clawback and savings. Something you seem to be campaigning saying it needs to happen, when it already is.

  • andrew
  • thinkbroadband staff
  • 6 months ago

I agree, the clawback/deferrals are already spoken for. Though @VFM seems to be advocating that the money be spent inefficiently (via a "right to order") rather than the area rollouts currently being envisaged for the clawback money.

The "missing" capital spend is pixie dust. BT spent it; it ain't missing.

And the BDUK rollout will never have a preference for fixed-fibre; it will stay cheapest value. Why? Just like the USO approval in the commons, BDUK is a catch-up, addressing market failure. It doesn't have approval to lead the market.

There is no "opportunity" to support.

  • WWWombat
  • 6 months ago

@ValueforMoney
North Norfolk is my residency, ironically have only just been able to get back on line due to line CRC erroring
@ Andrew DLA is 34.1

  • Necroscope445
  • 6 months ago

I was being rhetorical on the cost, just pointing out that many people will fall between the cracks especially in rural locales.

  • Necroscope445
  • 6 months ago

34dB downstream attenuation supports the idea that 11 Mbps is feasible, would need to see the full set of downstream connection speed, attenuation and noise margin figures (plus upstream).

Have you tested at the test socket, i.e. so that all extensions are disabled in the property?

  • andrew
  • thinkbroadband staff
  • 6 months ago

I think a summer tour is needed of all those countries that have perfect broadband to double check their rural areas are all so much better than the UK. Time to GoFundMe some flights and hotels maybe.

  • andrew
  • thinkbroadband staff
  • 6 months ago

@ Andrew
Downstream Upstream
TCM(Trellis Coded Modulation)
On
On
SNR Margin
6.9 dB
6.2 dB
Line Attenuation
34.1 dB
16.5 dB
Path Mode
Interleaved
Interleaved
Interleave Depth
157
19
Data Rate
3677 kbps
893 kbps
MAX Rate
5316 kbps
1085 kbps
POWER
-3.5 dbm
0.4 dbm
INP
2.3 symbols
2.5 symbols
CRC
0

  • Necroscope445
  • 6 months ago

http://thinkbroadband.com/speedtest/results.html?id=149393661524158217767

  • Necroscope445
  • 6 months ago

All tests done in test socket, wired connection only.

  • Necroscope445
  • 6 months ago

This is a FTTC connection btw adsl(max, 20cn exchange)
nets 2mbps down and 0.3 up.

  • Necroscope445
  • 6 months ago

@Wombat, we are only beginning to see how the first £130m of the £325m is being contracted. The rest is tied down and rests in BT's accounts.
According to Openreach Charter this first £130m takes coverage to 96%.
Apart from the mis-information to the Parliamentary Select Committees from BT, there is no independent audit of BT's capital contribution. This is to come, hopefully. Mr Hancock according to WPQ 47312 says DCMS has no record BT Capital.

  • ValueforMoney
  • 6 months ago

Necroscope445 - There are at least 247 subsidised cabinets across 14 Norfolk exchanges where no subsidy was needed. There are a further 25 in-fill cabinets including 10 in Norwich. All this needs recovering and more work planned. This is reliant on the gap funding principle being applied.

Richard Bacon is on PAC so this evidence is available to PAC should they choose to use the NAO to confirm BT's capital.PAC activity has paid dividends in the costs but no work has occurred on the capital.

If Norfolk CC have difficulty on this matter, the state aid measure allows them to complain to Ofcom.

  • ValueforMoney
  • 6 months ago

@VFM 1
You continue to believe a fiction - that auditing BT's capital costs will make capital come flooding out of BT to fund more coverage.

An audit can only hope to trigger that if BT have been committing fraud, but doing it badly enough to be caught by the audit. An audit might find mistakes, sure, but to get the kind of result you want, the amount of money will have needed systematic fraud.

If that happens, I see a different outcome. I'd expect all rollout to halt, all BDUK money to be sucked back into government, and BT gives up on further coverage until the scandal clears in 3-4 years.

  • WWWombat
  • 6 months ago

@vfm 2
Re: WPQ 47312
I'll add a reminder that every £ clawback being deferred by BT means an extra £ being invested by BT, on top of their original commitment. As the original £ met the "capital investment" rules, the extra £ must classify as extra capital investment.

If BT originally committed to invest £348m in the BDUK programme, as in the WPQ, then they could have upped that to £673m.

  • WWWombat
  • 6 months ago

@vfm 3
We are indeed at the start of the deferred money PR - in public - but you should expect it to *all* be included in private discussions.

There is only one way to spend the money for any one LA efficiently - in one project. One plan. Not 27 micro-plans, each spending 34.5p.

Right now, where the money sits is not the biggest issue. The biggest issue is whether someone is making the plans to spend it, and whether those plans will be ready when the current BDUK workload (in that LA or wider) runs dry.

Remember - it is in BT's interest to have the money spent. Not idle.

  • WWWombat
  • 6 months ago

@vfm 4
The Openreach charter merely aspires to going beyond the 95% level. Where it gets to is fluid. Shall we figure out how high it could reach?

If subsidies are around £1,000 per property (which matches current projects) the £130m can reach an extra 0.4%, while £325m can reach just over 1%.

If subsidies reach the limit of £1,700, the £325m can only fund 0.65%

Getting to 96% is going to take more than the current £130m. Getting to 97% is going to take more than the £325m.

  • WWWombat
  • 6 months ago

Followup to @vfm 3
It is important to think how that deferred money, sitting in a BT bank account, can help the group.

In the accounts?
It has been deferred in the accounts, so it no longer adds to the cashflow, or appears in any useful light. The money is there, but unusable.

In cash terms?
It might be gaining interest, but that'll become repayable too.

In investment terms?
It is most useful to BT if it can be leveraged to trigger more deployment spending back inside BT. The "early clawback" offer incentivises this.

In what way do you think BT gains from the money sitting idle?

  • WWWombat
  • 6 months ago

@necro
There are certainly FTTC lines on MDWS where the attenuation is similar, but speeds are higher - 10-15Mbps.

If you have a problem to investigate, probably better done on the forums though.

  • WWWombat
  • 6 months ago

WWWombat - The capital can be disputed because it is not visible. It may be sitting in LA investment accounts, but none have been reported. If BT invested £673m - you suggesting BT will have paid c£26k per cabinet. Impossible given the state aid receipts.

Counties may not have been able to plan and contract because of the gaming of costs and capital, so monies will be resting and used for non-network purposes.

The lack of a plan or even a discussion on far these monies can go is pretty poor given the papers being published on the USO.

  • ValueforMoney
  • 6 months ago

What do you mean by "LA investment accounts"? Accounts owned/run by BT as client accounts? Accounts owned/run by the LA?

BT's capital investment will be sitting in someone else's accounts, for sure. But that will be Huawei, ECI and whatever civil engineer contractors they use. And possibly Corning, Emtelle, Prysmian etc.

BT's share of the investment never flows to the LA. That money doesn't sit in an account held by the LA. Or an account held by BT on behalf of the LA.

If BT's capital investment were visible, what path would you expect it to have taken?

  • WWWombat
  • 6 months ago

OXera refers to an investment account, you need somewhere to reconcile and true up, as most phase 1 and 2 were such that the subsidies could pay for what was planned, once the audit functions got on top of the reference costs.

If BT investment was visible you would expect it to be referenced alongside the state aid receipts. You would also expect BDUK to confirm payment of BT's share of permitted costs in their project data.
Clawback (Capital Deferral) might now be 100% of added revenue if no capital was paid or some withheld, that is another way of paying what is owed.

  • ValueforMoney
  • 6 months ago

"Somewhere to reconcile" == A piece of paper. A spreadsheet.

The true-up process just checks that the right amount of money went where it should have done, but it doesn't need to move any money to make that happen.

I only see Oxera mention a reivestment fund. That's in their EC evaluation.

So, while you say you expect BT's investment to be "referenced", you don't say where you expect the actual money to flow.

How about these pictures?
...

  • WWWombat
  • 6 months ago

(Orange = money that hasn't moved, Pink = BT capital spend, Yellow = BT deferral of LA money)

Without deferral: https://postimg.org/image/hlhtfydx7/
With deferral: https://postimg.org/image/413uvnx33/

Same amount of LA money flowing. More BT investment flowing (pink) with deferral.
None of the pink money goes near an LA account, to be "seen" by anyone.

Yellow flow is money put into the "reinvestment fund" held by BT.

You seem to think that there's a magic account somewhere, where BT's capital money will suddenly appear, just a few years late. There isn't.

  • WWWombat
  • 6 months ago

Note that Carillion Telent were appointed subcontractor to BT for BDUK work, early 2014.

That contract was to last for 3.5 years (ie to middle 2017), and was worth "up to £500m".

That £500m is all from the flow over on the right of the diagram. There's a hefty chunk of capital - from BT itself, or from the LA subsidies - to these guys alone.

On top of that, Morrisons Utility had a 3 year contract for BDUK work, followed by an extension for SEP, though no numbers for either.

As contractors to BT, they all invoice BT and are paid by BT. The cash flows from BT accounts, not an LA account.

  • WWWombat
  • 6 months ago

WWWombat I will study those references and comment, but you have not dealt with the absolute amounts.
The councils needed to have funds to accept the BDUK central monies.

  • ValueforMoney
  • 6 months ago

WWWombat pretty graphs - just add the numbers and you will see the gaps.

  • ValueforMoney
  • 6 months ago

@VFM
Errr... The graphs are ones I invented, with made up numbers.

What gaps do they show *you*? They don't show me any.

  • WWWombat
  • 5 months ago

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