Tag Archive for 'big society'

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On the right track with broadband – 2006-style

Published on January 24, 2011 in Adrian's tech blog. 2 Comments Tags: BD-UK, big society, Bournemouth, central government, Fibrecity, next generation networks, tony blair.

To my wife’s frustration, I’ve tended towards the “empty desk, empty mind” end of the scale – in fact I’m a bit of a hoarder. So every once in a blue moon I decide to make amends and clear out the papers that clearly were never meant to be kept but might some day possibly, maybe, conceiveably be useful – the process itself often proves the point, offering a last chance reminder of events since the last re-stacking, and an opportunity to revisit old thoughts in a new light.

Every time there is something pertinent that surfaces, and this time it was a document I was given in 2006 when I attended a small workshop in The Netherlands held jointly by the OnsNet fibre project and the Dutch Government’s broadband team.

The document entitled “On the right track with broadband” (download an English version here) is a guide for councils and housing associations offering advice on tendering and state aid when looking to develop a local next generation broadband scheme.

Its worth remembering the timing of this – 5 years ago. This was a time just after Tony Blair had stood up at the Labour Party conference and announced that it was job done for broadband. At the same time the Dutch Government was actively encouraging and supporting councils, housing associations, and people to become directly involved in securing their long term digital future.

The document’s introduction ends with “The Netherlands can largely thank its present lead in the field of broadband connections to competition on and between networks.”

While the UK has long claimed the most competitive broadband market in Europe, the reality has always been competition on and not between networks – we would not have been able to make the same claim in 2006, and we couldn’t make it today.

In fact the small town of Nuenen, the home of OnsNet, had more fibre connections than the whole of the UK combined – even today, half a decade later, only the FibreCity network in Bournemouth can claim to have more homes passed than the small market town of Nuenen.

If we fast forward to today – five years later – the change of Government in Britain has meant Big Company has been replaced by Big Society; encouraging councils and people to stake a claim on their long term digital future rather than hope a massive subsidy for a behemoth will fix it for us.

Taking lessons from the Dutch experience can only help this process and a British version of “On the right track with broadband” would help put to bed one of the biggest hang-ups we still have – state aid. While other countries have found ways of working with European legislation, we have long used it as a reason to justify our inaction – we are now a long way behind our European neighbours, and the excuse can no longer be seen as reasonable.

And you know what’s mind numbing about this?

The Dutch advice points to more British state aid decisions as test cases than from any other country – Project Atlas, Cumbria’s intervention and Scotland’s business broadband decision. An updated document would no doubt also point to FibreSpeed in North Wales and South Yorkshire’s Digital Region. We pioneered the test cases but we are alone in not learning from them, and as a result we lag just about every European country who was smart enough to follow our pioneers.

The UK still has some of the best independent thinkers on broadband – in our councils, in Whitehall, in communities, and in the industry. For Big Society broadband to prosper as it has in the Netherlands and elsewhere, we need the confidence to support those pioneers and learn from them as others have done.

BT showing signs it’s worried about infrastructure competition

Published on January 5, 2011 in Adrian's tech blog. 0 Comments Tags: BD-UK, big society, ed vaizey, government, jeremy hunt, politics.

BT Wholesale’s Sally Davis was reported as warning the Government not to waste money on small rural broadband projects as a patchwork effect couldn’t possibly work (ISP Review article here). There is perhaps some irony in the example she gives – of the early railways not agreeing standards so they couldn’t work together, given that the railways did successfully put the canal’s out of business and a century later, with standards, multiple rail operators are still vyeing for customers everyday.

Perhaps its mischief more than irony – after all, BT is heavily engaged in the NICC’s ALA work and with the BSG’s passive infrastructure group, both seeking industry accepted standards for interoperability.

On a more general point, wouldn’t it be very odd if a whole nation went in search of a solution and without any dissent they all came up with the exactly same answer?

And what is it about the telecoms sector that is so unique that means it can only function with a monopoly at its heart?

Properly functioning markets develop choice and variety. Some of those choices may be small, others large; some risk averse, some daring; some targeting niches, some a wider constituency – that’s what markets do and are.

And that’s why JON Exchange is being created – to provide a marketplace for a competitive market.

What the shift towards next generation broadband represents is the single largest threat to BT’s monopoly in its history. If a region opts for an alternative infrastructure its likely that, without some serious soul-searching, BT’s Openreach will lose that area for at least a generation. This has never happened before, so Sally Davis’ salvo is assuredly the first of many to come.

The Government’s job isn’t to defend one company against threats from a wider and naturally emerging market – quite the reverse. If the Government doesn’t grasp this opportunity with both hands there is a very real risk that it will be held to ransom each and every time the incumbent should invest.

A functioning patchwork market is exactly what we as consumers and electors need; its what the market needs – it just happens not to suit the one with the most to lose.

People, politics and technology

Published on December 11, 2010 in Adrian's tech blog. 4 Comments Tags: BD-UK, big society, mapping, NGA, oxfordshire, regional identity.

MIT recently published a fascinating piece of research, looking at how social interactions can help to define regions based on a massive sample of land-line telephone calls across Great Britain . They used the anonymised information on the 12 billions phone calls made in Britain in a typical month to see if there were any patterns which could describe natural regions based on human interactions. The results are quire extraordinary!

A quick glance at the resulting maps will tell you that Scots only really talk to other Scots (left-most map below), similarly Londoners but to a lesser extent. The rest of the country tells a rather different story, challenging some of our traditional assumptions about regional identity.

The right-hand map shows an optimised partitioning of the call data, showing that, for example, Welsh people fall into three regions, only one of which is solely in Wales. North Wales communicates most strongly with Manchester and the southern part of what we normally associate with the North West; while Mid-Wales links most naturally with the West Midlands. A fair conclusion from this is that if the UK were to be fully devolved, it would make little difference to the day to day communications of the Scottish population, but it would have a profound impact on the Welsh population.

The Yorkshire-Lancashire rivalry also takes a bit of a knock, with West Yorkshire more likely to communicate with the people of Lancashire than their White Rose brethren; and the more rural Cumbrians are perhaps a mini region of their own.

In checking the validity of their approach, the researches aggregated a number of alternative partitioning models, and this generated additional insight into regional identity.

To the west of London the team identified what they consider to be a new region in the making – a Western Crescent formed of Oxfordshire, Berkshire and Buckinghamshire. This is the heart of England’s high-tech industries with the Silicon Corridor along the M4 and Oxfordshire’s Science Vale with Oxford University and Harwell. What it interesting is the ambiguity of the areas communication patterns – rather than having a very clear and arguably insular regional identity, this Western Crescent is something of a communications hub, reaching out to much of central England.

Why is this important?

The traditional regional boundaries being largely consigned to civic roles with political and economic control being passed to new Local Enterprise Partnerships. What these maps suggest is that the regional identities were already being challenged and that perhaps the more fluid LEP structure would be more able to mould itself to our day to day lives. While the South England region, which spanned Kent and Oxfordshire, meant very little to anyone except central Government, an Oxfordshire LEP able to partner with a Thames Valley LEP may be more successful.

And from my own personal perspective such an approach also means its possible to map telecommunications networks to human interactions. The formative signs of a new high-technology region around Oxfordshire sure deserves a commensurate broadband infrastructure? And its role as a natural communications hub surely makes it the place to start building the future? The research should also have a big impact on Cumbria’s Big Society “vanguard”, and ought to shape Herefordshire’s thinking as they develop their broadband pilot.

As I start to work with the new Oxfordshire LEP on their approach to broadband I’m sure this research will become something we refer back to.

Communities see the case for broadband investments – the proof

Published on November 19, 2010 in Adrian's tech blog. 0 Comments Tags: big society, business models, community, News, next generation networks, risk and reward.

I met Rutland Telecom during the week on JON Exchange business and we got talking about their success. Its been clear to me for a long time that for a great many areas (but not all) what they need is a new business model rather than grants to companies that helps to buffer established but inappropriate business models. Rutland Telecom is a great example of a company that has understood the new landscape and successfully moulded a sensible, sustainable business model around it.

Rutland use funds invested with them by communities to build next generation networks well within the “final third” – the areas traditional operators find almost impossible to invest in. They have very successfully constructed an investment model which gives them access to capital and provides the community with a fair rate of return on their cash – shared risk and reward.

During the chat, they told me that they recently issued dividend payments to their earliest projects, and that some of those initial investors asked Rutland to roll-up the interest and re-invest the sums in other communities. While larger, more established companies are struggling to see the investment case for broadband in some of the UK’s hard to reach areas, the people who live there can – and with Rutland Telecom do.

It was clear from talking to them that we can expect to hear more exciting stories from Rutland in the near future but I’ll let them tell you about that first!

In the mean time, if anyone tells you there’s no commercial investment case for broadband in your area – be polite but smile wryly, turn away and look towards England’s smallest county.

Oxonline

Published on September 30, 2010 in Adrian's tech blog. 2 Comments Tags: big society, broadband, community, digital britain, ed vaizey, News.

Recently there has been a run of really good broadband events around the country, and last weekend was the turn of Oxfordshire. It’s been such a manic week that I haven’t had time to write much about the event but I’ve had several requests for my presentation from the event. The wonders of Powerpoint mean the slides doesn’t run too well in anything other than Office 2010 so feeling I needed to do something I’ve converted the slide-deck a video. So here is the (so far silent) movie:

httpv://www.youtube.com/watch?v=7in2JudXvj4

When I get a moment I’ll try to add a narrative and make it slightly less dull.

Rating success or land-grabs?

Published on August 31, 2010 in Adrian's tech blog. 3 Comments Tags: big society, central government, digital britain, ed vaizey, fibre, manifesto, network architecture, News, rateable values.

I’ve one final piece to get off my chest about the VOA’s “clarification” on business rates applied to fibre networks, and its about the upside-down nature of the rules and how the new framework exacerbates an already difficult situation.

The old rules taxed fibre owners for homes passed regardless of whether anyone bought a service. The new rules almost triple the tax but apply it only to homes connected.

So the old rules penalised investment but the tax could be mitigated against a successful drive to build take-up. The new rules still penalise take-up but now mitigate in favour of land-grabs to keep other providers out rather than in driving take-up – and the ones which are most heavily penalised are likely to be companies specialising in green field developments where they are unlikely to achieve much less than 100% of the homes as the default telecoms infrastructure. (remember BT has special treatment, so this only applies to alternative providers).

The new VOA rules would seem to imply an almost tripling of the tax bill for green field network builders.

The new Government made it clear it wanted to encourage, enforce if necessary, infrastructure sharing but these new rules encourage a more monopolistic mindset – build to stop others building, and make just enough revenue to cover the costs – oh, and make the architecture so esoteric it could never support infrastructure competition anyway.

The VOA has shown no signs that they are even beginning to understand anything the Government has said since coming to power. Had they chosen to develop rules which moulded the rates system around Government policy they might have recommended a system which:

Reduced or eliminated business rates on new fibre investments in Ofcom Market 1 areas where there is currently no investment rather than the opposite
Favoured community led “Big Society” smaller-scale networks over national carriers rather than the opposite
Penalised idle assets and favoured shared and used assets rather then the opposite

I try to avoid clear attacks like this my blog but the VOA appears to have worked against the key policies of BIS, DCMS, DCLG and DEFRA, while creating a framework so arbitrary and complex that the Treasury can’t possibly have any confidence in any figures estimating the revenue it will generate.

The National Audit Office was scrapped for a less fulsome opposition – can we hope the VOA has a similar fate awating?

Rant over.

I’d really like to thank Pauline Rigby for joining me on our journey to understand the VOA rules. We both felt uncomfortable writing politically charged articles like this one of mine but it was clear this was a major issue for the industry we both care about.

Rating the big society

Published on August 17, 2010 in Adrian's tech blog. 1 Comment Tags: big society, broadband, central government, fibre, NGA, rateable values.

I’ve already written about the impact the clarification by the VOA has on technical decisions and network architecture, but there is a wider impact and one which suggests the civil servants at the VOA haven’t really understood the new Government’s Big Society agenda.

By way of an example I’ve attempted to work through a typical rural project and see what the impact the VOA rules will have.

In this hypothetical community lives around 2,500 people in 1,000 homes with 20 shops and businesses along the main street, mostly cafés and family businesses.

Lets say that an NGA project for the area has a single point of presence, and for simplicity that all the shops on the main street average 1km from the PoP and that each take a broadband service over a single fibre. This project is then connected to a neighbouring scheme 25km away using a direct fibre connection the scheme owns. So in total they have 45km (20 x 1km businesses plus 25km backhaul) of rateable fibre and 1,000 domestic customers.

All the tables of what rate what length and capacity are taxed at is here but this is a quick summary for this village:

The domestic access network element is rated at £20 per home connected, so we have an immediate £20,000 to consider.
Then we have 20km of business access with a single fibre lit, so this adds £6,600
And the 25km of backhaul adds a further £16,750 because they lit 4 fibres

A total rateable value of £43,350, which is rounded down to probably £43,250 and a multiplier is applied to calculate the payable rates. I understand the current multiplier is 0.417, so the rates payable by this community is £18,035.25 – or almost £18 per customer per year.

To add further complexity to this, I’ve assumed this project was an isolated community wanting to help themselves but if they had accepted an offer from a much bigger commercial company who had more than 1,000km of fibre, they might find the rates bill drop to a little over £13 per subscriber because scale, for the Valuations Office, matters.

There are any number of lessons to be learnt from this. Firstly that the additional rates for migrating a corner café shop from first generation broadband to a fibre-based connection costs as much as they may be currently paying for their broadband connection which seems to counter the ambition of the Government to unlock the potential of small businesses.

But equally curious is the disadvantage a self-help Big Society community is being asked to endure over a larger corporation through the business rates system. In my hypothetical village, a Big Society community would be asked to pay almost 40% more in business rates than Major Plc (setting aside the special treatment of BT which further exacerbates the problem).

It seems the VOA have created a very unique landscape for the UK to overcome. The UK has neither the appetite nor the money to fund a Da Wo top-down national fibre network, but the VOA rules means we also have a tax system which penalises grass-roots developments as well.

So who is encouraged to build if macro and micro approaches are being discouraged?

A model being championed by Rory Stewart MP for his Cumbrian constituency, part of which falls within the Big Society pilot area, is the idea of a village pump for broadband – a high-speed backhaul connection delivered to the heart of the community. If this is delivered by an large organisation then they may also benefit from lower business rates than the community itself would.

This then leaves the community to pick up the rates on the access network element for which there is less discrimination. As I coved in a previous article, if the community opt for a PON network rather than point-to-point then they can argue that the businesses can’t be isolated from the domestic customers, which limits their rates liability to “just” £20 per subscriber, business of domestic.

This seems such a complex, arbitrary model which serves to further contort the market rather than open and improve it. Somehow I don’t believe that Rory’s Village Pump concept was at the heart of the civil servant’s thinking when they “clarified” the rating system – its one of the many unforeseen outcomes.