When IT Meets Politics

January 25, 2017  9:39 PM

Is the Internet leading us back to 1930s protectionism?

Philip Virgo Profile: Philip Virgo
Brexit, BT, OTT

I was struck today by a piece by Eli Noam on how the Internet got Donald Trump elected.  This came on top of recent articles from Social Europe on “Why the Working Class has abandoned the left”  and the case for “a New Deal to save Europe“.  As a member of the Internet Society since 1995. I have long been concerned over the introverted nature of most on-line policy debate: the Internetties in their Cyberghettoes talking to themselves. Meanwhile the progressive digerati , with their obsessions about using big data to analyse traffic over social media, appear to have also systematically misled themselves. They now appear to be collectively helping lead democracy and informed choice into oblivion.

Luckily the accountants and stock market analyists may be about to save us all. They have spotted that spend on using big data to drive personally targeted Internet advertising campaigns  is almost all wasted. It changes few spending decisions and commonly costs more than the revenue (i.e. not just profit)  generated. The consequent collapse in stock market valuations will dwarf that in the share price of BT after the discovery of “over optimistic” accounting in its Italian subsidiary.

The differences between BT’s UK accounting practices and those of its competitors will, however, trigger a re-evaluation by fund managers which could have serious consequences for the UK. A re-rating (including of BT’s debt) is likely to raise Treasury concerns over its exposure to the underwriting of BT’s pension liabilities. This has implications for the UK Government plans to use public funding to encourage the deployment of full fibre networks – the consultation on which closes on the 31st January . I have promised to make public (via this blog) a summary of the reasons for the disparity between the costs quoted by BT and those quoted by competitors deploying modern technology in co-operation with property-owners and local authorities. We must avoid any temptation to route budgets intended to encourage investment in future ready infrastructure into covering pension fund (and other) deficits.

Meanwhile, it will be interesting to see the economic consequences as US Tech and OTT players begin to repatriate profits to pay reduced “post Trump” corporation taxes.  Will we also see 1930s style protectionist trade wars? If so, will the UK, as piggy-in-the-middle between a protectionist EU and an equally protectionist US, be squeezed. Or will the entrepreneurs of London and Dublin use fully porous (both physical and digital) borders between Ulster, Munster, Leinster and Connaught to lead the British Isles (not just the UK) into a new round of growth and prosperity as entrepot between the US, EU and rest of the world?

In this context my quibble with the Tech UK response to Brexit is its failure to mention that most relevant skills shortages are pan-European and/or Global. We need to give priority to removing the barriers which prevent our youngsters acquiring world class skills not just poaching from our neighbours. As Yanis Varoufakis, former finance minister of Greece, puts it in his article calling for a New Deal for Europe: “The vast majority of Greeks, Bulgarians and Spaniards do not move to Britain or Germany for the climate; they move because they must.”  We rely on them (and others) because we have failed to give our youngsters the skills needed by their local employers.

That is partly because our main Tech employers have consistently failed to put their lobbying muscle behind the Sector Skills Partnerships (and their predecessors) when they tried to get the well-honed, century old, University dominated UK funding hierarchies to take fostering employability as seriously as grooming and filtering for academic excellence. The Brexit vote was, in no small part, symptomatic of a growing revolt among those labelled as failures while still at school!

There is a body of evidence which shows that this revolt, also mobilised via the Internet (but not picked up by Big data analytics because …) helped win the Brexit vote for Nigel Farage.

We have be serious about supporting training programmes (for all age groups) which develop globally recognised skills. The alternative could well be a 1930s mix of Nationalism and Socialism, led by the “true” masters of social media.

We also need to take a good look at the collapse of trust in the on-line world and its values – as well as in almost everyone else.

We live in interesting times.

January 10, 2017  1:12 PM

NAO queries HMRC plans to relocate people instead of using technology

Philip Virgo Profile: Philip Virgo
Broadband, centralisation, HMRC, NAO, Uncategorized

The BBC News today carries the news that HMRC has just realised that current plans to move 38,000 staff into 13 regional centres may be “unrealistic” . The intention to move from 170 local offices to shared city centre “Government Hubs” and regional “Mini-hubs” was announced some time ago.  According to the National Audit Office report “Managing the HMRC Estate” this was part of a Civil Service strategy to move staff to “Offices based in city centre locations forming part of government hubs, close to Universities and Colleges and with stronger skills bases and talent pipelines”, with “a good local supply of housing, schools and recreation facilities” and “high speed broadband and mobile networks”

The shared “Hub” concept does not relate to the locations where specialist IT skills are needed. User staff will move from Redruth to Bristol, Dundee to Edinburgh and Norwich to Croydon (not known for broadband excellence). Meanwhile the HMRC IT development complexes (now to be called Specialist Centres) will stay where they are – at Telford and Worthing, with two new centres at the well-known University towns of Dover and Gartcosh.

Does that mean HMRC’s IT centres do not need a talent pipeline or that they are too important to risk moving staff from where:

  • office property is cheap and available to hot spots where it is expensive and may be rationed
  • where housing is cheap and available to where it is not
  • commuting is relatively easy to where it is not (even when the trains and tubes are not on strike)
  • alternative employment opportunities are limited to where there is intense competition for talent.

The National Audit Office report is nearly as savage over the forward property plans of HMRC as it is over those which led to the current proposals. Page 48 of the report lists the HMRC failure to respond to previous recommendations.  The consequent summary of the NAO recommendations is polite but devastating. The biggest sting is in the tail.

25 HMRC is seeking to implement an ambitious estate strategy alongside 14 other major programmes designed to transform the way it administers the tax system. Many of these programmes are interdependent. It is inevitable that not every aspect of the transition to regional centres will run smoothly and HMRC must learn as it goes and respond proactively as issues arise. It should:

a Improve its control of the costs of the new regional centres. HMRC needs to be realistic in re-forecasting costs and guard against optimism bias. Given the inherent uncertainty in the property market, it should plan for the worst case rather than risk basing its plans on optimistic assumptions. It should put in place an adequate contingency for the programme of regional centres as a whole to make it resilient to emerging cost increases.

b Plan in detail how the infrastructure it is putting in place through regional centres will support the ways of working its business aspires to. HMRC has yet to demonstrate how in practice the regional centres will help its employees provide a better service to customers while increasing the efficiency and effectiveness of its compliance work. It should prioritise engagement with its business to identify what features of the new estate will be most important to support working practices that will deliver the outcomes it is seeking.

c  Put in place a process to learn lessons by analysing the costs and benefits of occupying and operating regional centres. HMRC should be clear how it will establish whether it is achieving the benefits it expects from its regional centres once they become operational, and at what cost. It should identify and apply good practice from its occupation of the Croydon regional centre in 2017, and evaluate how its forecasts of the timetable, costs and benefits were affected by events. It should build a framework to compare the performance of the regional centres by identifying each centre’s annual running costs, service levels and business outcomes.

d Build in flexibility to respond to future changes in technology and working practices. In negotiating property deals for the regional centres, it must therefore balance cost considerations against the benefits of retaining flexibility to make future changes to its estate.

Equally interesting is the way the public Government policy of devolution appears to be accompanied by a private Civil Service policy of recentralisation as well as of insourcing.  In short – there appears to have been a quiet decision to reverse the long standing policy of relocating government staff out of London wherever possible. But not when it comes to IT staff – where HMRC and DWP have begun to rebuild their in-house expertise with staff training programmes which put most other employers to shame and appear to have no wish to risk driving away those attracted to areas where public sector pay, even before pensions, outstrips that in the private sector.

So why is HMRC going down such an odd road?

The clue is the press release for the NAO report  “Managing the HMRC Estate” . The driving force behind the HMRC proposals is the need to escape from one of Gordon Brown’s more expensive and inflexible sale and leaseback deals.  It is particularly interesting that the landlord in this case, was formed specifically to bid for the HMRC deal.  HMRC has declined to look at the offshore tax arrangements of Mapely.

Perhaps the time has come for the Public Accounts Committee to call for specials audits the tax affairs of all off-shore property companies currently milking the public sector – including all those NHS Hospital Trusts and Schools also trapped with exhorbitant maintenance charges. Might this form part of the Flexit deal – to which we are inexorably moving: with our departure from “ever closure Union”  accompanied by deals with the major member states to address aggressive tax avoidance of all types, halt free movement of terrorists and enhance co-operation on surveillance.

Meanwhile, if Government is serious about using “digital” to transform the way it does business, it should be putting communications availability at the heart of its future plans. Until recently Croydon was a communications notspot. The history of the UK’s porous borders was linked to the inability to connect Lunar House in Croydon with our ports and airports.  Has BT overhauled its local networks sufficiently to handle the many firms planning to relocate to within easy reach of Gatwick? How many of its competitors are planning global terrabit links to the area?

Meanwhile the war between Southern and the Rail Unions has led to a growing number of  CEOs asking whether it is cheaper and more efficient to collectively contract fibre to the homes of key staff and/or hot desking office suites in commuter towns and villages, than to rely on being able to travel into City centre office complexes. This gives added bite to the current consultation  on how to extend full fibre cover across the UK

January 1, 2017  12:28 PM

2017 – When Brexit from “Ever Closer Union” morphed into creating a Confederation.

Philip Virgo Profile: Philip Virgo
Brexit, data breach notification, digerati, European Union, Uncategorized

January is the time for predictions. A forecast is “the pretence of knowing what would have happened if what does happen hadn’t”. A prediction is much more “scientific”. Those in this blog are based on privileged access to an exercise by the University of Trantor using the current state of the Prime Radiant. They therefore have an authority lacking in other studies, except perhaps the thousand page “Change or Go” report – although that was focused more on the consequences of remaining in an unreformed Union.

The European Project, “ever closer union”, died in Lisbon: when the Prime Ministers of the leading member states decided that immediate problems should take precedence over ensuring that the new Presidency of the European Union would be more democratically accountable than the previous structure. We then saw a widening gulf between the aspirations of the Benelux establishment and the economic and political imperatives driving the member states and their directly elected politicians. The subsequent claims that any derogation of powers to meet the aspirations of the UK were impossible, as opposed to inviting the UK to help lead the long overdue attempts to meet growing demands from all sides for reform, helped ensure that the UK referendum was lost to an unlikely alliance of Brexiteers.

70 years of peace had meant that the benefit of ensuring that Britain, France and Germany would never again send millions of young men to die on the plains of Flanders was no longer a more persuasive argument than the joy of confounding whole armies of metrosexual experts and corporate lobbyists telling “Middle England” what to do and think: especially since the latter were held to blame for a financial crash which had wrecked private savings and pensions and for then opening UK borders to uncontrolled immigration.

But it was not as thought the revolt of Middle England was unique. Similar movements across the world showed the the Internet had unleashed forces that the  digerati  did not comprehend. The masses had found a voice, after decades of being patronised. Perhaps the most worryingly effective at harnessing such semi-inarticulate discontent was DAESH – who had turned the Arab Spring into a crusade (Jihad) against Christmas (and Western values as a whole).  The inability of the European Union to respond helped call in question its very raison d’etre: peace in our time”.

The consequent need to halt a slide back into the bloody slough of nationalism and socialism made the “retreat” from an indefensible and increasingly brittle “Ever Closer Union” to a robust and resilient “Multi-track Confederation” inevitable.  The subsequent success of the European Confederation was, however, critically dependent on the way the UK had proceeded, in parallel with its Brexit negotiations, to lead successful, outward looking, pan-European co-operation in many of the areas where the previous “Union” had failed.

These included making a reality of the Digital Single Market (previously a hotchpotch of compromises which mainly benefited large organisations parented outside the EU) and of the cross border movement of students, scolars and staff (in line with the Treaty of Rome), as opposed to benefits tourists and potential terrorists (as encouraged and/or enabled by CJEU decisions  which were interpreted differently and/or had different consequences in different member states). In both areas the UK led the opening up of effective processes with India, China and South America (with lucrative interim transit arrangements via the UK): opening Festung Europa to global free trade and intellectual co-operation even as the Donald Trump was busy building Fortress America.

Then there was the twin-track attack on cross border tax avoidance and fraud. This was co-ordinated via the City of London and helped turn round the finances of most member states.  Contrary to expectations the result was a win-win for both the UK economy and the Treasury but the most spectacular winners were Italy and Greece. The only serious losers were Belgium and Luxembourg. The latter became an economic backwater, kept afloat by tourism and its earnings from running global broadcast services.

Such practical co-operation gathered pace in the course of 2017 as UK debates over the meaning of Brexit exposed the various agendas of the players who had previously blamed (or credited) Brussels for their own domestic decisions. One of the first attempts to bring those agendas together was a thoughtful Policy Exchange paper “Immigration and Integration after Brexit“. It contained a number of analyses which put the concerns of high tech employers, large and small, into context. It also prodded some sacred cows, albeit too gently in the eyes of Max Hastings in the Daily Mail – who nonetheless welcomed the opening of a more honest debate.

Meanwhile the growing tempo of events: from the Charlie Hebdo affair and the Bataclan massacre through the mass outbreak of rape in Cologne on New Years Eve 2015/16 to the Bastille day Massacre in Nice and the attack on Christmas in Berlin  changed the nature of many debates across the Europe: from freedom of movement to privacy and surveillance. More significantly, the way the UK police and security establishments responded rapidly and positively to calls for direct assistance also changed the nature of debate on post-Brexit co-operation at the official level. Instead of obfuscation and delay we saw ruthless triage into

  • areas of consensus (which could be agreed on the nod),
  • areas where agreement was never likely (which could be kicked into touch) and
  • areas where workable agreement was in the interest of all concerned

Then, after the UK had ceased to recognise the supremacy of EU law, came a series of UK class actions, under common law, to sue major global corporations for invasions of privacy and sale of personal data. These had been foreshadowed in the Cyber Security report of the Culture Media and Sport Select Committee but their impact, on top of the Consumer Association class action against the Banks (after the failure of their petition to lead to action) came as a shock.

Their success, and the dramatic changes to business models they brought about, helped put bureaucratic nonsenses like the General Data Protection Regulation , with its focus on data breach notification, the phisherman’s friend, into context. They also showed consumer groups across the EU what they would miss if the UK was driven out of the EU – rather than enticed back and embraced as part of a multi-track confederation.

The consequent acceleration of pace, as officials were encouraged to prioritise areas for constructive co-operation, instead of wasting time on areas where agreement was either easy (to be taken at the gallop) or impossible (to be left for manana), meant the important negotiations had been completed by the end of 2017. The consequent reforms had made sufficient progress in reducing student unemployment to avert serious bloodshed (at least outside Brussels) during the riots of 2018: when an improbable alliance of US supported libertarian activists and Soviet supported socialists trashed the buildings which symbolised the heart of the European Union. The mayhem across other member states was trivial by comparison.



December 16, 2016  3:49 PM

The first NCSC enquiry (Nativity Child Safety Consequences)

Philip Virgo Profile: Philip Virgo
nativity, Surveillance

Extract from the minutes of the departmental enquiry into the so-called “Massacre of the Innocents”.

” … the homing beacon was switched off as soon as the expert advisors from China, India and Iran had  arrived …  secure subliminal “DREAM” channels were used successfully to warn the experts of the Herodian threat and they returned another way …  The close surveillance team then used the same channels to tell Joseph and Mary to make immediate use of their vouchers for Egyptian post natal care … The team then travelled with them … {redacted} failed to leak news of their departure … {redacted} decided that to warn others of the possible consequences would risk exposing our methods …  ”

Then Herod, when he saw that he was mocked of the wise men, was exceeding wroth, and sent forth, and slew all the children that were in Bethlehem, and in all the coasts thereof, from two years old and under, according to the time which he had diligently inquired of the wise men.

Apologies to those of you who would prefer a more cheerful Christmas message – but I have been in a thoughtful mood the last couple of weeks.

P.S. Instead of sending Christmas Cards I am donating to Barnardos, the RNLI and the Salvation Army.





December 16, 2016  10:36 AM

Lost in the global cesspit of Big Data

Philip Virgo Profile: Philip Virgo
Big Data, Data governance, Eurim

IT events calenders are awash with events on the wonders of “Big Data” but an article by Craig Stedman headed “IT teams take steps to simplify Big Data analytics process” caused me to wonder how far the world has moved on since I spent a year as a financial modelling consultant in the “Management Science” team of ICL in the mid 1970s. Most of those who then wanted big complex computer models to crunch their growing files of data were unaware that what they were looking for could be done quickly, simply and more usefully with pencil, paper and a slide rule

I recently attended a meeting on the wonders of using “big data” to help serve “smart cities”. The “impressive” example from New York  was something that could have been done using 1930s punch card technology. The break through had been to get departments to share sensitive information on problems they were shy of discussing with others.

That raises the core question of why departments are so resistant to data sharing – commonly using “data protection” as a mantra. Meanwhile, for example, patients are dying in hundreds, possibly thousands, across our fragmented “National” Health Services because of the errors, delays and conflicts that occur when data, like care, is parceled out among specialists.

So why is there so much resistance to sharing when it is in the interest of the customer, patient or resident (but not when it is being quietly sold to an advertiser on the other side of the world)?

In rough order the top three reasons appear to be:

  1. Fear that others will learn just how poor (quality, accuracy etc.) our own data is
  2. The inability to agree common terminology
  3. Fear that others will abuse “our” data

All three are commonly valid and need to be addressed sensitively, intelligently and constructively because “force” tends to produce unfortunate results – e.g. common terminologies that are vague, ambiguous or misleading when clarity and precision matter most,

That set me to wonder just how much (little) the world has moved on since Philip Dunne MP (then Parliamentary Chairman of the EURIM Information Governance Group) hosted a Directors Round Table on the problems that arise across public and private sectors from the failure to put accuracy and availability ahead of protection. Almost all the material tabled for that event (and archived on the website) has, unfortunately, stood the test of time. One of the unfortunate side effects of the end of the Audit Commission was the end of its work on data quality across the public sector. A snapshot of the  subsequent EURIM work programme can be found on the website archived just after I retired. My personal favourite was the study for which the one page summary was headed “From Toxic Liability to Strategy Asset: unlocking the value of information “.

Today we see the opposite approach: calls from every corner to collect as much as possible to be mashed up in a Big Data slurry pit, using ever more expensive technology. Meanwhile one of the world’s most respected analytics companies puts the skills of its people and their ability to identify accurate and relevant sources first.

December 11, 2016  11:15 PM

Flexit and/or Bre-entry not Brexit versus Remoan

Philip Virgo Profile: Philip Virgo
Brexit, European Union

The English voted to leave the European Union. Did they vote to leave Europe?  The reasons for the result are a matter for debate but we know they voted firmly against “ever closer union”.  We are being told, by all sides, that belonging to reformed and democratically accountable European confederation is not an option. We are therefore left with re-establishing the UK’s traditional position as an entrepot between the European continent and the “rest of the world”. Neither fully a part of Europe nor fully apart from it.  Meanwhile the Union appears to be sliding into a downward spiral of introverted  protectionism. Europe has a history of political turmoil in years ending with “8”: 1848, 1918, 1968 … will the Union survive 2018?

I  “held my nose and voted remain” , with the intention of then redoubling my efforts to help bring about reform. Some of my peers voted leave because they felt it was the only way of bringing about the creation of a genuine single market, whether digital of otherwise.

Recently Michel Barnier said we have 18 months to negotiate Brexit . He may well be right. Without a deal that is acceptable to all sides, the Union is unlikely to survive much more than 18 months. The stresses over the Canadian trade deal indicate that agreement on anything is all but impossible. The way forward is therefore  an evolving web of ongoing ad hoc and piecemeal negotiations covering the areas where players want to reach agreement. Those areas where they do not will be left to the labyrinth of WTO disputes resolution processes, making London, as home to most of the worlds international trade lawyers, even richer.

Hence my view that a FLEXIT parachute (covered with layers of Brussels fudge to conceal reality) is more likely than BREXIT (whether hard or soft).

Meanwhile, we have the unedifying sight of former Brussels lobbyists trying to keep the status quo while Brexiteers squabble about what they mean. Most of the Brussels establishment appears paralysed in the face of multiple threats to its way of life – not just from the UK.  In consequence we have megaphone diplomacy accompanied by expectations that a deal will be made behind closed doors – a denial of the democratic revolt behind the referendum result.

We need to remember that the current single market, including freedom of movement, is a typical piece of Brussels fudge.  Only “Les Gibbies” (GB stands for “guiles be bois”, the woodentops, too thick to understand when they are being sent up) take it seriously.

Freedom of Movement  does not, for example, apply to British Lorry drivers, without the equivalent of “A Level” French and a certificate in French Transport law, who wish to pick up and drop parcels or containers within France as part of a triangular route. Native French speakers do not have to take the tests – reasons that my informant, fluent in “lorry drivers’ french”,  could not explain. The time has come to look at how other member states encourage the “freedom of movement” they want while blocking  that which they do not want – whether from other member states or from other parts of the world.  We also need to publish data on which immigrant groups contribute more than they cost and which employers import what skills – to enable informed debate.

I have spent over twenty years trying to make a reality of the digital single market but it can still be cheaper and easier to acquire digital content of EU origin via the United States or China, than across an EU Border.  The kinds of cross-border price discrimination that were outlawed forty years ago in the car industry are still rampant in the on-line world – enforced by geo-blocking and global law firms.

The time has come to look at what we really want to keep from the wreckage of the European Union when it falls apart and is rebuilt as a democratically accountable confederation in the wake of the elections and referenda of 2017 – 18.

As the negotiations evolve, we should support those projects and initiatives that we like. This might well entail increasing our contributions and commitment to well run, forward looking,  infrastructure, research and skills programmes. At the same time we should make clear that our contributions to the cost of, for example, the duplicate Parliament in Strasbourg, or to programmes to support European Tobacco Farmers, will cease.

We need to stop agonising over what Brexit means and start fighting for what we want from Flexit and are willing to pay for. That entails unpacking meaningless slogans like “we want to remain in the digital single market” or “we must keep freedom of movement” into their component parts. Which bits of what has been achieved to date do we wish to keep? Which meaningless compromises do we want to either drop or turn into reality?

December 6, 2016  9:44 PM

MPs understand IT better than IT Professional understand politics

Philip Virgo Profile: Philip Virgo
Brexit, DPA, Eurim, GCHQ, GDPR, PICTFOR, Pitcom

Bryan Glick has just written an excellent piece on why the tech community needs to be active in the politics of the issues that affect it.

I completely agree but first we need the Tech Community to understand more about politics. Too few of them understand corporate or trade association politics, let alone “professional” (and I do not just mean those of BCS or IET) politics.

The problem is compounded by lobbyists who tell politicians that things are impossible when what they really mean is that they do not fit their clients current business models. An example is those who have attempted to rubbish the mix of anonymised age checking and selective blocking which enables cost-effective on-line child and consumer protection. They have also resisted the automated collation of abuse reports allied to processes to track and trace abusers, including across borders. The success of such processes correlates closely with the effort put in, It can be close to 100% in the case of Hollywood films pirated before release – because the studio lawyers have budgets (for legal advice and technical “investigation”) to match those of Google or Microsoft, and “outgun” most Telcos, ISPs or the Domain Name “industry”.

I have now been engaged in trying to help MPs understand IT and IT professionals (users not just suppliers) to understand politics for 40 years.

My problem can be summarised quite succinctly.

MPs have long understood Computers, IT and Digital better than IT professionals or the new Digerati understand politics.

But BOTH “sides” think it is the other way round.

That was why PITCOM was created (in 1981), with the support of the National Computing Centre (which then had over 2,000 USER members) and Computer Weekly (which was then almost entirely funded by Job Adverts). Both were more interested in the use of IT to meet customer and public needs than in the sales pitches of the suppliers and gurus of the day.

So what has changed?

The NCC and the User Groups of the 1970s and 1980s are no more. And Computer Weekly no longer depends on Job Ads. But more MPs than ever before have had a professional background in IT. More-over almost all are now sophisticated personal users of IT, including to filter enormous volumes of constituency and lobbying e-mails into those that matter. Their use of techniques like Twitter or Facebook is limited mainly by their uncertainty as to whether those whom they wish to communicate are using them. The success of UKIP, Brexit and Trump indicates they are correct to be cautious. Few of those who e-mail MPs ever read their tweets. Some MPs think that is because the most vociferous (the digital equivalent of the old “green ink” letter writers) live in not spots where they can barely browse the Internet at all, let alone make effective use of social media.

All that said – one of the most popular events of the EURIM (now DPA) calender used to be an annual reception with the  Computer Weekly 500 Club, when MPs could hear the views of those responsible for making the technology work.

Taking a look at the topics currently before Parliament. There is much more that needs to be said about privacy and surveillance. But not by the “usual suspects”. MPs are only too well aware that most of their voters are far more concerned over the threats from the insecure adware that clogs response times over their PCs as it monitors their every internet look-up, let alone transaction, and tracks their smart phone  where-ever it (albeit not necessarily the owner) goes,  than they are about “threats” from GCHQ or law enforcement.

Meanwhile the rush (? rash) of new UK data centres is in part because major e-commerce and cloud operators know that the consequent consumer backlash means that the days of seamless global clouds are as numbered as the days of offshore call centres in locations that cannot, or will not, survive the implementation of the GDPR.

This morning I received a note on the plans for the PICTFOR programme for the year ahead and was most interested to note how closely it resembles the current Digital Policy Alliance work groups. I hope that before the 2017 is out the two will be working together as closely as PITCOM and EURIM once did.

I would personally like to see that include the exercise to turn Brexit into Flexit, i.e. have cake and eat it.

I will blog on this separately when I can make time but it entails deciding which bits of the Single Market (including in skills) we wish to help the EU to progress, (perhaps paying a reasonable contribution accordingly), and which nationalist derogations and obfuscations we need like a hole in the head. I would remind readers that under “the Digital Single Market we have not yet got” it is easier to route many on-line transactions via the US (or increasingly via China), not just via the local operations of US players.

November 24, 2016  10:36 AM

Not quite “bye bye to business rates for broadband” … yet

Philip Virgo Profile: Philip Virgo
Broadband, Uncategorized

A five year holiday for new investment in full fibre back haul from April 1st 2017, as announced in the autumn statement, is a major step in the right direction. It is not, however, the full overhaul that is needed. That will hopefully come as the small print of implementation is negotiated over the next few months.

Yesterday I rejoiced. Today I would like to add the necessary notes of caution:

  • First there is the risk that digging that might have taken place over the next few months will be put back to after next April. I am not sure how big a risk this is – but it needs to be addressed if the UK is not to slip further behind overseas competitors during the Brexit negotiations.
  • Second there is the position of local fibre connectivity. The announcement refers to the fibre spine. This is indeed where some of the most egregious distortions in incentives (or rather disincentives) to invest have occurred but local  fibre also needs encouragement.
  • Third there is the position of wireless networks. All modern networks are a mix of fibre and wireless. The issue is how close to end device does the fibre get. Even with fibre to the home, there will commonly be a mix of wireless and powerline between the router(s) and the smart phones, TVs and toys, if not yet fridges, that are increasingly used to access the Internet. Meanwhile 4G and 5G  will need armies of masts to service the flocks of IoT devices that will ebb and flow through city centres, around sports arenas and tourist hot spots and along motorways and rail lines.

The business rates holiday needs to be accompanied by a review of the Valuation office “tone list” to bring it into line with the way unit costs and prices have tumbled over the past decade or so. That  requires the competitors to BT to be less shy about giving current information to the Valuation Office. I have no illusions as to how difficult this will be. Back in 2010 I blogged in support of the last attempt to get them to do so. Almost none responded. They have since had to live with the consequences.

Time has, however, moved on. My understanding is that some of the players have been using evidence of current actuals in support of the current crops of appeals and court cases. The consequence has been “an outbreak of sanity”. Treasury now has the evidence that this is an area where apparent “give-aways” will lead to more tax revenue … not less. More-over, it will only lose if it fights to maintain unrealistic valuations which do not fit with the fundamental basis of the rating system.

Better to give way gracefully – beginning with a good headline!

November 23, 2016  7:43 PM

Bye bye business rates on full fibre broadband

Philip Virgo Profile: Philip Virgo
5G, Broadband, iot

The announcement of a Business Rates holiday for full fibre broadband investment from April 1st is a tribute to the hard work put in by many players. It is also, perhaps, the cheapest give away the Chancellor has ever made. I calculate the net cost as zero. From almost the first month it will generate more taxable revenue for less hassle. There are many to thank but Kit Malthouse (Parliamentary Chairman of the Digital Infrastructure Group of the  Conservative Technology Forum) was the only MP to actually ask for action on business rates during the second reading of the Digital Economy Bill. Others thought it too difficult or technical an ask. I would also like to thank those who pursued appeals within the letter and spirit of the business rates regime. They succeeded in demonstrating that the current tone list values were about to collapse anyway.

Now comes the hard work of delivery. I put off blogging on the actions in put in train after the discussions at the party conference until today’s announcement – the hope that I could tick off at least one. Hence my joy that one of the biggest obstacles in the way of investment by the competitors to BTs has been removed.

The full wording in the Autumn Statement is as follows:

Digital communications

3.20  The government will invest over £1 billion by 2020-21, including £740 million through the NPIF, targeted at supporting the market to roll out full-fibre connections and future 5G communications. This will bring faster and more reliable broadband for homes and businesses across the UK, boost the next generation of mobile connectivity and keep the UK in the forefront of the development of the Internet of Things.

This will be delivered through:

  • £400 million for a new Digital Infrastructure Investment Fund, at least matched by private finance, to invest in new fibre networks over the next 4 years, helping to boost market ambitions to deploy full-fibre access to millions more premises by 2020
  • a new 100% business rates relief for new full-fibre infrastructure for a 5 year period from 1 April 2017; this is designed to support roll out to more homes and businesses (39) providing funding to local areas to support investment in a much bigger fibre ‘spine’ across the UK, prioritising full-fibre connections for businesses and bringing together public sector demand. The government will work in partnership with local areas to deliver this, and a call for evidence on delivery approaches will be published shortly after the Autumn Statement (10)
  • providing funding for a coordinated programme of integrated fibre and 5G trials, to keep the UK at the forefront of the global 5G revolution; further detail will be set out at Budget2017 as part of the government’s 5G Strategy (10)

Among the topics I aim to cover in the blogs over the next few week are:

  • the need for network builders and those property owners who want better fixed and mobile access for their tenants to work together to secure fast and fair agreements on access and wayleaves: within days or weeks, not months or years. A start has been made but there is much still to do.
  • the need for backhaul competition – to provide the secure and resilient inter-operable, but not inter-dependant (i.e. no single points of vulnerability), fibre spines on which a smart society, with ubiquitous 5G and vast flocks of chattering IoT devices, will depend.
  • the need for maintenance competition – so that those dependent on, for example, Openreach, do not have to wait for one of their engineers or contractors to fix that which those who already maintain much of the UK’s critical national infrastructure could fix without delay.
  • the need for a central repository of information on 5G standards and trials, perhaps maintained by Inspec and/or the National Physical Laboratory,  so that not just UK researchers and innovators, but those making plans and committing procurements have easy access to world class information.

On the 17th October the council of the Digital Policy Alliance approved, subject to membership buy-in,  plans covering all these topics. One of the reasons I have not blogged much since has been because I have been busy identifying those who want to deliver practical results and pull forward future-ready investment. I lost interest in those who wish to identify and admire problems for future study some years ago. The necessary critical mass finally appears to be coming together. I look forward to being able to also blog on some very interesting partnerships, as soon as the participants are willing to be quoted.

November 3, 2016  10:45 AM

Homebuilders Federation opposes fibre to the home policy

Philip Virgo Profile: Philip Virgo
5G, fibre, Gigaclear, Uncategorized

The Home Builders Federation has formally opposed proposals, in its new town plan, by Ashford Borough Council to  require fibre to the home to developments of more than ten properties unless impractical. This goes further than the BT offer of free fibre to the home for developments of 30 or more properties which the HBF negotiated earlier this year. Developers might therefore have to pay BT for access and have no certainty of alternative offers, whether free or not.

The full objection, (see below) appears to equate “National Policy” with the deal negotiated earlier this year between the HBF and BT and quotes costs given by BT in the course of that negotiation. There is an interesting question as to how far these reflect the experience of the others who might wish to serve the new business parks and housing estates around Ashford International Station and the Channel tunnel terminal. They also appear to be higher than those experience in the rather more rural areas being served by suppliers like Gigaclear. This objection therefore appears to be more of a pre-emptive strike against other councils who might be considering similar policies

The HBF concludes that  “Developers want to provide Broadband in new homes. This has become an expectation of customers. The HBF is working hard with Open Reach and other providers to improve the service to new homes.”  Meanwhile Borough Councils like Ashford are looking ahead to 2030 when Fibre and 5G are expected by the Minister to be ubiquitous. Indeed this section of the plan is only one of a number of measures being undertaken by Ashford to encourage and facilitate, not just mandate, local investment in a future ready infrastructure.

It appears essential for the alternative (to BT) suppliers to respond to the objection below – and contact the HBF with their counter offer.

Should many more councils be thinking ahead, requiring new homes to be future ready?

Are the quoted costs a fair average, or have they been overtaken by new technology and business models?

Should future policy be dictated by national deals between dominant suppliers and major trade associations?

Or is that the way the world works and the Federation is being perfectly reasonable?

Please make your views known via the pressure group or your choice? Or post your comments in response.

Local Plan to 2030 Regulation 19 – Publication June 2016

Document Section Local Plan to 2030 – Publication Draft TOPIC POLICIES SECTION B – EMPLOYMENT AND THE LOCAL ECONOMY Promoting of Fibre To The Premise (FTTP) Content [List all comments on this document part]
Comment ID ALP/1920
Respondent Home Builders Federation Ltd (James Stevens) [List all comments by this respondent]
Response Date 10 Aug 2016
Current Status Accepted
Do you consider this part of the document is Sound? No
On which grounds do you consider the document unsound? (if applicable) Not Justified, Not Consistent with national policy
Do you consider the Document is Legally Compliant? Yes

This policy is unsound because it is unjustified and inconsistent with national policy. The Council has not considered the cost implications of this policy.

The policy requires that all residential development within the Ashford urban area will enable FTTP. In rural areas, schemes of 10 or more dwellings will enable FTTP.

Firstly, this is in effect a Grampian Condition imposed on applications. Providing a fibre connection is not within the control of the developer: the applicant depends on a third party provider, such as Open Reach. If Open Reach cannot provide a connection, or provide fibre, then this policy would allow the Council to refuse the application.

Secondly, there is a cost associated with complying with this policy that is especially difficult for smaller developments. Those organisations (like Open Reach) providing fibre connections do charge customers, although the tariffs they charge are not publicly disclosed. However, for dwellings in areas where there is no fibre network, the cost can be very high. It averages out at about around £2-3,000 per dwelling as the provider will need to build a cabinet and then extend the fibre from the cabinet to each dwelling in a scheme. This will cause difficulties for rural schemes. We have provided a copy of the agreement between the HBF and Openreach (letter to the Government dated 3 February 2016). This indicates the costs involved, although the specific costs are not referred to by the agreement for reasons of Openreach wanting to maintain commercial confidentiality. One of the key passages from the agreement is:

“However, although the co-funding offer is available to all those outside of existing coverage, for some of these smaller developments the cost to connect will be considerable and it is for these that wider community funding and alternative technologies could have a role to play. Openreach and the HBF jointly recognise there is still more work to be done to come up with solutions for the smaller developments of fewer than 30 homes where they do not benefit from existing coverage.”

There are significant cost implications associated with this policy and the Council will need to factor this into its viability appraisal. This is an area that is not currently covered by the Viability Study. The Council proposes that the policy is applied only to schemes of 10 units and more, but the providers will charge developments at this scale. Only on very large schemes will developers tend to benefit from the economy of scale.

The caveats in the policy with regard to applicants for proposals of ten units and under having to demonstrate what is ‘practical’ does not accord with the NPPF. The NPPF requires that “only policies that provide a clear indication of how a decision maker should react to a development proposal should be included in the plan”. The words ‘where practical’ would not provide this precision. It would be unclear to the applicant what the Council might judge was ‘practical’. This could be very subjective. This would prevent applications that accord with the development plan from being approved without delay (NPPF, paragraph 14).

Similarly, we are concerned by the requirement that if fibre is “not practical due to special circumstances” (with the applicant having to demonstrate those ‘special circumstances’ to the Council) then s/he will need to provide non Next Generation Access technologies. Again, like fibre, this is in effect a Grampian Condition as providing such technologies is not within the applicant’s direct control. This policy could be used to refuse an application.

Developers want to provide Broadband in new homes. This has become an expectation of customers. The HBF is working hard with Open Reach and other providers to improve the service to new homes. This is a priority. However, we are concerned by the prescriptive nature of this policy, and how it effectively imposes a Grampian Condition of all new residential development. For these reasons, we consider that the policy should be deleted from the plan.

We recommend that this policy is deleted from the Plan.

What changes do you suggest to make the document legally compliant or sound?
Do you consider it necessary to participate at the oral part of the examination? Yes
Does your representation relate to an omission site (a site that has not been included). For example a site for Housing, Employment, Travellers, or Local Green Spaces. No
Please supply details of the omission site.

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