back to article BT wins another HUGE gov-funded rural broadband deal

Multi-billion pound telecoms giant BT has landed another broadband government subsidy to lay fibre in the countryside: this time for a £56.6m joint local authority project between Herefordshire and Gloucestershire that won't be completed until 2016. That's a whole year behind Whitehall's 2015 "challenging target". The fibre- …

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Aim low to ensure disappointment

Delays, targets of 2 Mb/s by 2016, and a cost looking like £400 per property. Good to see that the government have such high levels of ambition.

In other news government pays 2.5 million people to sit on their backsides because there's no work, apparently, because there's nothing for them to do.

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Re: Aim low to ensure disappointment

Actually:

* End of 2016 - 90% of homes and businesses to have access to FTTC or FTTP, and all remaining premises to have access to a 2 Mbps service.

* End of 2018 - All those who want a 24 Mbps or faster connection will have access to one.

So it's not quite as bad as you suggest. I'm not all that familiar with the area but I know it's quite rural in parts so it won't be easy. If it was easy/cheap we'd have dozens of bidders but instead it seems only BT has the skills and resources to put forward meaningful bids.

As for 2.5 million people sitting on their backsides - if someone is going to install the next generation telecommunications equipment for me I want them to be qualified not some oik found wandering around a job centre. I also don't want any old oik digging trenches anywhere near my house.

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Anonymous Coward

2 Mb/s - whats the point?

3G can do more than that now, 4G will reach these people before BT do.

How far out do these rural types have to live anyway?

I'm on the edge of the peak district, manage 30Mb/s here.

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Re: Aim low to ensure disappointment@AndrueC

"* End of 2016 - 90% of homes and businesses to have access to FTTC or FTTP, and all remaining premises to have access to a 2 Mbps service. End of 2018 - All those who want a 24 Mbps or faster connection will have access to one."

If it works I shall be happy for those who benefit. But I'll be very surprised if we get to 2018, and find that this has been delivered. Even assuming that the promise is delivered, then within two years starting 2016, they'll need to take 10% of properties (presumably the most remote ones) from 2 Mb/s on damp string to 24 Mb/s. Does that sound likely to you?

Admittedly I'm in bad company suggesting that the government are unambitious, the House of Lords having made a smilar point earlier this year.

Regarding the unemployed, I wasn't suggesting that they were simply handed a pick and shovel, rather that there are trainable people who are already being paid to do nothing and some of them actually would like to work. Unskilled, youth and rural unemployment in particular have been hard nuts to crack, so why not let this contract to BT based on them training and using currently unemployed people. There's lots of detail "problems" that the nit pickers can get stuck into, but nothing that any intelligent person couldn't resolve fairly quickly.

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Re: 2 Mb/s - whats the point?

i'm within 5 miles of a town with FTTC and i'm lucky to get 4!!! more like 2-3

according to The Master Plan i cant see us getting any better ini the next 10 years at least

i can only dream of ADSL2+ and up to 24mb!!!

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Unhappy

Re: Aim low to ensure disappointment

Well I live in the area, on a very rural exchange, and we already get better than 2mps so it's money for old rope. We don't get mains gas because no one wants the challenge of laying the infrastructure so there was never any hope of getting Virgin interested. Old beardy likes his consumers in a heap.

BT will just beef up the existing infrastructure in the big towns and ignore the rest for a few years.

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Re: 2 Mb/s - whats the point?

I live in a rural part of the area covered and we don't get 3G and 4G is a dream along with fibre. Without fibre for the backhaul we are aren't likely to get 4G

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Re: Aim low to ensure disappointment@AndrueC

So, BT are recruiting ex forces people primarily to support this work - are you suggesting they should stop this in favour of 'other' unemployed people?

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Re: 2 Mb/s - whats the point?

3G (and 4G) can't do those speeds with any great density of users.

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Re: Aim low to ensure disappointment@AndrueC

I understood that as part of this deal - explicit or not - BT is taking on lots of ex-service personnel and giving them permanent jobs.

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Re: Aim low to ensure disappointment@Spiny_Norman

"So, BT are recruiting ex forces people primarily to support this work - are you suggesting they should stop this in favour of 'other' unemployed people?"

Yes and no. The ex-forces people are (in my close experience of forces personnel) resourceful, able and willing to work, and have a range of skills that are in part transferrable. The young unemployed generally speaking have poor qualifications, little or no work experience, and little or no skills. If I'm choosing which unemployed to subsidise, then it makes more sense to focus on those currently with the worst outlook, rather than cherry picking those who have far better skills, experience and initiative to help them find or create work themselves.

Having said that, on a normal contract you won't have the overhead and the skills to do that much training. Which organisation probably is the most experienced at taking raw and inexperienced young people, and getting them to do a skilled job? Probably the military. This doesn't come free, but the potential exists to use both ex-military, existing civilian employees and contractors, and the hard-core unemployed to do a lot of infrastructure work that otherwise won't get done anytime soon.

Not just rural broadband, but things that need doing but currently aren't being done, like bring the water mains up to an acceptable condition so that we don't lose a third of water put into supply. There's a ton of other opportunities in infrastructure that could be addressed, and you could hoover up all the ex-services people and a large tranche of the unemployed and willing to work.

Government do nothing, seeming to think that the young unemployed aren't costing us much, because jobseeker's allowance is diddly squat. But when you factor in the lost tax income from them not being in employment, and the implied pension contribution credit that should be accrued for their life after the retirement age, then each unemployed person is costing the state around £10k a year, even if they don't get the full range of welfare benefits. If they are getting those then you're talking more like £20k a year. Which brings me back to my starting point - slow and unambitious roll out of broadband, whilst people who want to work sit at home and twiddle their thumbs.

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Re: Aim low to ensure disappointment

"only BT has the skills and resources to put forward meaningful bids", unfortunately not the case. The bidding process was biased in such a way that only BT could win, that is why they are winning all the business.

They are also the only bidder. Fujitsu has pulled out, but is staying in as a favour to BT and BDUK to make it slightly less obvious it is a stitch up

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Re: Aim low to ensure disappointment@Spiny_Norman

Doesn't BT also take on a fair few apprentices though?

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FAIL

Wait. What?

Fibre rollout, delivering between 2 and 24 mbps? That'll take three years?

Meanwhile nothing I or the Parish council in another semi-rural part of the home counties can do will convince BT to actually go ahead with their promised FTTC upgrade. Just keeps getting pushed back by three months at a time. Exchange is enabled, cabinet installed, they just need to power it up.

Sigh.

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Meh

Yeah I don't understand situations where cabinets are not being powered up. I can understand situations where nothing has been done because it's not worth the money but if they've gone to the expense of installing hardware why not finish the job?

But as for time scales for this deployment I suppose that depends on the area to be covered. If they anticipate a lot of blocked ducts or pole replacement that could slow things down. Given the already questionable financial situation they probably don't want to employ an entire legion of engineers and if it means a lot of ground work fixing or laying ducting/poles that could be a real problem.

The EU and BT together have done a good job for Cornwall it seems so probably it's just down to money and willingness. I can imagine local councils being less bothered about it than the EU.

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Happy

The Forgotten Corner

Well being completely smug - it seems to have worked in some parts of Cornwall - Openreach vans outside house now installing fibre - but we may be an easy target as maximum of 2 kilometres from exchange to end of run. Cost is a concern though, as I would not have thought more than 40 properties max to be connected and the 2 vans have been on it a week doing about 400 metres a day.

2 miles, 100 years and a very deep and wide river away from Plymouth.

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Anonymous Coward

"Yeah I don't understand situations where cabinets are not being powered up. "

You don't think that BT have made a promise either nationally or regionally to "fibre-up" a certain number of properties by a given date in return for money? And you don't think that a way of avoiding penalty clauses might be to hold back some easy gains on sites that you've physically completed, or would have done anyway? There's rarely a reward for over-delivering.

Another possible cause (rather than blaming BT) is for DCMS to be asking BT to ensure that a certain number are delivered in a given time period by "managing the commissioning". Lest that seem particularly cynical, I was recently working on secondment from my employers to a particularly misbegotten government scheme, and significant risks are being taken and costs incurred purely so that an arbitrary deadline can be met for a minister, several months before the scheme will actually be ready.

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I'm not aware that BT are facing any penalties with respect to roll-out timescales other than general shareholder and market feedback. BT are rolling out to their own timetable. No-one has set any dates other than themselves so if they miss those dates it's nothing more than egg on their face.

All that crap about 'broadband Britain' is just political rhetoric and BT is private company so is not liable for what overenthusiastic or mis-informed politicians say.

There probably are good reasons behind 'dead' cabinets but I don't think it's motivated by some desire to be seen to living up to anyone's expectations and I'm pretty sure there's no legal or regulatory penalty for being a bit tardy. There might if/when BDUK projects actually kick off but not for any cabinets currently installed as of December 2012.

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Anonymous Coward

I was told that once turned on BT have to pay tax on the installation. If there are no or few customers, the revenue won't cover the tax bill.

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@AndrueC

"All that crap about 'broadband Britain' is just political rhetoric and BT is private company so is not liable for what overenthusiastic or mis-informed politicians say."

Utter rubbish. I've already mentioend a scheme that I've been involved with where a nominally private company is bending over backwards to accomodate a politician's promise. Maybe you didn't understand that, but I've seen this from the inside in both energy and water sectors, it does happen, it happens regularly, and you're a berk if you really believe all this "arms length, private company" rubbish.

BT Openreach is a regulated business, at the whim of the regulator, who in turn is appointed by, and does what the pols want. If the pols want to massage the numbers, do you really think that BT are going to turn round and refuse?

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In a small town in Norfolk we are actually in quite a good situation with Broadband surprisingly. Especially if you compare the 60Mb/s I get to the 3Mb/s that my friends in Vienna, Austria get. So perhaps we are not the worst off.

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From what I remember...

... Herefordshire is very sparsely populated in some areas, and has a higher than usual proportion of directly connected lines (i.e. no cabinet). One of the more challenging areas of England.

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Have I got this right...

...We are paying (being tax payers) BT to install broadband in some areas so that BT can then charge people in that area for broadband services? It seems we are paying BT money to enable them to take more money from us.

How do I get into this business?

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Re: Have I got this right...

Not only that, but the possibility of a subsidy must positively encourage BT to drag its heels over providing an adequate network. My cabinet will be upgraded eventually under the much delayed planned roll out, but for mysterious reasons only some of the subscribers on it will be offered an upgraded connection.

If taxpayers have to pay for the network, perhaps it's time to take it back into public ownership. leaving BT with retail services only.

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Re: Have I got this right...

> If taxpayers have to pay for the network, perhaps it's time to take it back into public ownership. leaving BT with retail services only.

No. Never. No-one who remembers how the Post Office ran it could possibly want that. And, really, do you want to hand control over the Internet in the UK to the government? In fact - do you really trust the government to be better at managing one of the largest, most complex and most expensive infrastructure projects the country has ever seen?

I don't. BT might not be perfect but putting that project into the government's hands would be worse.

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Re: Have I got this right... @AndrueC

"I don't. BT might not be perfect but putting that project into the government's hands would be worse."

Whilst I agree with the principle, you might want to consider the electricity sector in which I work. We can't build anything without government say so, we have to decommission things based on government or EU say so. We are heavily regulated by OFGEM in many but not all areas, we have direction from government on social tariffs, social obligations, and other quasi welfare state impositions that the rest of you can pay for. We now even have Vacuous Dave telling us how many trariffs we have to offer customers. They tell us what a good profit would be, what kind of generating assets we should build, how the wholesale market ought to operate (because, let's face it, they'd know)..

Government is so busy interefering in great detail in areas where it knows nothing that it might as well renationalise the industry. I doubt telecoms is much further behind us.

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Re: Have I got this right... @AndrueC

Oh yes please, re-nationalised energy companies would be like a gift from the gods. Same with the water companies. Compition clearly hasnt worked, and these firms are making masive profits, with our resources.

Oh and BP

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Re: Have I got this right...

The number of potential customers multiplied by the price they're willing to pay is often not enough revenue to justify the cost of installation. BT or Virgin have to borrow to install this kit and investors aren't keen on funding projects that won't make money.

That leaves society with a choice - no fast broadband unless you live in a city or some kind of subsidy. The funds government provides are only a contribution, nowhere near the full cost - they fund the difference between what is a justifiable investment and the actual cost. if BT or Virgin decided to ignore profit and build out anyway they'd be selling below cost which then runs the risk of them falling foul of the Competition Act and being accused of predatory behaviour.

The other way to fix this would be to extend the Universal Service Obligation to include broadband but that would push the price of broadband up for everyone else. Under USO, phone line install and rental charges are averaged - the current broadband model is based on only providing service where the cost is affordable at market pricing rates.

Put another way - broadband in the UK is too cheap to encourage investment by providers. We can choose to leave people in high cost areas unserved, we can increase prices or we can provide subsidy.

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Re: Have I got this right... @Mike Brown

"Oh yes please, re-nationalised energy companies would be like a gift from the gods"

Well, if you want the shitty service and high prices that nationalised industries offer, then start campaigning for this. I've worked for the water industry, and you wouldn't be in any hurry to renationalise that if you knew what poor quality polluted shite the publicly owned water boards pumped into your home; or the awful treatment standards for sewage. Or the extent to which they just tipped foul water into rivers whenever it rained, rather than separate foul and storm flows (or build detention tanks). And you've evidently forgotten the hige workforce that the water boards had, sitting round doing not a lot.

The strange thing is that most people of all political persuasions accept that government couldn't organise a piss up in a brewery. They can't balance their books, they can't complete simple procurement procedures, they can't collect taxes properly, they can't control immigration, their "customer services" across all department is abysmal, etc etc. But some half brains still think that giving complex technical tasks and big IT and customer facing roles to the government is a GOOD IDEA, because PROFIT IS EVIL.

Ever been to Russia? I have, in fact I've worked out there trying to address the seventy years of neglect and incompetence that state ownership has wreaked on "simple" tasks like water supply. That's the end game for state ownership of utilities.

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Re: Have I got this right... @Mike Brown

Ever been to Norway? There nationalised oil industry seems to do ok. As is Argintinas. Ever been to Uraguay? There water nationalisation programme has made water safer, cleaner and has caused a decrease in mortality rates

There is no reason why a decent nationalisation programme couldnt work. The things you mention are in the past, and lessons have been learned. And as proven the world over with the right direction can be a massive succes. And a huge boon to the countries coffers.

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2Mbs for fibre?

are they not also investing in some quicker kit at the exchanges too, appalling data rates.

Oh, thats the best we can do, unless UK gov stumps up more cash in a couple more years.

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Unhappy

BT was sold off in 1981.

Perhaps they might start being forced to act like it?

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Re: BT was sold off in 1981.

How do you force someone to provide service at a loss? They are acting like a private company - where the potential revenue doesn't justify the cost of providing the service, the service doesn't get provided.

BT and Virgin are providing service, in competition, where they can make money. Where they can't, no-one gets fast broadband. We can accept that as being what the market dictates, or if society thinks that there is a need to get broadband out to people in more remote areas a market intervention is needed - in this case a subsidy.

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More protectivism and monopoly instigation

BT are the only ones winning the work because they are the ones who run the telco monopoly / Boys club in cahoots with the governbent of this small tiny island which should have been recabled in the 90's.

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What about Virgin Media, I had fibre to the cab decades ago and BT reckon £56m is a reasonable amount for 2Mb fibre links to a small backwater down south?

can they not just give them 4G and save about oooh £55.5m Oh no as the other monopoly is in force there as well.

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Meh

Re: More protectivism and monopoly instigation

The difference being VM only started making profits this year and haven't expanded their own network significantly in a long time. They don't even have market dominance in the areas they do serve. I don't know what the answer is but neither government intervention nor VM is the answer.

EU intervention is what's helped Cornwall.

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Anonymous Coward

now this

is a good example of how not to spend general taxation. Subsidies - if any - should be going in proportion to population: don't tax the many to provide services to people who choose to live in isolated areas - or at least, if you're going to do that, don't fund from general taxation, use a hypothecated broadband tax, itemise it and make it a visible cost on people's broadband bills as "rural subsidy".

By the way a friend in Herefordshire already gets better broadband speed than an office i work in (in central London), and that's not due to office being cheap, it's due to BT rollout being dictated by politics not population density or commercial considerations.

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Anonymous Coward

Re: now this

The cost of that 'rural subsidy' would be so great that people would stop buying broadband. That's because relatively few people buy high-speed broadband even where it's available. The extra cost of providing service in rural areas would be shared between a relatively small number of people. Funding it from general taxation spreads the burden - presumably on the basis that the government investment will be more than repaid by the economic growth that such services enable.

Either that or the government made a daft manifesto promise that the market can't support and they're now chucking cash at the problem to make that promise come true.

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Anonymous Coward

Speed schmeed

I'm in Gloucestershire and there's now another 'ugly green box' along my street which delivers BT's fibre, a neighbour gets 40mbps through it but I can't see myself switching even though I only get 5mbps because my connection has no throttling and no bandwidth limits.

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