Written evidence submitted by
Shropshire and Marches Campaign for Better Broadband in Rural Areas (SAMCOBRA)
with regard to the extent of broadband coverage in remote rural areas
[RBB 0009]
Environment, Food and Rural Affairs Select Committee
Rural broadband and digital-only services Inquiry
Contents
Even though it is funded by substantial sums of public money, BDUK’s rural broadband rollout is not serving the interests of remote rural communities well, and under existing arrangements is unlikely to do so. Coverage will continue to prove inadequate for as long as the following twelve conditions apply.
1.1 Connections to premises are upgraded where quite workable connection speeds already exist, yet those at the periphery are excluded and are even experiencing significant reductions in speed.
1.2 There is no recognition that take-up of high speed broadband packages is low where green cabinets have been upgraded to fibre as the result of BT’s centre-outwards approach.
1.3 Success is presented in terms of the Total Homes Passed (THP) which will provide a low unit cost and suggest good value for taxpayers’ money, yet the far better, but much higher unit cost of premises actually taking up high speed broadband packages will not be publicised.
1.4 No rigorous evaluation of Phase 1 deployment is planned before Phase 2 begins.
1.5 The contractual claw-back mechanism disincentivises BT to extend into the most rural areas where take up would certainly be higher.
1.6 BT maintains excessive levels of secrecy around deployment information, project costs, and possibly performance of what is a largely publicly-funded project.
1.7 Cross-border arrangements are unclear.
1.8 The minimum guaranteed broadband connection speed remains at 2 Mb.
1.9 Phase 2 deployment for national programme relies on local authority funding for matching money which cannot always be found.
1.10 Dual/multiple use of infrastructure is neither encouraged nor enforced.
1.11 Alternative (or a mix of) technologies are not brought to bear.
1.12 Competition between providers of broadband infra-structure is prevented by the BDUK bidding process.
2. WHO WE ARE
2.1 Shropshire and Marches Campaign for Better Broadband in Rural Areas (SAMCOBRA). We are a loose association of individuals from Shropshire and the Marches who came together in 2013 to argue for a change in direction of BDUK’s rural broadband programmes. We set out three principal aims:
(1) To reverse priorities in favour of those households and business experiencing poor/no/slowing broadband.
(2) To argue for a guaranteed minimum connection speed significantly higher than the 2 Mb on offer
(3) To gain clarification on cross-border issues where premises are in one administrative area but the exchange serving them is in another
2.2 Who we represent. Our campaign newsletter is regularly sent out to over 600
people, most of whom live in Shropshire, plus a few in neighbouring Powys. It is also sent to politicians, media contacts, and broadband providers. Our supporters include many farmers and owners of rural businesses. More than 50 Town and Parish Councils have pledged support to our campaign
2.2 What we have achieved. Sadly, not one of our principal aims has been met. With the benefit of hindsight we have learned that because of the way in which the BDUK framework was set up these aims were quite unrealistic. The technology exists to realise them and they remain entirely reasonable given the necessary degree of political will combined with enforcement of EU State Aid requirements. As broadband speeds get even slower this is a continuing and growing source of frustration and anger for ourselves and our many supporters. Many MPs have made similar representations in Parliament on behalf of their constituents. Nevertheless we have achieved a great deal in other ways. From small beginnings in three parishes in south-west Shropshire our support grew rapidly. Within a few months our campaign had been endorsed by over 50 parish/town councils. An electronic petition gathered 1,208 signatures, earning us a five-minute slot to address Shropshire’s full Council in February. We have gained widespread media coverage in the Shropshire Star, on BBC Radio and on technical websites. In November last year we were invited to attend and address the cross-party Digital Policy Alliance at Westminster. We have met with MPs and the Leader of Shropshire Council. At our request Shropshire Council set up a rural broadband partnership group. Sadly, this proved ineffective and also inhibited our ability to speak freely. We decided to withdraw from it after four meetings as our opinions were not sufficiently valued and there appeared to be a predetermined course of action for Phase 2 of roll-out.
3. ISSUES
Even though it is funded by substantial sums of public money, BDUK’s rural broadband rollout is not serving the interests of remote rural communities well and under existing arrangements is unlikely to do so. Coverage will continue to prove inadequate for as long as the following twelve conditions apply. It is astonishing that questions were not asked with regard to each of these during the design of the programme, nor the likelihood of their acting as inhibiting factors taken into account during any pre-rollout risk assessment.
3.1 Connections to premises are upgraded where quite workable connection speeds already exist, yet those at the periphery are excluded and are even experiencing significant reductions in speed. It is perverse that a so-called ‘rural’ broadband programme has failed to prioritise those people in the more remote areas. Well before the programme started many were already on low speeds, and in some cases still on dial-up. That situation has now worsened and speeds are becoming unworkable for many, yet no adjustment has been made to allow for this. It is not in question that BT, as the incumbent owner of the UK’s copper-based telephone system, needs to play a major role in creating a fibre-based broadband infrastructure. In practice, however, it has used public money to reinforce its monopoly status and to ruthlessly exclude competitors, with apparent disregard to the EU State Aid requirements that expressly forbid this.
3.2 There is no recognition that take-up of high speed broadband packages is low where green cabinets have been upgraded to fibre as the result of BT’s centre-outwards approach. At the time of writing we know that up to September this year take-up in Shropshire’s Intervention Area is 8%. We recognise that it is early days, but if those well beyond the reach of a commercial service had been given priority we feel that this percentage would be far higher. This percentage will rise as the result of BDUK’s current promotional drive, and probably the Christmas period, but if measurement in January of the quarter ending in December shows no prospect of reaching, say, 25-30% this will vindicate our criticisms of misplaced priorities. A recent survey (available on request) of a typical rural community in south-west Shropshire resulted in over 50% of households expressing interest in faster broadband (64% of them being home –based workers). BT has told them that they will not be connected in any Phase 2 project and they should consider satellite provision. Fixed Wireless (FW) provision is out of the question because under State Aid Rules bringing FW into an area for the first time can render other householders ineligible for BDUK-funded provision, including the guaranteed 2 Mb minimum (it might even be argued that this inhibition of expansion by fixed wireless operators is anti-competitive). If it had been included in roll-out plans, this particular survey area and many others like it would have ensured a far higher high take-up rate.
3.3 Success is presented in terms of the Total Homes Passed (THP) which will provide a low unit cost and suggest good value for taxpayers’ money, yet the far better, but much higher unit cost of premises actually taking up high speed broadband packages will not be publicised. Value for money should be defined as the most cost-effective way of meeting urgent needs. Instead it will be linked to the high number of premises with access to faster broadband (THP) whether they wanted it or not.
3.4 No rigorous evaluation of Phase 1 deployment is planned before Phase 2 begins. In moving towards contracting for Phase 2 of roll-out, we seriously question the lack of arrangements for BDUK and local authorities to evaluate the progress of Phase 1 roll-out according to take-up percentages, the unit costs that would derive from it, and the actual numbers capable of accessing speeds of 24 Mb or more. The latter information is available at cabinet, exchange and local authority level, yet although we believe that attempts are now being made by BDUK to rectify the situation, we suspect that there is currently no across-the-board system to collect it. It appears that even at the level of whole project area local authorities are not taking these measures into account in preparation for Phase 2 contracting. The ultimate measures of success of the BDUK programme must surely be the percentages of premises where a subscription for high speed broadband is taken out, the numbers of premises within reach of a superfast service, and the unit costs of each. Yet government press-releases and ministerial statements base success on the numbers of premises ‘passed’ i.e. whose lines are now supplied by a green cabinet (or in some instance, an Exchange-only line) that has been upgraded to fibre-optic cable (mainly FFTC). This is meaningless in two ways. Firstly it provides no information on take-up, secondly it does not take into account that although large numbers of premises may be ‘passed’, because of the relationship between connection-speed and distance from a cabinet, many will receive far less than superfast, and many will receive no ‘uplift’ at all, often continuing to suffer speeds of 2Mb or less which, in some cases, are actually worsening. We request that these more meaningful measures should be collected, made publicly available and used for Phase 1 evaluation purposes. We request that no further contracts for Phase 2 should be let until that information exists and has been taken into account.
3.5 The contractual claw-back mechanism disincentivises BT to extend into the most rural areas where take up would certainly be higher. The funding of local authority contracts includes claw-back clauses where take-up of superfast broadband exceeds contracted percentages – typically 20%. Once this percentage is exceeded, money can be clawed back from BT. Irrespective of BT’s engineering logic which dictates a centre-outwards approach, it could never be in their interest to deploy in the more remote areas because this is where take-up would be highest (50%+) thus increasing the likelihood of repayment.
3.6 BT has maintained excessive levels of secrecy around deployment information, project costs, and possibly performance of what is a largely publicly-funded project.
a) Through the realisation that fibre-based broadband would never reach them, many communities wished to find ways of implementing alternative provision, either using other providers or on a ‘self-dig’ basis. In almost all cases they were prevented from doing so, either because BT has not made available the deployment information that would enable them to proceed, or through its use of non-disclosure agreements which meant that local authority officers were not permitted to release that information in spite of the work being largely state-funded
b) Evidence exists of a sufficiently serious nature to require further investigation that BT has greatly exaggerated the costs of deployment
c) Key performance indicators such as take-up, and the range of speeds accessible for Total Homes Passed (THP) have not been placed in the public domain, although we are not sure if this is because BT has withheld them or whether local authorities and/or BDUK have chosen not to publish them.
3.7 Cross-border arrangements are not unclear. From the start of the programme, and despite repeated requests, communities on one side of a county/country border served by exchanges on the other have been left in the dark about arrangements for upgrading them. Exchange area geography is not contiguous with administrative areas, but it should not be difficult to permit flexibility over boundary responsibilities between neighbouring project areas. Financial adjustments could easily be made at the end of the project, although this seems hardly necessary where BT is the same provider on each side. This situation has been made worse on the English-Welsh border where a Welsh Assembly grant was not permitted to ‘leak’ across the border slightly. This could have created a viable business case for upgrading some cross-border communities. As it is, neither half of those communities will be upgraded.
3.8 The minimum, guaranteed connection speed remains at 2 Mb. Broadband usage is increasing exponentially and as technology moves on what is workable at present will not be so within a short space of time. The rural economy contributes 18% of national GDP. It should not be regarded as second best. There should be a Universal Service Commitment of at least 10 Mb coupled with the serious intention to improve this in the future.
3.9 Phase 2 deployment for a national programme relies on local authority funding for matching money which cannot always be found. The BDUK project intends to create an improved national infrastructure but its success depends on the availability of matched funding from local authorities. Phase 1 roll-out fairly safely assumed about one third matched funding from local authorities, and was probably regarded as an effective way of reducing surpluses that central government coveted. For Phase 2 it was riskier, especially as this time round pound for pound matching is required, yet further cuts on local authority funding are biting hard. Many local authorities appear to be able to match for a second time, but by no means all. Shropshire has a large deficit to reduce and says it cannot match. Connecting Devon and Somerset is struggling and is currently £3m short. East Riding is reported to be having difficulties. There are probably more.
3.10 Dual/multiple use of infrastructure is neither encouraged nor enforced. Ducting is the most expensive element in bringing in fibre, but there are plenty of other structures that can be used for carrying fibre-optic cable. Almost every home has a telephone and is connected to the national grid. BT’s pleas that telegraph poles might not bear the additional weight may be a further attempt to justify a centre-outwards approach, or simply an excuse to hide the fact that they have failed to maintain their estate of poles and many are in a poor condition. There is little tradition of collaboration between utility providers yet many of their assets are ideal for dual use. Disused water mains can be used for carrying fibre-optic cables, as can railways, canals, sewers, and storm drains. Examples of carrying fibre alongside other utilities abound in this country and abroad, yet the rural broadband programme operates in almost complete isolation of other utility companies’ assets. A recent EU Directive to encourage greater dual use of infrastructure, although targeting exactly this sort of situation, will not come into force until 2016. There is already much under-utilised fibre in rural areas from other projects such as school networks.
3.11. Alternative (or a mix of) technologies are not brought to bear. This programme could have deployed fixed wireless at one tenth of the cost and far more quickly. Although the BDUK programme is entitled ‘rural’, it has confused aims. If, as seems to be the case, it was also intended to upgrade the national infrastructure to fibre-optic cable, it should have connected the most rural areas by wireless as a temporary measure, and also chosen Fibre-to-the Premises (FTTP) as a more future-proof technology which could have been funded and rolled out more gradually. With few exceptions the requirement for superfast broadband is for future needs rather than right now. As it is, the use of BT’s Fibre-to-the cabinet (FTTC) approach will fulfil neither aim fully. It is not connecting those most in need, and because of its limitations there will be calls for further government subsidy in years to come to convert FTTC to FTTP.
3.12 Competition between providers of broadband infra-structure is prevented by the BDUK bidding process. With a single, almost monopoly provider, service levels will remain poor and innovation will be slow to take place. Prices may remain high.
RECOMMENDATIONS
4.1 PHASE 2 MORATORIUM. For a short period of time the opportunity exists to change the direction of the rural broadband programme. We request an immediate moratorium on further contracting by all BDUK-funded local authorities that have not yet signed agreements with BT for the second phase of roll-out. It should remain in force until this enquiry's findings and recommendations are published and, if necessary, acted on, and the effectiveness of the first phase of rural roll-out has been properly evaluated in terms of take-up and range of speeds available to Total Homes Passed.
4.2 CONDITIONS OF FUTURE CONTRACTING. Arrangements for further contracts for the next phase of deployment should be based on the following conditions of contract
4.3 PHASE 3 FUNDING.
This should be released as soon as possible to enable local authorities to complete arrangements for 100% of premises, making use of a greater mix of technologies and providers. Where possible, Phases 2 and 3 should be a single exercise and not sequential.
November 2014