When IT Meets Politics

Jun 1 2011   10:39AM GMT

Will the proposed BDUK framework do more harm than good?

Philip Virgo Profile: Philip Virgo

Tags:
BDUK
BIS
DCMS
DECC
Duopoly
framework
Janet
NEN
OCEAN
Ofgem
Oftel
PIN
Procurement
PSN
Sky

Last week, in Brussels, Ed Vaizey talked of the need to use market forces to pull through investment in broadband. A day later Jeremy Hunt wrote to MPs on the replacement of central competitions for funding by allocations to authorities to “be made available once we have reached agreement with them on other sources of funds and their plans for delivery”. I blogged a welcome while pointing out the need to put the broadband infrastructure plans alongside those for smart metering and grid infrastructure so as to cut the costs of both.

I had been briefed on the lack of progress in aligning the DECC/OfGEM and DCMS/BIS/OfCom agendas and how this was delaying industry-funded scalable pilots (that will interconnect and inter-operate to international standards). Today I was e-mailed on the Prior Information Notice for the Broadband UK plans to delay procurements by another year while it concocts a framework contract to limit competition to a handful of nationally approved cartels. Do officials inhabit the same planet as Officials and MPs? Or is this a consultants pipedream that has been overtaken by the events of the past fortnight – with 107 MPs supporting the motion for debate in the House of Commons on the need to expedite action.

None of the DTI/DCMS/OGC co-ordinated broadband aggregation/network sharing exercises over the past decade has gone live. From the Regional Aggregation Boards and Broadband Aggregation Project to OCEAN the waves) and the “evolving” plans for PSN the consultants advising Whitehall have been paid ¬£millions and the main would-be suppliers have spent tens of ¬£millions (each), bidding for business that has never been awarded. Meanwhile Janet and the NEN have saved their customers (including local government and communities where the contracts allows) 30 to 70% on list price. More-over their frameworks are available for others to use or copy at little or no cost. Local government consortia can often boast of similar savings and opportunities. Those who drafted and reviewed the BDUK PIN appear to have learned nothing from that collective experience and be determined to reinvent yet another square Whitehall wheel at the expense of suppliers and customers alike.

The time has surely come to allow market forces to address the centralised planning and regulatory failures of the past decade that have reduced the UK from leader to laggard in the on-line world, including by preventing BT from completing its investment programme to deliver “full motion entertainment quality video to the home by 2002” (the BT half of duopoly, alias competition in the local loop, policy of the previous Conservative government). 

The necessary BT fibre investment programme was running ahead of schedule in 1997 before it was replaced by the bad farce of local loop unbundling. The latter, as had been predicted, not only destroyed the BT business model but also removed an economically sustainable UK on-line communications and content market. Instead we had expectations of cheap connections and free downloads in the belief that “some-one else will pay” (e.g. advertisers). Sky has inherited the paying market and we now have to enable the markets to recreate sustainable business models for terrestrial broadband – e.g. allowing customers to pay up front for a broadband connection that adds more value to their house than double glazing or a conservatory.

It is great that competition in the local loop has finally come to life again, with BT and Virgin expected to compete across half the Country by 2015, but was the price of saving the NTL and Telewest from near anihilation by BT too high?

Should parliament have been consulted on the policy change?

What are the lessons when it comes to the review of the role of Ofcom?

Rebuilding healthy markets will not be easy and it not at all clear whether Broadband UK is part of the solution or symptomatic of the problem.   

I am about to review the draft report of the EURIM sub-group looking at practical experience with shared network service procurements. Next week sees the announcement of the EURIM policy study into using investment in shared infrastructures to help pull through economic recovery. This will come to fruition under my successor who will be more objective in looking at the issues – I helped draft the last Conservative Government’s policies! – hence some of the comments above.

It may be that I will have to eat some of my words when I see what is produced.

If so, I will be delighted – provided that my own broadband connection problems (and those of my rural relatives) have indeed been sorted.

But I fear not. 

 

5  Comments on this Post

 
There was an error processing your information. Please try again later.
Thanks. We'll let you know when a new response is added.
Send me notifications when other members comment.
  • cyberdoyle
    I agree, the whole thing is a farce. A dream for consultants and organisations which spring up every time funding is mentioned, but they are no match for an incumbent fighting to keep everyone on a phone line.

    The only way to get a decent connection to every property in the UK is to quickly get support out to the final 9% of customers who the telcos won't touch. These people currently have no adsl or mobile worth calling 'broadband' and will help new businesses get the infrastructure in and also will take up the service. The new rural networks with their own peering will start to take over the urban customers who are also highly dissatisfied with what passes for connectivity. These people will then start to innovate and use the gigabit capacity (which will be symmetrical) and urban folk with what currently passes for reasonable connections will want it too. Therefore the market will rush to supply the dense urban areas and so market forces will do the job rather than lose their income.

    Current procurement is slanted towards making highly urban areas faster. This is not the way to get a digitalbritain, all we will get is a bigger digital divide, with many stuck on BET or satellite as other countries light fibre.

    It needs out of the box thinking, and its no good blaming what has gone on in the past, time to look to the future and get next generation access for the next generation. If all we do is aspire to 'superfast' for a few we are going to look very stupid very shortly.

    chris

    0 pointsBadges:
    report
  • Peter
    Given the LLU providers have now reached critical mass, then incentivising them to cover the other 40% of the population would be a quick way of upgrading the upto 8Mbps to am upto 24Mbps service.

    0 pointsBadges:
    report
  • Paul Nash
    The headlong rush to an open and competitive market in order to drive down prices ignored two things: the UK market place is only so big and having sliced and diced the pie as much as we can we are now down to shuffling the pieces around the plate. Secondly, there is such a thing as "too cheap"; truly competative markets drive prices to the smallest margin which leaves precious little for investment. While the dream of Europe may be for services traded across borders in telecoms land there are too many national interests and we tend to forget that we are a small island off the coast of France. In short we are trading brands, not infrastructure.

    I might take issue with you over the effectiveness of JISC and the NENs in this context, especially having had some experience of both in the early days of broadband aggregation. They both have a very specific service offering in a well defined market place serving institutions which are, by and large, geographically and economically fixed. That's not the same as either business or residential services on a National scale.

    Your key point is, however, crucial: should we have stayed with a single national provider and accepted the fact that we are a small island off the coast of France with a small, clearly defined market? Who knows, would we have just created a British Rail of Telecoms which ultimatley cut the rural branch lines because it couldn't see how it could be made to pay?

    One thing is crystal clear, the powers that be should get their act together and soon, end the navel gazing, stop being a sop to the big commercial provideers and JFDI

    0 pointsBadges:
    report
  • cyberdoyle
    are BDUK any match for this: #digitalbritain #bduk RT @LouLouK: This is worth a read. BT's mission to influence localgov CEX thinking https://bit.ly/jVaU2z

    I can testify that exactly the same happened at Lancashire county council. We knew something was afoot when a top BT global chap moved to Preston the year before the 'strategic partnership' happened.

    chris

    0 pointsBadges:
    report
  • Guy Jarvis
    Well said Philip.

    The reality, after a year of broadband delay already and another year ahead of the same, of BDUK is that it is more than merely not fit for purpose rather BDUK is actively impeding the present and future prosperity of the UK by its abject non-delivery.

    Looking at the individuals involved, including a former BT Retail Video Phone marketer, the point man for the five year delayed Digital Region South Yorkshire debacle plus a range of temporary secondees from non related sectors of government and it is perhaps not surprising that broadband progress is noticeable by its absence.

    What I find truly remarkable and immensely disappointing is that the Coalition had the opportunity a year ago to really get behind broadband delivery as an ideal catalyst for the Big Society active localism approach.

    Instead we seems to have more Big Government top down diktat from folks who simply don't know what they are doing.

    The omens are not good and the solution remains simple enough:

    Jeremy Hunt and Ed Vaizey needs to admit the failure of the BDUK process, sack it off and put the power into the hands of the customers as Wales and France have already proven through precedent with Broadband Vouchers that reward results not lobbying - see http://br0kent3l3ph0n3.wordpress.com/2011/06/01/satellite-operators-play-broadband-card-in-europe/

    0 pointsBadges:
    report

Forgot Password

No problem! Submit your e-mail address below. We'll send you an e-mail containing your password.

Your password has been sent to:

Share this item with your network: