Why is BT willing to risk having to refund the BDUK State Aid?

The BT decision to backtrack on its willingness to release post code data on the grounds of commercial confidentiality may have been the equivalent of a red rag in a field of North American (i.e. uncastrated) bullocks.  INCA (the “Individually neutered cattle association”, i.e. the British definitions of bullocks) has just issued a surprisingly robust statement on the slaughter of two uncastrated calves.

On a slightly different note – I now receive the e-mails sent by Patrick Cosgrove to the members of the Shropshire campaign. There are growing number of similar campaigns. His opening comments on the impact of the latest DCMS study on the economic value of broadband led me to wonder how long it will be before one of these uses the new Rightmove  service to map the effect Broadband availability has on local property prices. I suspect that could trigger a stampede and help change the nature of debate.

I was struck by Patrick’s succinct thoughts on “Who really does run this country?”, linking to the Computer Weekly article on  the BT.

How long will it be before groups like his begin asking their local MPs how the conditions (particularly paragraphs 35 – 40) in the EU conditional approval   are being met?” 

I looked for the information website mandated as part of the approval.

If what I found is indeed  “it”, then I invite readers to ponder the following questions:  

•    Where is the detail required in para 36?
•    Who did the independent review (para 37)?
•    Who will be doing the evaluation before the next phase of state aid (para38)?
•    What happened to the  “public consultations” (para 40)

and so on?

The more interesting question is, however, whether BT has taken legal advice and concluded that, in the unlikely event of the campaigning groups getting their act together and receiving support from those prevented from bidding to address their needs, BDUK (alias DCMS and Central Government) and/or the Local Authorities will bear the brunt of any enforcement action. In other words there is little or no risk that BT will be called on to refund a serious part of the “state aid” it has received.  

If that is correct, who will the Public Accounts Committee  and/or the DCMS Select Committee seek to hold to account – given that this is related to the implementation of policy (i.e. the responsibility of officials) not the original policy (the responsibility of ministers)?

But will BT shareholders take the same view? 

Or have they already factored the potential liability into the share price? 

This is said by some analysts to currently be at least 10% below what the underlying communications business (forgetting the content operations) is worth. 

This still leaves open the further question of why BT is willling to take the risk and whether the reason for that willingness undermines (information of value to commercial rivals) or reinforces (national security and tier one operations) the case for state aid

Below is the e-mail from Patrick Cosgrove
Sent: 15 November 2013 00:16
Subject: Shropshire and Marches Campaign for Better Rural Broadband – Update 14th November 2013

Dear Rural Broadband Users,
 
1. EDITORIAL
2. MEETING WITH PHIL BENNION MEP
3. SUPPORT FROM PHILIP DUNNE MP
4. WHO REALLY DOES RUN THIS COUNTRY?
5. LINKING UP WITH BROADBAND CAMPAIGNS ACROSS THE COUNTRY
6. RURAL FAIR SHARE CAMPAIGN – A RIGHT RURAL REBELLION
7. CRAVEN ARMS JCC
8. FULL COUNCIL DEBATE THURSDAY 27th FEBRUARY
9. BROADBAND IN THE NEWS
10. EXTRACT FROM PHILIP DUNNE’S EMAILED NEWSLETTER 1st NOVEMBER 2013
 


Please reply “unsubscribe” if you do not wish to receive these emails.
 
1. EDITORIAL
 
Thisweek there has been so much in the news about rural broadband that wealmost feel an apology is due for the sheer volume in this email. Thehighlight has to be the report commissioned by DCMS from SQW Consultants whichsuggests that for every £1 of public subsidy invested in broadbandinfrastructure there will be a net economic impact of £20 by 2024. Iftrue it’s brilliant news for those who are getting connected, but surelya red rag to the 10% in the most rural areas that are being neglected,and a further widening of the digital divide. These are the places wherethe percentages of home-based business are far higher than in many ofthe areas being upgraded by the so-called “rural” broadband programme.
 
Callus cynics, but one also can’t help wondering if there’s a link betweenthe timing of this very upbeat report and the reports further down of BTand local authorities unwilling to help community broadband efforts.
 
One of the many questions we asked Shropshire Council last summer was on this very subject.
 
Q.if some communities either wish to or may have no other option but tomanage their own projects in order to receive Superfast Broadband, isthere assistance from Shropshire Council to help build local capacity?
A. CS are continuing to review all available funding options:
– Rural Community Broadband Fund (RCBF)
– European Structural Investment Fund (SIF) 2014-2020
– £250m (future government funding)
-Additional self-funded community schemes – Self dig/build and benefit.CS will facilitate any direct engagement with communities wishing toexplore this potential option.
 
This week our campaign group haswritten to Shropshire Council to ask if they would be  willing to workwith communities interested in establishing separate broadband schemesin remote areas where only 2 Mb is guaranteed, and using technology thatis better than the satellite technology we fear will be the preferredmethod of delivery for these large swathes of Shropshire.
 
2. MEETING WITH PHIL BENNION MEP
 
Thecampaign group has recently been contacted by Phil Bennion, a WestMidlands MEP, because of concerns he has received from a number ofconstituents about the rural roll-out of broadband. On 8th Novemberthree members of our campaign group met with him to discuss these. Thereare reports of that meeting here  and  here
 
Hisconcerns centred around the imprecise nature of the deployment plansfor broadband roll-out, and the apparent adherence in the West Midlandsto a single technology when EC State Aid rules, to which the localauthority programmes must conform, very clearly state that other methodsof transmitting broadband are permitted.
 
3. SUPPORT FROM PHILIP DUNNE MP
 
Anarticle by Philip Dunne on the subject of broadband and mobiletechnology has come out very strongly in support of our aims. It hasappeared twice – once as part of his regular newsletter emailing, andagain in the November edition of the Clun Chronicle.
 
Thecampaign is grateful for his thoughts on the subject and we’re in fairlyregular contact with his office, the most recent communication being toexpress concern that community broadband efforts across the country arebeing held up because of the failure by local authorities and BT torelease precise information on their roll-out plans. He has written toBT  asking what they can do to provide better information for Shropshire“given the knowledge the company has of existing equipment and cableruns.” We’re also grateful for that. We will report whatever reply isreceived.
 
4. WHO REALLY DOES RUN THIS COUNTRY?
 
Well, if you read these astonishing reports (Computer Weekly) andISP Preview you’ll realise that it’s not the Coalition government nor ourlocal authorities when it comes to the provision of essential servicessuch as rural broadband.
 
And following this announcement, onestarts to wonder if any local community broadband projects will ever getoff the ground with the help of public subsidy. It will be a greatembarrassment for DEFRA and DCMS if the Rural Community Broadband moneystays in Europe.
 
5. LINKING UP WITH BROADBAND CAMPAIGNS ACROSS THE COUNTRY
 
We’regradually making contact with campaign groups across the countrysimilar to our own . Here’s an illuminating quotation from Upottery’swebsite in East Devon
 
The (East Devon) Midweek Herald edited theletter they published on November 16 by removing the followingparagraph, which they have refused to publish:

The fact thatConnecting Devon and Somerset (CDS) and BT appear to want to keep thingshidden is reinforced by CDS/BT’s requirement for our electedrepresentatives (County and District Councillors) to sign a NonDisclosure Agreement (Gagging Order) before CDS/BT will share details oftheir broadband implementation plans with them. To require parties tosign an NDA whilst a contract is being negotiated makes commercialsense. This £94M contract between CDS and BT was signed in January 2013,but CDS will still not share details with Councillors or theirelectors, 10 months after the contract was signed, unless they firstsign an NDA. What are they trying to hide?

It has been suggested tothis website that simply knowing that the CDS/BT Non DisclosureAgreement exists is “privileged information” and it is because of thisthat the Editor of the Midweek Herald removed this paragraph.
 
Perhaps we are living in George Orwell’s 1984!
 
They’re doing a good job down in the Blackdown Hills. Take a look at their website: Including the latest news and their petition
 
6. RURAL FAIR SHARE CAMPAIGN – A RIGHT RURAL REBELLION
 
Thislink describes how over 100 MPs representing rural areas handed in ofover 100 petitions requesting a fairer statement for rural localauthorities. With better funding, local authorities would be far betterplaced to support a better broadband service for rural areas.
 
Asa campaign group we’re slightly kicking ourselves for not havingcontributed to this, but it was good to see that Daniel Kawczinskyhanded in a petition on behalf of his Shrewsbury constituency.
 
 
7. CRAVEN ARMS LOCAL JOINT COMMITTEE TO RECEIVE RURAL BROADBAND UPDATE – ALL WELCOME

Meeting on 20th November
 
8. FULL COUNCIL DEBATE ON RURAL BROADBAND 27th FEBRUARY
 
Ourelectronic petition asking Shropshire Council to revisit its prioritiesfor the roll-out of rural broadband gathered 1,208 signatures, meaningthat we may address the full Council. A date for that event has been setfor  Thursday 27th February (we don’t know the time yet). With so muchtaking place at present it’s far too early to decide what our messagewill be, but we’ll inform you well in advance, and perhaps some of youcould come along to provide support.
 
9. RURAL BROADBAND IN THE NEWS
 
(1) Talking up the UK. Really?
 
You’veheard a lot from us in recent weeks about the Public AccountsCommittee’s savaging of BT’s role in the  rural roll-out programme. Theman in charge of BT at the time was Ian (Lord) Livingstone. He has nowleft BT with a £20m share packet and is due to take up the post of tradeadvisor to the Prime Minister in July. In this article he fights backat what the PAC had to say, and also states that “It is just a shamethat a number of people in the UK don’t want to talk up the UK”.
 
Willhe do anything to talk up the rural economy when he takes up his newpost? Without decent broadband, the rural economy, if not dead willcertainly be sickly.
 
(2) Base broadband plans on need, not on ease of installation
 
TheBroadband Stakeholder Group (BSG) has published a report outlining anew way for measuring and forecasting demand for bandwidth in UK homes.The group called for greater policy attention to be given to how demandrelates to infrastructure provision.
 
Thisis just a slightly more professional way of asking for what thiscampaign has been calling for: an infrastructure that is developedaccording to the needs of users rather than ease of installation.
 
(3) Tory MEP expresses concerns
 
Lastweek we reported that three Conservative MPs had been asking  awkwardquestions about the rural broadband programme in the House of Commons.This week it’s James Elles, a Conservative MEP from the South-east who’sexpressing reservations.
 
(4) IF BDUK HAD LISTENED TO EINSTEIN
 
(5) TELFORD
 
Apparently Telford is the first part of the country where broadband speeds are about to exceed the 24 Mbs superfast threshold.
 
(6) A helpful overview from Computer World Magazine
 
If Telford has the fastest broadband, Llandrindod Wells, Hereford and Shrewsbury have the slowest.
 
(7) More on the potential for 4G.
 
This article is a few weeks old, but entirely relevant. 
 
And  in this one Dan Rogerson, the new minister at DEFRA with the rural brief for broadband, also extolls the virtues of 4G.
 
And in this one, OFCOM pledges to improve 4G coverage for rural areas.
 
While in this one the head of mobile giant EE, slams the government for itsobsession with fibre at the expense of 4G technology.
 
(8) Imitation is the greatest for of flattery
 
Butquoting directly even more so. This is from Ian Grant’s Br0kenteleph0nblog for Wales (why isn’t that ‘Br0kentelef0n’, Ian?). Supporters on theother side of the Teme should add this website to their favourites.
 
10. EXTRACT FROM PHILIP DUNNE’S EMAILED NEWSLETTER ON 1st NOVEMBER 2013
 
“Asthe 21st Century has progressed, the uptake and reliance on digitalmeans of communication has been dramatic. Most of us use mobile phones,and almost all of us now use email or the internet for communicating viaemail, online shopping or banking. Television has become digital andradio transmission is too.
 
We need to ensure that rural areas are not left disadvantaged as we move into this digital age.
 
TheGovernment has committed to increasing broadband rollout within the UK,meaning that an estimated 90% of all households will have superfastbroadband by 2016. In Shropshire, I have campaigned for rural access todigital technology for years. Shropshire Council are working hard withthe Government’s delivery agency BDUK and BT, alongside other commercialsuppliers, to provide broadband at a minimum level of 2mbps for homesand businesses. The vast majority of these properties, some 93% will beserved by fibre, 87% of which will receive superfast speeds of at least24 mbps.
 
But I am also working with local campaigners tomaintain focus on improving provision to all those in remote rural areasof South Shropshire who have missed out. The development of broadbandin Shropshire is increasingly important. We already have one of thehighest proportions of home workers in the country. I know through myregular advice surgeries and recent Jobs Fairs that there are manybudding entrepreneurs across the constituency. These aspirational peoplecould be growing their businesses through exploring new online marketsand suppliers, creating new investment and jobs for local people and inthe process growing prosperity in Shropshire. We need to ensure thatbusinesses have the platform to succeed here, and that meansconnectivity.
 
Mobile telephone network coverage faces similarchallenges. I know only too well from travelling all over the Ludlowconstituency how many areas within South Shropshire suffer from lack ofmobile signal coverage. With the advent of 4G technology, if we are tomake Shropshire as business and consumer friendly as possible, mobilenetwork coverage and broadband are two issues we must tackle now. Atpresent there are still an estimated 1,300 properties in Shropshire withno network coverage from any provider. So this Government has recentlylaunched a Mobile Infrastructure Project with funds available to providenetwork coverage to rural areas. In the Ludlow constituency, Councilwards identified for better coverage by 2015 are Brown Clee, Chirburyand Worthen, Clun, Corvedale and Highley. Better provision of mobile andbroadband networks will allow local residents more choice and makeswitching to a different provider or tariff easier. For many of us, thechoice over what company we choose for our mobile phone is dictated bythe best coverage we can receive in our home or place of work. Morecoverage will mean more choice, helping to offer better value for theconsumer. We need to keep Shropshire open to all kinds of business,promoting more choice and better services for residents at the sametime. Improved mobile and network coverage will help bring growth, jobsand tourism as well as wider accessibility of modern public services toour area. Action is needed now to ensure that Shropshire does not fallbehind in future”.
 
From Patrick Cosgrove
On behalf of the Shropshire and Marches Campaign for Better Rural Broadband

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