Training for jobs or jobs for trainers: the proposal for an apprenticeship levy

| No Comments | No TrackBacks
| More
The deadline for submissions to the consultation on the implementation of the apprenticeship levy programme announced in the budget is on Friday. The questions asked indicate just how flawed the proposal is. As I said when I blogged on the skill proposals in the budget, the case for a return to 1970s style levies and grants is based on a model of off-the-job training which has been made largely obsolete by the rise of on-line distance learning and assessment to global, as opposed to UK-centric standards. The "killer" statistics used to justify the proposal (Figure 8 on Page 20 of "Fixing a Broken Training System) effectively "blame" the rise of employer driven Sector Skills Councils for a collapse in the number of "employees attending training outside their workplace" (alias classroom based FE Courses). They should instead be used to "blame" the Internet for changing the model of training used by those employers who take skills development seriously.      

The proposal distracts attention from better ways of addressing our skills shortages and may help accelerate the trend to rely on supposedly skilled immigrants rather  than consider those who are the "wrong" sex or colour or from the "wrong" University let alone retrain those whose legacy skills are no longer in demand or who are seeking to return to work after a career break.

I sympathise with those in the Sector Skills Councils who have been tasked to get employers views on how to try to implement this sadly mislead proposal and apologise for not making time earlier to ask those of you who read this blog to respond to their attempt to get employer inputs. I also strongly suggest you respond to the main BIS consultation. My own response, typos and all,  is already available on-line . I would like to congratulate who-ever organised this facility as not only a welcome extension to open government and but also an encouragement to more rigorous proof-reading.   

We regularly see headlines about skills shortages and hear employers complaining they cannot get the skills they need. Meanwhile they recruit supposedly skilled staff in India  rather than unemployed UK graduates who are the wrong sex or colour  or from the "wrong" university . Few even consider retraining those whose legacy skills are no longer in demand or who are seeking to return to work after a career break.

The problems are not new. 

Studies every few years use much the same analyses to produce much the same recommendations. Few are ever implemented. Bottom up skills initiatives that succeed in meeting the needs of local employers, like the TOPS programme or City and Guilds 726, are killed off because they place students into jobs instead of onto other courses. Meanwhile schemes based on "national figures" often fail to fit local needs because so many "travel to work" communities do not fit "the national average".  Publicity for success, to enable it to grow organically, is commonly limited by the way public funding programmes work in practice. The problems are compounded by the rarity of business models that facilitate funding across the public-private divide from the recruitment/training budgets of employers or the agencies they use, let alone across the budgets of different funding agencies.  

Hence my previous Groundhog day blogs leading up to the question of who really wants to break out of the comfort zone of Groundhog day and turn the UK into a global skills hub. 

But there is good news. The Government has set ambitious targets although arguments about how to avoid a return to the failed training levy and grant mechanisms of the1970s are likely to prove a distraction from meeting these. We have a large and growing number of national and local skills programmes: from work experience, internships and careers guidance through and apprenticeships and vocational degrees to continuous career development and returner programmes. Some are excellent. But few MPs, employers or those providing or seeking careers advice, understand how they fit together, let alone which are likely to succeed, where or why.

Experience indicates, that success correlates with a focus on local needs - because these vary so widely: from areas where employers are competing hard for talent,(including trainees, (such as the Thames Valley) to clusters of high tech SMEs, needing fast-changing, innovative skills, adjacent to areas of high youth unemployment (such as Shoreditch and East London).  SMEs in some industries now require all employees to have digital skills. Others need only one or two support staff. Rural areas often have high tech clusters, (like Suffolk with Martlesham). Then there are the new towns, (like Telford). 

The information needed to plan and/or improve activity to meet local needs resides with a mix of local authorities and the employers active with the national and local sector skills councils. Hence the need for a bottom up look at strategies for achieving the government targets and creating a workforce fit for the evolving and changing needs of the 21st Century 

I am therefore working on the pilot for a programme to help MPs make sense of what is happening in their own constituencies so that they can work with their local authorities, local employers and local schools, colleges and universities to achieve results. Given the pressures on their time and the effort necessary, that means identifying employers who employ staff across the UK and professional bodies and trade associations who are willing to encourage their local staff/members to help their constituency MP, and his or her staff, to stimulate local action. That action may be very different according to local needs and whether there are already vibrant local partnerships.              

The immediate objective is to identify no more than three or four pilot constituencies to test the concept. The current shortlist, based on volunteers to date, includes Kingston and Surbiton, Telford, Eastleigh, Northamptonshire and Devon. Please let me know if you would like to help. I am particularly interested in hearing from employers who want to use the opportunity to improve their choice of local recruits - of all ages and backgrounds.

"On-line Age Checking - the time has come": why it matters to YOUR business

| No Comments | No TrackBacks
| More
When the Prime Minister David Cameron reiterated his pre-election pledge to "curb access to pornographic web sites by under 18s" there was a widespread assumption that this only mattered to those providing access to such websites. I recently tried to explain why the approaches that would be used have the potential to transform the business models for  advertising funded services. It is not just that almost every on-line retailer and content provider is potentially liable if they facilitate product (e.g knives, alcohol or tobacco) or content supply to those who are under age.

There are a growing number of businesses who need to check that customers are within a given age range (e.g. over five and under thirteen, over 60 or 65, etc.) but face a backlash (e.g. 2/3rd or more of transactions abandoned) if they ask questions which are seen as intrusive by those who no longer trust those they have never meet. It does not matter that some of the latter make irrational decisions, downloading apps which monitor their every move, while getting upset at the thought that their phone number and address might be in the hands of a stranger when all they wanted was to "prove" they were old enough to enter a night club.   

Next week you have the opportunity to hear from those more expert than me as to why the tone of debate and the business models being considered by major on-line advertisers and retailers have changed over the past few months - and the implications. A world class line-up of speakers and panelists has been assembled for the seminar on On-line Checking next Tuesday (22nd September).

The format is unusual in that those from all sides, including politicians, on-line service operators and product and service suppliers have been juxtaposed in panels to discuss the issues, implications, business case and practical implementation.

The event opens with scene setting presentations from the UK Minister Baroness Shields of Tech City fame) and the relevant Head of Unit from DG Connect in Brussels. The panelists for the "proof of concept" discussion range from Mind Candy and JISC (hub for the UK educational networks) to OIX (the hub for HMG identity policy) and ISOC (where the issues are discussed globally). When it comes to the panels on data sources, business cases, links to payment and safeguarding, the participants include  the Post Office, Barclays, Payments UK (the trade association for payment service providers), NSPCC, ATVOD (the content regulator), Equifax, Yoti (one of simplest and most disruptive of ID business models), Portland TV, Telecom2 and the Better Regulation Delivery Office.

There is not much time left event and the event is remarkably inexpensive (to enable social enterprises and cash strapped Fintech start ups to attend). I therefore recommend booking immediately. If you fail to do so you risk getting caught out when your complex and expensive  Identity and Access management "solution" is rendered obsolete before you have got it working. Cheap, robust, anonymised age checking services are not just a way of placating politicians and parents. They "threaten" to transform the on-line world.  

Responding to the revolt of target audiences against on-line advertising linked to data mining

| No Comments | No TrackBacks
| More
Recent surveys indicate that the "Millennial" generation is losing faith in the security of on-line players in the face of the growing flood of data breach stories. Those who stick their heads in the cloud of collective wisdom lack credibility compared to those who respond positively to the concerns of their users. The Amazon ban on Flash Adverts, because so many users are now blocking them because of security and response time concerns ,indicates how major players are responding to changes in customer behaviour. This also helps explain interest of major US players, from Disney to Playboy in the UK idea of using one-way data minimisation services as the basis of anonymised but robust age verification - to serve those who see no need to give their personal details to some-one they neither know nor trust, in order to visit an age-controlled website. I blogged on the business case back in April and was delighted when the Prime Minister not only made mandatory age verification, in the case of access to pornographic websites, one of his election pledges but repeated his commitment after the election.

That is only one of the use cases, but it gives a cutting edge to the approach now being explored by the DPA Age Verification group (e-mail DPA to join) in a BSI PAS. This has growing support from large internet advertisers: from childrens' games, entertainment and education providers, through on-line gaming and adult entertainment, to those giving discounts to old age pensioners.  The concept is simple: why should a girl who wishes entry to a night club have to carry a passport, potentially giving her name and address to the bouncers, when she need only carry a photopass with a QR code (such as provided by Yoti) which they can scan and their app will show she is over or under whatever the age is for admission. Feedback from mainstream credit reference agencies and financial services identity providers in providing necessary support infrastructure indicates that the concept can be applied cheaply and reliably on-line. Given that their business models already depend on combining, low cost, rapid, secure response (often while transactions are in progress) with higher levels of security than are achieved by almost any government agency, the consequences are profound.

Hence the growing interest in an event on 22nd September where the idea will be publicly explored. The presence of Mind Candy (alias Moshi Monsters) and Equifax among the lead sponsors indicates the range of serious commercial interest. The range of speakers indicates how the issues go to the heart of not only child safety but of national and international on-line identity strategies. They speakers include Baroness Joanna Shield, (once the Tech City Champion, now the responsible minister), Peter Wanless, (now CEO of the NSPCC) and Peter Johnson, (CEO of the on-line content regulator ATVOD). But they also include Don Thibeau, founder and prime mover of OIX, which lies at the heart of the Cabinet Office ID strategy, Pat Walshe (on the Kantara initiative) and Robin Wilton (ISOC global outreach Director for Identity and Privacy).

The event will be structured as a series of discussions which are expected to not only provide feedback into UK and EU political and regulatory policy but also into the commercial policies of some of the world's largest on-line advertisers: from drinks, gaming and entertainment to on-line retailing (anyone whose product lines include age-controlled products) as whole. I suspect this may prove to be one of those seminal events that has a global impact. Book now or else for-ever hold your peace.    



The politics of access and wayleave charges or "Why it costs BT so much more to build a better network"

| 3 Comments | No TrackBacks
| More
The difference between the costs quoted by BT for upgrading its legacy network and those quoted by its competitors for building new fibre networks puzzles those in Devon and Somerset who compare the compare the deal their council was being pressured to accept with those made by Gloucestershire and Berkshire with Gigaclear. They are right to be puzzled. It is not just because BT is saddled with cross-subsidising UK Sport and overhead charges which can treble its civil engineering costs. It is also at a massive disadvantage when it comes to access and wayleave charges, It is not easy for an outsider to unravel its costs but it appears these may well account for over half of them (and those of Virgin, Vodafone, EE or the other Mobile Operators) when it comes to new build, whether urban or rural.

Hence the pressure to update the Electronic Communications Code. But this will address only a fraction of  the difference. The national agreement with Country Land and Business and the National Farmers Union, allows farmers to waive charges in return for services to themselves or the local community. This has been used by at least one of the "great estates" to provide better (fibre-based) services to rural business parks and other tenants than is available to its inner London properties. Far sighted local councils may allow similar uncharged use of their wayleaves, buildings, street furniture and in-house communications infrastructures (including CCTV, traffic management etc.)  in return for service. Until Ofcom allows BT to exploit the opportunities available to its rivals, cannot match such deals. Its only option is to form partnerships with those who can. I hope to hear something of its plans to do so when I attend the INCA event in Bristol on the 15th and 16th September.

Even where BT has existing infrastructure sharing arrangements, as with the electricity companies, and wants to replace copper with fibre, it is charged fancy prices - because the electricity companies do not wants its engineers up their poles. There are similar problems with access to city centre rooftops on the part of mobile operators - because the risk of business disruption caused by damage to the equipment already there, perhaps serving high value applications in the building below, far outweighs any revenue.

Hence the need for a new look at the constraints on BT and go beyond "one size fits all" access and wayleave arrangements. When that happens we can cut the current estimates of the capital cost of replacing copper by fibre and of replacing mobile and wifi notspots by ubiquitous high bandwidth mobile (4G and 5G) by at least 50%, perhaps by as much as 75%.

The good news is that much of the necessary spadework in already under way. back in February I referred to the first meeting of a group of property owners and network operators to look at wayleave and access agreements that are suitable for inner city buildings in multiple occupancy. There are a number of issues to be addressed but the core message was that the value of giving tenants a choice of world-class services was far greater than any likely rental, but so too was the cost of any disruption to the services used by existing tenants. Several operators had, however, already agreed contracts with some some of the "great estates" and were willing to share these. With support from DCMS (a most helpful letter from the Minister commending the approach to other relevant players), a subsequent meeting decided to pool efforts with an exercises being organised by some of the London Local authorities consortium and the result is an exercise to use the BSI PAS approach to produce a package of agreements and clauses that will, hopefully, meet most situations and be suitable for adoption as guidance by players like the Law Society, the RICS and RIBA. If so, co-operation - with Ministerial support - will have achieved far more than legislation or regulation.

I am hopeful that the same group will also take a look at producing similar guidance for landlords and property developers regarding the equipment and cabling space they should allow for for the communications networks that will be needed to serve the tenants of "future proof smart buildings" - including rolling upgrades as tenants change, not just renovations and new build.

I hope that some of the great estates and landlords, not just property owners, will use the opportunity of the INCA event in Bristol to explore the potential for also co-operating with network operators and local authorities outside London so as to get better connectivity for their tenants at lower cost. In this context I include social as well as commercial and industrial landlords because providing low cost, high reliabllity fibre connectivity can help slash the cost of overcoming social exclusion and bring employment back to sink estates.            

Its not rocket science, just a WAN in a hostile environment

| No Comments | No TrackBacks
| More
It was delighted to see the reference to Gigaplus Argyll in the article on Nicola Sturgeon's launch of a new funding programme for rural broadband, funded from the state aid clawback mandated by the EU. As previous readers of this blog will know, our family croft is in the area to be served and I registered our interest some months ago.

One of the topics of discussion when I was on Mull earlier this month, (while waiting in vain for a data signal from the mast on the other side of Loch Scridain or a download over the wifi in the local pubs in Bunessan and Fionnphort), was the logistics of getting a signal to the Ross Of Mull and/or Iona. Local connectivity is not a problem, our neighbours have all the digging and trenching kit necessary for laying fibre and, as the B4RN team might say, building the network is "not rocket science, just a WAN in a hostile environment".       

Apparently the plan is, however, to trunk a radio service over the centre of the Isle of Mull through the area where the signals for the current BT, O2/Vodafone and terrestrial TV services are regularly degraded by storms and/or the equipment "taken out" by lightning strikes, pending the arrival of repair crews from the mainland, days or even weeks later. Hence the reason for basing support and maintenance for the new service on the island. The most hostile part of the environment for any community broadband service is, however, political - hence the importance of INCA and events like that in Bristol on the 15th and 16th September 

If you are having problems with your broadband (urban or rural), write to your MP suggesting he ask who your local council is sending to the INCA events in Bristol to learn how to provide better service at lower cost, help attract the jobs of the future and promote social cohesion by: 

  • getting better value from their existing BDUK contract 
  • going out to competitive tender using the clawbacks available under that contract
  • offering access to the council's own infrastructure and wayleaves for next generation networks and providing help with planning and regulation.    

Transforming broadband across the UK - not just Bristol

| No Comments | No TrackBacks
| More
The transformation of the UK broadband market over the past year is illustrated by presence of BT, CISCO, Microsoft, Virgin and Vodafone as well as City Fibre, Gigaclear, Hyperoptic ITS, Metronet, Callflow and Satellite Internet at an event that was originally intended to help use enhanced take-up of the broadband vouchers to pull through the City of Bristol's plans to leapfrog Manchester and Leeds, let alone London, as a hub for inter-active media development and on-line creativity.

That event has now grown into a one stop briefing that is ideal for for the senior officers and  politicians of any local authority, from parish to city or county council and those landlords and business park owners who are looking to work with their local Council or LEP to provide 21st century connectivity for their tenants. I also commend it to large business users who are getting pissed off with the way their needs are being ignored by those who assume they afford leased lines for their many sites (some on every high street or forecourt) and home-based users (who may need secure, inter-active global access to complex design and technical information). It should be a great opportunity to make contact with policy makers who might listen, as well as those who would love to be on your short list of delivery partners or alternative accommodation sites. 

On the morning of the 15th there is a half day workshop on the voucher scheme for local business followed by a technical showcase (in the afternoon) with many of the potential suppliers and operators. I plan to use the showcase to check whether, as I have been told, all the new suppliers are using IPV6 compliant equipment: i.e. the conversion problems are to do with the legacy equipment and systems of the incumbent operator plus, of course, the legacy applications that major fintech players (for example) are anxious to start converting and testing before they are shredded by overseas competitors.    

On the 16th there is a get together of almost all the major players, including the CEO of BDUK, the heads of Broadband Policy for DCMS and BT and the CEOs of many of the alternative network providers. The latter now appear to be in a position to provide local fibre or high speed wireless connectivity to most of the UK for rather less than is currently being quoted by BT. I say "currently" because I anticipate that we may hear that BT is about to change its approach and work with alternative network providers rather than compete.

There is a good reason for such a change of strategy on the part of BT.

It is, financial, akin to the reason why Telia became largest customer of Stokab instead of trying to block a shared municipal network, as BT did with Birmingham. BT and Virgin quietly dropped their case against the Commission for approving the Birmingham plans, because neither can afford to upgrade all their fixed, mobile and wifi infrastructures (including those needed by EE) to give adequate service to IPTV customers, at the same time as subsidising the salaries of the premier league footballers and other sportsmen on whom they are relying to attract new customers. Virgin is about to double its broadband speeds but also appears to be looking at partnerships akin to that which Talk Talk and Sky have in York. Meanwhile, the rocketing traffic being generated by local fibre operators, let alone wifi hotspots and 4G services, is placing increasing strain on BT's creaking back haul services and it is losing business contracts, like the Defence Fixed Telecoms Service.

It therefore makes sense from BT to focus on that which it does best - provided Ofcom allows it to make money from doing so - i.e. regulating on price and competitive behaviour and not return on capital.

If so, we can predict the consequences.

As in Sweden, the networks of future will be organised and paid for by communities which want globally competitive connectivity, while the former incumbent focuses on linking these to the outside world. Over time it then takes over the operation of the local networks: commonly under contract, so that it does not have to spend shareholders funds to buy them out. Interestingly Teliasonera not only now runs Stokab but disposed of its context operations on the way. This is also akin to the way the UK telephone and telegraph network were created in the first place - municipal enterprise that was nationalised only so that the government could eavesdrop during the run up to World War 1!

As with other INCA events, that in Bristol will be a great opportunity to listen to those who will be crating that future (or another one, or a kaleidoscope of competing futures!). I therefore look forward to meeting representatives from local government who are looking to use the event to learn how to get best value from the 129 million, and rising, of state aid claw back (required by the EU before it would approve the BDUK contracts), and to ensure that local access to world class broadband helps their residents get the jobs of the future, not just surf the net a little faster or watch a wider selection of sport over their smartphone instead of their TV or PC.  

The event is, of course ideal, for those authorities looking (as all should be) to go to open tender to serve those left out of the broadband extension plans to date. The scale of the claw back indicates that the 5 million of broadband advertising paid for by BDUK was not wasted state aid - provided of course the resultant claw back is not simply handed to BT. If it were, we could see a number of global law firms having a field day at the expense of BT, HMG and/or a selection of local councils . It is, however, also apparent that the claw back is geographically uneven. Those councils which drove hard to secure both rapid roll out and subsequent marketing and take-up, (not just spend and the achievement of nominal targets for properties theoretically passed), look set to get most. Those which go out to tender and are robust in their response to attempts at arm twisting can also be seen to have got better service from BT (as happened with Essex). It will be interesting to see what happens with Devon and Somerset now that their small business communities have become engaged alongside local MPs.

I have enjoyed watching INCA grow from a collective of vociferous community broadband enthusiasts into an embryonic trade association with almost every would be community broadband provider (from B4RN to BSkyB) in membership or in the process of joining. I also look to hearing more about its planned services to help Councils get better value for money 

However, one of my main objectives in Bristol will be to pick up ideas to help the candidates for Mayor of London to offer credible policies to prevent the "Southern Powerhouse" from falling behind its global competitors when it comes to business and mobile connectivity. I have nothing against the other Cities of the United Kingdom trying to leapfrog London into the 21st Century. I would just like to see London return the complement - so that municipal enterprise and competition helps achieve what state planning never has - world leadership of the type we had in the 19th Century.   

The Ashley Maddison hack illustrates why third party cyber- liability is now as uninsurable as IPR theft

| 1 Comment | No TrackBacks
| More
A couple of weeks ago I blogged on why insurers regard Big Data as the new asbestos: the source of massive claims triggered by the leakage and legacy of a useful but widely misunderstood and mishandled technology. I referred to the importance of the Long Finance study on cyber reinsurance that was about to report.

The report is now available on-line and I strongly recommend that CIOs (let alone CISOs) read it before it is drawn to the attention of their CEOs and main board directors by the company secretary. The Lloyd's Market Association Cyber Attack Exclusion Clause (CL380) and the Non-marine Association's Electronic Data Exclusion Clause NMA2914 probably mean that the organisation is no longer covered for cyber-risk. Serious cover for cyber-related property damage, business interruption and third party liability is difficult to obtain at reasonable cost, especially for a financial institution or an on-line retailer. Damages for the theft of intellectual property are also probably uninsurable.

The John Herrman's blog entry "Welcome to the first day of the rest of your internet", takes quick look at the consequences of the on-line posting of the data hacked from Ashley Maddison . These can be placed in context by the growing press cover of the leaked details. for analyses. The potential for legal action illustrates why the cyber insurance now on offer (sometimes called "cyber gap insurance") is commonly now confined to the legal and administrative costs of notifying customer in the event of a breach market and/or the implementation of a pre-agreed incident management plan. The total UK cyber insurance premium income for this market is said to be little more than the $148 million (barely 25% of which was covered by insurance) of provisional costs included in Target's second quarter results last year for a single data breach.  Those who think insurers will be impressed by "maturity models" should consider the way that Apple's controls were bypassed in the course of the Celebgate affair. They are more concerned about who might attack the organisation and/or system and why.

Now let us look at the growing scale of the breach of the US Inland Revenue Service systems. The underlying causes of the feuds between the Government Data Service and the rest of Whitehall become to become apparent. The enthusiasm of the GDS greatly impressed the  the digerati but not those concerned over the potential of using services like Verify to aid  serious fraud or their ability to more reliably identify the socially and digitally excluded or semi-literate (i.e. users aged more than about 35, let alone those over 65) than the derivations of the legacy alternatives used by the banks and those handling medium to high value transactions.  

How long will it be until evidence of the growing erosion of confidence in the security of the on-line world , coupled with the inability to insure against third party liability, leads to serious collective attempts to provide users with the protection they want.  Until then the arguments in the Long Finance report for a Cyber-Catastrophe Re-insurance pool (to handle systemic risk) should concentrate the minds of those, like main board directors, who are being expected to take responsibility for the irresponsibility of digital enthusiasts.who have forgotten the need for "user friendly" systems that are secure by design - not by afterthought or accident.  

Polite but deadly: The nails are inserted into the coffin of the BT Openreach Monopoly on the Today programme.

| 3 Comments | No TrackBacks
| More
Joe Garner, the latest CEO of Openreach, put up a competent defence when interviewed on the Today programme this morning in a follow up to the listeners' complaints covered on Saturday. His answers, nonetheless, indicate that it is probably only a matter of time before alternative suppliers, from Gigaclear to City Fibre replace BT as "infrastructure supplier" of choice for communities where there is a critical mass of business users who need (and will pay for) fast, reliable, world-class connectivity. If so, we can also expect current quad-play models to be amended with "infrastructure suppliers" offering menus of content providers - akin to the choice of search engine or browser on your PC. The way Ofcom uses its powers to ensure effective and informed consumer choice will, however, be critical. Hence the importance of its Strategic Review and the need for a wide and balanced range of inputs - not just "the usual suspects". .  

Garner's comment that services to the final 1%

Checking emails cartoon -Kipper Williams - Permission granted by Upottery PC.jpg

can never be economic, because some do not even have a power supply, led to questions by Justin Webb about the connectivity on offer to Birmingham, Bristol and South London: on which Bob Neill MP for Bromley and Chislehurst (and chair of the new all-party group for London) has requested a meeting with Ed Vaizey . Meanwhile one of the Conservative Candidates for mayor, Syed Kamall MEP already has London's mobile and wifi not-spots on his agenda.

I have been catching up on e-mails since returning from a break in our family croft, with line of sight to a mobile mast on the other side of Loch Scridain but no mains power supply (we use solar panels and a generator for lighting, power tools and charging the batteries of laptops and smart phones). Until a few years ago I could access e-mails (albeit slowly and with frequent restarts). Now, thanks to modern bloatware, even my smart phone cannot download more than the headings - on those days when we can get a data signal at all. Meanwhile in the local wifi hot spots it is common for my mobile to indicate "emergency phone calls only" and the pub wifi is, at best, too slow for a Windows 8 laptop. The area is outside BT's upgrade plans and I have registered with Gigaplus Argyll.The situation was little better across most of Dumfries and Galloway, where we took a break on the way home, although my son (who had joined us for a couple of days) was finally able to complete his Fantasy Football entry over a wifi connection in Kirkcudbright. This time webdid not even try to use our mobiles on M6. 

Things are, however, beginning to change in a number of directions - particularly with regard to availability of those competent to install and maintain modern networks. Joe Garner said in the Today Programme that BT Openreach has been expanding staff training in order to reduce reliance on sub-contractors (implying that competition for the latter had become a problem). Meanwhile HyperOptic switched to training their own installation and maintenance staff because of quality, as well as availability, problems with sub-contractors. This has had the added benefit of a sharp improvement in relations with property owners and managers and in the willingness of the latter to not only enter into access and wayleave agreements but to take the initiative in opening discussions on the provision of fibre, whether to high-value tenants who want world-class access or to "social" tenants who need reliable, low cost support. There is a message here for those who expect government legislation to help solve their problems with access to buildings and/or rooftops in order to address urban not-spots. 

"World class" raises the question of IPV6. The lobbyists for the main networks still claim there is no demand and Ofcom has said it is not necessary while promoting technologies for which it is essential. Meanwhile players like IFB have to meet the needs of their Oil and Gas customers in Aberdeen who are standardising globally.  There are signs that a similar situation is about to happen in London, with innovative Fintech companies, moving direct to IPV6 in order to met the needs of emerging markets, putting those with legacy applications to convert at a significant disadvantage. Until this month, the bulk of UK IPV6 traffic was over JANET and volumes reflected the academic terms. That changed with the launch of the Sky pilot. Traffic is already double that of any previous month this year and mounting. So what is in it for Sky customers?  At the basic level, they get up to 40% faster response from those applications, like Facebook which have already converted.

In short the digital divides in the UK have been deepening over the past year, leading to ever more anger on the part of those left out of current programmes. Those divides may, however, be about to change with those deploying lower cost, higher reliability fibre networks also transitioning their customers to IPV6 as part of the connection process. If it is correct that the INCA members presenting in Bristol later this month could provide fibre to 17 million UK customers, provided they are given a level playing field (and thus access to commercial finance), then those stuck with Openreach could end up on the wrong side of the divides.

I doubt that will happen because the shareholder pressure to break up BT and halt the cross subsidy of the Premier League would be irresistible. But "we live in interesting times" and the impending mix of consultations and select committee investigations will give plenty of opportunities for muckraking and mudslinging. Meanwhile also we need to quietly expedite the incremental UK transition to IPV6, lest we face a very expensive hiccup around the end of this parliament. It helps that almost all the equipment installed since the last election is compliant. The problem is the address lengths in the application software - a bit like the date lengths that caused the Y2K non-problem. The solution is the much same - a boring but essential audit job to ensure that no users experience problems. The difference is that this can be taken over time, provided the main ISPs have converted. The good news is that sharp rise in IPV6 traffic over Sky after it took a lead may well concentrate the minds of others. The bad news is that some parts of the UK, like the City of London, may well have less time than we think.   

The immediate headline question is, however, "How many of the councils in receipt of the BDUK state aid clawback (130 million and rising) will use that to go out to open tender for proposals to meet the needs of the final 5%?".

If BDUK learns from past experience and BT is forced to compete openly for the resultant business, we are likely to see a variety of different funding models emerge, including local partnerships involving BT and its main competitors where they need to co-operate in order the provide the performance and resilience needed. At this point the requirements of some regulators for critical systems to be backed up over networks that may well (and should) inter-operate but are not critically interdependent, should be used help preserve competition.



Is Big Data leakage the new Asbestosis: uninsurable? If so ....

| No Comments | No TrackBacks
| More
There is a growing gulf between those who think insurers should give discounts to those who  follow "best information security practice" (whatever that is) and underwriters who have been burned by breaches at US retailers (for example) with supposedly "mature" approaches to security. "Cyber" is now routinely deleted from mainstream theft, business continuity, libel or product, professional or director's liability insurance and underwriter are more concerned whether the operation is at risk of a sophisticated attack using insiders (innocent or otherwise) to bypass technology-based defences.
Most of the policies on offer cover only the cost of implementing a pre-agreed incident management plan: e.g. to minimise the damage when customer data, content and intellectual property right are compromised or a network or cloud goes off air, whether as a result of criminal activity, terrorism or digititis. The reason is the cost of recent US data breaches: $200 per record compromised: to notify those at risk, reissue credit cards and make the changes necessary to retain PCI-DSS status. There is also a test case which implies that, in the absence of evidence of actual financial loss, $1,000 (or pounds) is a reasonable figure for the hassle and distress to an individual whose personal information has been compromised. Now consider the potential cost of a data hack on an organisation where the identity of the users, let alone their credit cards, personal records or transactions is sensitive - such as : AshleyMaddison.

For all the talk of "Big Data" being the new "Oil" and "Cloud" being the way forward, it is now almost impossible to get insurance cover for the potential third party risk taken on by those who accept liability. And why should any of us trust those who do not .[Hence also the big question mark over the value, if any, of identities issued or recognised by government

Now let us take a quick look at the murky world of product liability where software has long been excluded as 'service" not a product" but is increasingly embedded in products. The well-publicised use of hacking into an in-car entertainment system to take charge of many of the controls illustrates the risks now being run with the world of interconnected (and insecure) everything. No wonder insurers are steering well clear.

Meanwhile the value of using "Big Data" to support the current surge in on-line advertising has been called in question by reports showing that almost half is blocked and three quarters is designed for PC users while well over half the target audiences already spend most of their time using smart phones. The backlash is under way.

That message has yet to spread from insurers to the world of "Big Data" enthusiasts, eager to collect everything possible about current or would-be customers. But the EURIM (now DPA) studies before the 2010 election on the Unlocking the Value of Information and Security by Design are now most apposite. The current DPA exercise on the use of data minimisation routines for Age Verification has strong government, as well as growing industry support: see the Hansard report of the ministerial response on the second reading of Baroness Howe's Online Safety Bill 2015

The good news is that players like IBM and BT are making massive investments in security training and services, not just security technology. The figures for IBM are not public but BT already employs six times as many full time security staff (3,300 in total, 1,700 the Security Division) in as Google (500) and its Security Academy (lead sponsor of the Cyber Security Challenge schools challenge) is by far the UK's biggest "cybersecurity" trainer outside GCHQ and the Defence Academy.

Hence the importance of the Long Finance "Cyber Catastrophe Reinsurance" study to the wider "Digital" Community, not just to the participating insurers and those who work with them to help manage and reduce risk - as opposed to those who merely sell cyber-security snake oil to the rest of us.

Minister urges business parks to bypass BT and organise their own broadband

| No Comments | No TrackBacks
| More
On July 13th the House of Commons had another Broadband Debate, this time introduced by Dan Poulter, on how BT was meeting the numbers in the BDUK targets for Suffolk, but leaving a wave of complaints, particularly across his constituency, because of how it was doing so. I recommend you read the full account in Hansard. It again illustrates the shortcomings of using government money to simply fund the extension of BT's 21CN network (designed over 20 years ago when X25, not IP, was expected to be the "future") to meet the needs of those being excluded from the Internet Age. The way in which engineers were moved to other counties as  soon as the targets were being met was probably because BT was resource limited. If so, that opens up the question of whether others could have filled the gap then, or now. If BT is still resource strapped (finance as well as people), that adds another dimension to the Ofcom review and also the CMA review into the BT-EE and O2-3 mergers (submissions due by 25th July).

The report in Thinkbroadband on the Suffolk debate illustrates how Waveney benefited from the initiative led by Peter Aldous but his intervention in Hansard on July 13th showed how annoyed he is that some of those who attended the meeting in Beccles at which he launched his broadband campaign, back in April 2011, have still not benefited - even though the nominal targets have been met.     

One of the issues has been the treatment of business customers. The response of the Minister, which I have paraphrased in the heading to this blog was:
"Business parks and industrial estates are also an issue that we negotiate regularly with BT. Again, the issue is somewhat balanced. It surprises me sometimes that business parks do not take it into their own hands to provide superfast broadband for tenants. The market is replete with numerous business suppliers of broadband. As we found from our business voucher scheme, which has connected 25,000 businesses, we have more than 600 registered suppliers all over the country that are more than willing to provide superfast broadband. Business broadband is a different beast from residential broadband."

Those who disagree with his analysis should contact the many would-be suppliers to help them with evidence to the Ofcom review.

P.S. I have been told that the Corporation of London has just issued an invitation to tender for a wifi concession two months ahead of schedule but now expects to take nine months over the process. Meanwhile other London councils, whose processes took less than three, will have their services operational.  I am awaiting details, including why the City is so different.

P.P.S. The majority of stockbrokers still show BT as a "buy" and I am not selling mine yet. I estimate the break up value to be well above the current share price - even though I am not sure it would be in the national interest!  
The Executive Summary of the Discussion Document for the Ofcom Strategic Review is 20 pages long and omits a key phrase from the main paper regarding the impact of regulation on investment "Whatever approach is adopted, its success or failure depends significantly on the trust investors place in the regulator. Investors value predictable and stable policy interventions:significant and poorly signaled changes of policy can damage investor confidence, and may increase the risk associated with new investments". It then goes on to ask: "What might be the most appropriate regulatory approach to the pricing of wholesale access to new and risky investments in enduring bottlenecks in the future?"

Five years ago the lack of trust in the UK telecoms market was indeed such that fund managers were not interested in anything other than bottleneck removal with a payback in months rather than years. Over the past couple of years that appears to have changed. I therefore begin this digest with a consideration of how that lack of trust came about - before I digest the executive summary with that specific question in mind.

The Ofcom executive summary begins with a contrast between the scene today and that when Ofcom did its previous market review, a decade ago. This prepares the ground for a possible reversion for a return to the regulatory priorities set by Bryan Carsberg and dropped by Ed Richards (my convention in this article is to use the names used the decisions were taken, not those they subsequently received). We have moved from monopoly regulation in 1984, through encouraging duopoly (leading to infrastructure competition) in 1991 under Oftel , back via "access regulation" (alias local loop unbundling) to infrastructure monopoly under Ofcom and now to the beginnings (over the past year) of genuine infrastructure competition (as new players began to exploit the opportunities opened up by the run-down of BT's investment and maintenance programmes). 

Directors and investors would benefit from a quick and dirty digest of the effect of those transitions on BT's capital spend and share price. It is unclear whether any lessons have really been learned"when a cryptic comment in the Ofcom executive summary says that when the effectiveness of the attempt to encourage "end to end competition ...  was shown to be limited, the emphasis shifted again to access based competition".
The attempt failed because the Cable Companies ran out of cash while trying to fight planning permissions through local authority planning processes. Meanwhile BT was galloping ahead with an ambitious capital investment programme to provide "full motion video" (the original definition of broadband) to every home by 2002. Then came the switch to local loop unbundling  to protect the US bond-holders of the now bankrupt cable companies (NTL filed under US law) and the "redefinition" of broadband to include "125k always on internet", (all the cable companies could guarantee nationally).
The consequence was a collapse in BT's share price from a peak of £15 at the start of 2000 to a plateau of about £1.50 - 2.00 (from 2002 - 2012) with a trough of under £1.00 when Ben Vervaayen left and Ian Livingston announced plans to cut capital and operational spend by nearly 25% in the period  2008/9 to 2012/13. Michael Rake then oversaw the decision to invest management time and shareholders' funds into content (Quad Play) rather than infrastructure (alias utility) services because he could not see how BT could make money out of the latter without political and regulatory changes that were then unlikely.  The price has since recovered to over £4.50 but Openeach is a said to be still heavily cross-subsidising the entry into content markets..

We can see the effect in the steady run down of BT's annual capital spend (net of overseas spend and/or government subsidy): from £3 million in 1998 (when the BT share price rose from just under £5.00 to over £9.00), rising to over £4 million in 2001, falling back to £2.5 million in 2002 (after the share price tanked), rising again to £3.25 million in 2007-8 before being cut to £2.5 and then £2.25 from 2010 onwards. 

Meanwhile fund managers around the world (but not in the UK) increasingly saw the value of investment in broadband as a utility. The world's most active on-line retail market (using the cheap consumer broadband enabled by BT's past investment) is now dominated by US players using off-shore data centres and paying little, if any UK tax. Meanwhile many of their erstwhile UK competitors have been crippled by expensive and slow business connectivity (the leased line legacy).
BT now accounts for less than half the annual investment in communications infrastructure, fixed and mobile are converging and both are suffering from congestion and overload (back haul as well as local access) at peak times in hot spots and not spots. Meanwhile the problems with local planning have still not been properly sorted - although active local opposition is now considerably more muted than a few years ago, when I blogged on the Midsomer Broadband Murders.

The good news is that, at long last, we have a credible government strategy to encourage and support the investment that is so badly needed and action is under way to address the planning problems that caused the failure of the duopoly policy over 20 years ago.  

Now to the challenges and options on which Ofcom wishes to receive inputs.

It sees four strategic objectives, each of which pose challenges:

1)    Incentives for investment and innovation, delivering widespread availability of services with a need  to look at the evolving technology investment scene in the context of the "challenges" of:

Universal broadband: where the current perceived need is for about a reasonably reliable 10mbps, including at peak times,  "to benefit from the most popular on-line services" - not "up to 10 mbps, let alone up to 2mbps

Superfast broadband:  with claims of "availability", whatever that means,  by 2017 still leaving many gaps, especially for SMEs.

Ultrafast Broadband: where debate is muddled by BT's "announcement that it would deliver speeds of up to 500 mbps to most of the UK within a decade" - this is presumable a reference to a technology that is likely to deliver such speeds only to those linked to their local cabinet via less than 150 metres of high grade copper. Given that fibre is now cheaper than copper (and less attractive to thieves)  this is not a very credible way forward.

Mobile cover and quality of service: in practice the need for "fibre to the femto" to handle the volumes, plus the problems with inner city, let alone rural, not spots (particularly within office buildings using modern claddings that are "resistant" to radio waves), plus the massive rise in traffic volumes (e.g. over 5 million Sky Go customers already accessing TV on their smart phones) means that a transformation in back haul investment will also be needed.    

There follows interesting sections on:

  • "Competition as a key enabler of investment and innovation with some contentious statements on the value of "access based competition" (e.g local loop unbundling and shared access dark fibre)  and "end to end competition  between telecom and cable operators operators in driving innovation and investment.
and on
  • "ensuring availability beyond commercial provision where it is unclear what role a regulator should play.
2)    Sustainable competition, delivering choice, quality and affordable prices

This is looked at under five headings

2.1) Promoting competition in fixed telecoms. Here the choices are perceived to be:

  • Continue with the current approach - i.e. evolving fudge as pressures change
  • Strengthen the current model of  functional separation - i.e. to better ensure that Openreach does not favour BT's content operations
  • Substantial deregulation and greater reliance on end-to-end competition  - hoping that head to head competition between quadplay operators and the grosing number of alternative network operators and shrinking number of resellers will not lead to a new set of customer lock-in and cartels
2.2) Sustaining effective competition in mobile

Ofcom, probably correctly, declines to comment on the impact of Gordon Browns's "removal" of £20 billion of potential investment funding from the industry (spectrum auctions) and the recent decisions of  Deutsche Telekom and France Telecom (EE) and Telefonica (O2) to withdraw from the UK market  when faced by the infrastructure investment needed to address urban and rural notspots  

2.3) Regulating to protect incentives for efficient investment

This section includes words on "risk adjusted rates of return" which are anathema to those of us who studied (albeit I did only subsidiary course at London Business School) regulatory economics under the late great Michael Beesley. Attempts to second guess incumbent players, let alone innovators, on "rates of return", acceptable or otherwise, are always doomed.  Meanwhile the rise and fall of BT's share price (and its current market valuation compared to those of, for example, Sky or ITV) indicates the views of the market.

2.4) Taking account of convergence

This section distinguishes  between:
  • different means of providing the same services
  • different types of network adopting a common architecture
  • different services collected together in the same retail bundle (e.g. TV content and fixed/mobile access) 
The regulation of abuse, to prevent players dominant in one sector (infrastructure, technology or content) from using that to leverage dominance in others as opposed to offering genuine choice, is probably Ofcom's greatest challenge over the next few years. That is particularly so given the fluidity and uncertainty of change across all three dimensions. 

2.5) Securing a sufficiency of service for consumers and business

Ofcom refers obliquely to the fall (after separation from the rest of BT) and subsequent rise (after the Olympics and associated restart of recruitment and training) of the quality of service provided by Openreach and asks some excellent questions.  Improving the measures of delivered quality, as perceived by users, is essential for a society that is increasingly dependent on its on-line connectivity. But the problems now appear more acute with regard to mobile. 

Is it really sufficient to say that "quality of service concerns in competitive markets ... may simply be because consumers and businesses are not willing to pay for higher quality of services"?

I am one of those who has long paid extra for BT (as opposed to unbundled) landlines and have mobiles on two different services (Vodafone and O2) while using Sky for TV. That is because of past personal experience (non- response as opposed to poor response) with other suppliers. I do not believe I am alone in wanting better access to reliable information on current service levels (including geographic cover) but have grave difficulty in finding out the truth, e.g. when seeking to help MPs faced by complaints from their voters. So do all those I know who are seeking to advise SMEs on the choices available to them.

I also hope that some readers may choose to comment on the role of Ofcom (as opposed to, for example CPNI) when it comes to reliability and resilience.  It was only recently that I learned the scale of unreliability (e.g. exchange, not just line, outages) across our creaking shared infrastructures.

3)    Empowered consumers and businesses, able to take advantage of competitive markets

The confusion of misleading information currently used in the marketing campaigns to persuade customers to switch supplier clearly needs to be addressed. That only 8% switch more than one service at a time is not in the least surprising given widespread hearsay of what happens when you try. "Better the devil you know".

This is clearly an area where Ofcom should be far more active, perhaps in co-operation with the Advertising Standards Authority. But I also look forward to seeing what groups like the FSB, Countryside Alliance and LEPs and Chambers of Commerce have to say about the information provided to SMEs. 

4)    Targeted regulation where necessary; deregulation elsewhere

The current regulatory regime has grown in response to consumer complaints and industry responses, without pruning as technology changes and legacy systems and services are run down or withdrawn.  Ofcom is therefore seeking inputs on issues associated with the transition to an all-IP phone (as well as data) network and the termination of copper and leased line services.

It is also looking for inputs with regard to opportunities for deregulation where end-to-end completion can be promoted or promoted, services can be delivered by different mechanisms or regulation can be focused on specific bottlenecks or geographic areas. Its example of the effect of deregulating leased lines in parts of London is not, however, necessarily a happy one.

The argument that "reducing intervention to promote competition ... could also risk resulting in higher prices for consumers" is also odd. That of greater inequality of service is rather less contentious.

The executive summary ends with "We welcome stakeholders' views on areas where there might be further scope for either deregulation or simplification". 

I now plan to make time to read the full paper  but my own immediate reactions are:

1)    Stop trying to measure return on investment. It is even less useful when technologies and markets are converging, diverging (in some cases) and evolving at unknown speed in uncertain directions.

2)    Focus on price, quality of service, clarity and accuracy of advertising claims and, above all, controlling predatory behaviour - particularly customer and technology/service lock-ins

3)    Pay equal attention to business and consumer needs because without the former the consumers will not have the jobs of the future to earn the money to spend on the services of the future    

BT declares war on Ofcom - your opportunity to help reset the UK regulatory landscape

| No Comments | No TrackBacks
| More
I  was intrigued by Gavin Patterson's reported attack on Ofcom for even raising the question of separating out Openreach. But for the "problems "of the BT pension fund and the block on foreign ownership of its surveillance operations, BT would probably have been broken up by its shareholders long ago. Today its share price is £4.50 (from a nadir of under £1.00 after a peak of £15.00) but a break up could be under way, before Ofcom completes its consultation, if it were to lose badly in the current battle to sign up those who want to watch TV over their smart phones (and Treasury and GCHQ were to remove their objections). Conversely, if BT wins well, it will need a massive rights issue to fund the extra investment in network capacity (EE as well as Openreach) to carry the explosion in mobile (even more than fixed) traffic under way.

The supposed threat to stand still on infrastructure investment because of uncertainty may prove to be a "Ratner gaffe" - especially if HMG reminds others of the availability of guarantees as used to underpin Virgin's £3 billion spend on upgrades and extensions. A whole new generation of competitors (City Fibre, Gigaclear, ITS etc.) have investor backing to build lower cost, higher speed all-fibre networks to fill the other gaps left by the run down of BT's 21CN investment programme (after local loop unbundling changed its core business model).  They would like BT to provide regional and national backhaul. But others are already stepping into this market too as sector regulators (e.g. for financial services) open up the market by demanding that payment systems (for example) have fall-back facilities over networks that are not critically dependent on each other.

The lack of investment in Openreach over the past decade (compared to period before local loop unbundling or the recent acceleration in infrastructure spend by its competitors) means that BT may lose its monopoly position across much of the UK before it is broken up - unless, of course, it responds positively to those shareholders who want it to lead that process. That leaves open, however, the question as to whether a break up would be good for stimulating competition, let alone investment. I suspect not.

You have until 8th October to help ensure that Ofcom becomes an effective competition regulator, helping re-create a globally competitive UK communications market in which customers (both residential and business)  have genuine choice and investors have confidence that the risks they take will not be compounded by political and regulatory uncertainty.

Do not waste that opportunity.

The discussion document for the Ofcom Strategic Review of Digital Communications  illustrates just how far thinking about the UK Broadband market has moved on since the consultation over the Digital Communications Infrastructure Strategy was launched during the silly season last year, with almost no publicity. Readers may remember my exercise to overcome that lack of publicity, drum up responses from other than the usual suspects by pointing out what was at stake, organizing a round table of those considering responses and getting these into the public domain because DCMS had no plans to put the responses into the public domain until after it had responded. The full set of responses is now available and I very much hope that Ofcom will be using them as part of its input. It is not, however, obvious from its discussion document.
The document is hard going. Even the executive summary is nearly 20 pages and needs a "Director's Digest" to bring out the key points. But it has been released before the start of the silly season and the deadline for responses is not until after the end of the last party conference. 

I therefore strongly recommend reading it all, pondering the implications and responding accordingly.

I will post separately a copy of my own "dirty digest" to help readers understand the implications of some of the more measured language in the executive summary. I also strongly  recommending  reading Malcolm Corbett's excellent paper on why we should "Support the Digital Innovators"    and, if you can, attend the INCA meeting  on Financing Independent Networks on Wednesday  to get a better understanding of what has changed over the past year.

As part of the follow up to my first blog on the effects on Digital Skills of the Spring Budget I have been looking at some of the back up material. I began with "Fixing the Foundations" which contains excellent measures. The main ones include: 

  • "employer-routed funding reforms, such as the digital apprenticeships voucher, are putting control of funding directly into hands of employers
  • apprenticeships will be given equal legal treatment to degrees, to ensure that apprentices and employers can be given confidence in the brand
  •  the government will abolish employer NICs for almost all apprentices under the age of 25 from April 2016
  •  the government will set apprenticeship targets for public sector bodies"

It also says, albeit thinking mainly about the FE sector:

"The government wants strong local areas and employers to take a leading role in establishing a post 16 skills system that is responsive to local economic priorities ...the government will enable local involvement in the ongoing commissioning of provision, putting power in the hands of people who are best placed to tailor provision to local economic needs"

Then l took look at the "Fixing a broken system: the case for an apprenticeship levy". This  contains some excellent material but can also be seen as defence of formal apprenticeships (using off-the-job, FE-based modules, defined by Industry Training Boards), against the new world of flexible, workplace, on-line distance learning, using skills frameworks agreed by employer-led Sector Skills Councils (now "Partnerships"). It also implies that the use of apprenticeships to train older staff (as opposed to new teenage recruits) in the retail, hospitality and care industries is an "abuse" and not to be copied by others.

I think we need a more profound look at the role of FE in a digital world and look forward to helping publicise some of the initiatives to which I referred in my recent blog on how the "Creative Industries" are working with bottom up college-based consortia

Finally I took a look at the catchy titled: "The impact of University Degrees on the lifecycle of earnings: some further analysis". This is used to justify the claim that the Net Present Value of a degree is 170,000 for a man and 264,000 for a woman. I remember the controversy when it was first published. Table 16, Page 54 showed that social studies and arts/design had a negative value while Engineering/Tech had barely any value. Part of the reason was said to do with the methodology. This did not take into account the need for further qualifications (as with Medicine, Law and Accounting) or the way that earnings in design and engineering are affected by apprenticeships (which may be pre- or post- graduate and may, or may not, include a modular degree).

The weakness of the "premium" (alias NPV for the individual) for maths and computing degrees, (100,000 for a man and 243,000 for a woman)  is harder to explain, until one looks at the high average unemployment rates among computer science graduates. If fact this masks a range from under 2%, for the ITMB (I need to check whether this is included with Computer Science or Business and Management) to over 50% for some universities and course). 

Meanwhile the NPV for a History/Philosophy degree is 557,000 for a man but only 113 for a woman - hence the headline for this blog.

The message for me is the importance of one of the actions in "Fixing the Foundations" :

"The government will improve destination data to enable informed choices.  The government is supporting the development of online portals to present all post 16 learning options to young  people in a user-friendly way, and is strengthening the provision of destination and earnings data. The new careers and enterprise company will encourage greater collaboration between schools, colleges and employers, helping young people to access the best advice."

It will be hard enough for the Careers and Enterprise company to achieve its current objectives (which appear focused on FE choices)  but we also need to ensure much better advice for those deciding whether to incur 50,000 of debt for an uncertain return or to enter into an apprenticeship contract, perhaps one which includes a modular degree, with a local employer, or one who will provide (or offer help with)  accommodation that is a least as good as that they might expect at "Uni".    

The recent tax changes to reduce the cost of employing apprentices deserved an unequivocal welcome . The reintroduction of training levies and grants, albeit confined to apprenticeships, does not. But the devil will be in the detail.

After the repeating the commitment "to significantly increase the quantity and quality of apprenticeships in England to 3 million starts this Parliament, putting control in the hands of employers" (Para 1.269)  the Budget Report says "This goal will require funding from employers. In recognition of this, the government will introduce a levy on large UK employers to fund the new apprenticeships. This approach will reverse the long term trend of employer underinvestment in training, which has seen the number of employees who attend a training course away from the workplace fall from 141,000 in 1995 to 18,000 in 2014." Para 1.270)

The UK has a serious problem with under-investment in training but the figures quoted are for "No. of people in employment whose actual hours worked was less than usual hours because of training course (sic) away from the workplace". Does this mean that the aim of the apprentice levies are to bring about a return to off-site "chalk and talk" and to reverse the rise in supervised and monitored on-line learning at the place of work that has transformed skills acquisition over the past 20 years. Is the aim really to encourage UK employers and training providers to shun the rise of globally recognized technical and professional qualifications and modular degrees, with on-line materials interspersed with webinars, MOOCs and awaydays which do not eat into "usual hours worked".
One can understand why the Government is seeking means of funding the recommendations of the recent review of the remaining Industry Training Boards but the volume of "off-site" training (or even the time spent using on-line learning material and simulations at the place of work) is not a good proxy for  investment in the changing demand for digital skills. The case for the levy was made in a paper by Professor Alison Wolf which makes some excellent points, including about use of the current government supported apprentice programmes by the retail, hospitality and care industries to cut the cost of retraining older workers. But the main cost of a digital apprenticeship is the time of those providing supervised work experience and mentoring. This is rarely measured, let alone reimbursed in Government supported programmes. Cutting the cost of off-site course modules and accreditation will have little effect. If these are to included then the levy required will not be "modest" and could serve to further encourage the outsourcing and off-shoring of jobs.  Also is the retraining of older workers to be condemned as an abuse or welcomed? 

We need to encourage large private sector employers to train (and not just first entry apprentices) rather than poach from those who do. Nowhere is the problem more serious than with regard to the information security skills crisis, on which I have blogged regularly over the past few years  I summarised the wider issues in my evidence to the recent House of Lords Digital skills report - page 1057 (go to the back a scroll forward!), The problems are not new  but universal broadband that is fit purpose makes it easier to break out of Groundhog Day and use on-line delivery to help slash the cost and time of workplace trainin. Meanwhile while training contacts (where the law was well summarized thirty years ago in Strathclyde Regional Council v. Neal) remain a more effective means of deterring poaching than levies and grants ("job creation programmes for personnel officers"). Those who use contracts to reinforce loyalty tend not, however, to publicise the fact. Also they do not deter the import of supposedly skilled immigrants  or the off-shoring of tasks,  including to meet public sector needs, any more than would a levy and grant regime.

If the aim is to encourage those bidding for public sector business to train UK youngsters
, rather than import supposedly skilled graduates from overseas  then the Chancellor should improve "guidance" on the use of the Social Values Act to cover the public and systematic  weighting of public sector outsourcing procurements in favour of those who take on UK apprentices. There is also a good case for supplementary "apprenticeship levies" on those who recruit off-shore or otherwise export jobs..

On a wider front the Chancellor needs to also address the behavior of Central Government itself - where in-house training appears to have collapsed since the introduction of Civil Service Learning and the termination of all courses that the main contractor cannot provide from its own product line or profitably subcontract. I have blogged on the consequences of this before.  It would be wrong to condemn the analysis that led to the recommendation in para 1.271 as one such consequence, but confining apprentice levies to private sector employers would be a mistake. It is therefore hoped that the Government will not only set apprenticeship targets for public sector bodies (para 3.5 of "Fixing the Foundations: Creating a more prosperous nation" published in parallel with the Summer Budget) but will include then in levy and grant systems, including any levies on those who outsource jobs in order to avoid the need to train their own staff.  

I am indebted to David Pitcher for an advance sight of the material he plans to present to MPs at the event on the 9th July to recruit "Digital Ambassadors" to help get the skills and jobs of the future for their constituencies.

It illustrates just how much is being done to turn FE Colleges into learning hubs helping employers, large and small, develop the skills of the future locally with no need to offshore tasks along uncertain supply chains to locations with no protection for IPR or Data, or to import "skilled consultants" whose qualifications may be worth little more than the paper they are not printed on,  even if you knew how to check them).

The main report on "Colleges and Employers working together to to create a highly skills workforce " can be found on the Association of Colleges Website.

Computer Weekly readers looking for digital skills within a creative context should read the report and then follow the links within David's paper (see below) before calling a recruitment consultant. They would then do well to call one of those who helps identify and recruit potential apprentices (of all ages), because they are increasingly unlikely to find the mix of skills they are seeking on the open market, let alone at an affordable price.  


"A strong and growing economy is in all of our interests, and colleges play a central role in sustaining the recovery - they are the skills powerhouses that drive the local and national economy. Further education colleges across England make sure future workers have the skills employers require, and provide young people with the education and training they need to succeed.

Some of Britain's most respected companies, such as Mulberry, BAE Systems and the Met Office, want their staff to have appropriate skills and work with colleges to ensure this. This is achieved in two ways - through designing qualifications specifically for the employer and through businesses working with colleges to inspire students. This relationship boosts aspirations, highlights the importance of employability skills and promotes the different roles available in a range of industries.

For smaller employers the Creative Industry has addressed the skills gap in the industry during the last five years through an established network of FE and education partners delivering apprenticeships where there are local skills gaps.

Creative and Cultural Skills promotes and drives industry skills and employment needs to its founder college network (46 providers) and also engages smaller SME's (which is most of the industry) in training,  development and partnership with colleges. It has a multitude of success stories with regard to improving Industry/education links in order to make a difference

Two new Apprenticeship frameworks at Level 3 and 4 developed via a consortium of eight FE colleges have now been running for a year. The aim of the frameworks is twofold; first to enable students to understand instructional design in an education context, supporting FE to develop its own digital capability and deliver FELTAG targets for online learning and second to develop local skills hubs to supply digital capability to small businesses.

There are currently ten colleges across the UK delivering Design e-Learn

The Education Foundation's report, "Digital Colleges- The Journey So Far" was an outcome of research across the FE sector identifying the current state of whole college digital resource, infrastructure and teaching and learning. The Education Foundation in partnership with Digital Business Britain, IBM and the Association of Colleges (AoC) launched the new report on the future of the digital agenda within the Further education and skills (FES) sector."

Broadband Competition spreads from Shropshire to Shoreditch: Results: BT - 1, Gigaclear - 1, Split - 2 Rematches - 1.

| 9 Comments | No TrackBacks
| More
We can now see the result of last year's change of policy and leadership at BDUK accompanied by rediscovery by Ofcom to its duties as a competition regulator. Those Counties which held out from pledging everything in support of extending BT's twenty year-old 21CN infrastructure appear now to be getting rather better offers. Sometimes BT wins the Phase 2 BDUK contracts, as in West Yorkshire or Shropshire. Sometimes Gigaclear wins, as with Gloucestershire . Sometimes the business is split (as in Essex or Berkshire). It will be interesting to see what happens next in Shropshire where the Council is co-operating with INCA on an event to help local businesses look at using the voucher programme to meet their needs. Shropshire is, arguably, one of the most difficult counties to serve using anything other than a mix of satellite and terrestrial radio. I do not therefore envy the council the task it faces in getting value for money - other than from mixing an extension of the current BT network with radical alternatives - perhaps it needs the local equivalent of B4RN (*).

Meanwhile Devon and Somerset has decided on a rematch, having failed to get a sufficiently attractive bid from BT.  As with most (but not all) other rural areas, it may not be practical to have a commercially viable service without council money to help prevent social and geographic exclusions - but competition between suppliers for the public funds available, perhaps leading to a mix and match of suppliers and technologies, is more likely to be able to serve ALL residents and businesses, at affordable cost, than the simple extension of a legacy network (likely to be obsolete within the decade as the end-game for IPV4 spreads from the Pacific to the USA and the main Internet players accelerate their transitions to IPV6 accordingly).

At this point the BT response varies. At its best, (when faced by well-advised Councils who are serious about value for money) it produces imaginative new solutions involving a mix of technologies and business models, as in Glasgow (using the infrastructure investment for the wifi for the Commonwealth Games to provide supported access via community centres) or in Cornwall (using wireless and satellite to achieve its targets for cover).  

At its worst ... you can read Hansard for the complaints about attempts to stop councils from comparing notes (I still do not understand how "commercial in confidence" can be applied to services in receipt of "state aid") or doing joint deals to get better value for money than any silo-based Whitehall procurement.

Meanwhile when it comes to urban broadband we can see City Fibre, HyperOptic and ITS expanding the number of locations to which they offer true fibre while Manchester is about to benefit from head-to-head competition between Virgin and BT. We should also not that   Wimax has shown its potential when everything goes pear-shaped   At a recent event on cyber-insurance I asked whether dropping bombs down a manhole cover to set off all the alarms in the area so that you could rob a safety deposit company counted as a cyber-crime. On that note (and the implications for those who are more concerned with reliability and resilience than raw speed) I will stop.

(*) I remind readers that I am not only a shareholder in B4RN but am looking forward to receiving a dividend cheque - much earlier than I expected - although I confess I will probably frame it rather than drink it. I do, however, also declare an interest in the choices available  to GigaplusArgyll . I used to be able to download e-mails, albeit very slowly, using the 2G signal from a mast the other side of Loch Scridain. Now thanks to modern bloatware I can barely get the headings before losing the signal. The absence of reliable communications also adds an extra frisson to the organisation of the Isle of Mull Rally


Redeploying welfare funding to support 3 million new apprenticeships was one of David Cameron's most highly publicized election pledges. We can expect to hear more in the budget this week. Meanwhile every survey of employers' current and expected problems, for well over a decade, has flagged shortages of digital skills.

It is often said that "there is no shortage of digital skills (e.g. cyber, design, etc., pick your definition), only of employers who recruit trainees and retrain their existing staff".

That is, however, not strictly true. 

There is also a shortage of employers willing and able to work with local schools and colleges to help educate and motivate the next generation (digital natives/millennials), re-motivate the "lost generation" (digital neets) and offer "back into employment opportunities" for the "other half" (including returners with family responsibilities). Every skill in short supply now has a digital component and employers want evolving mixes of skills that do not fit traditional qualifications.

Meeting the objectives set by the Prime Minister, let alone the evolving skills needs of industry, will not be easy but the glass is also half full. We need to publicise, build on and replicate success. Failure to do so risks iniativitis, fragmentation of effort and the replication of that which does not work.

One past success was "Make IT Happy", the brainchild of Andrew Miller MP when, as  Chairman of PITCOM (subsequently transmogrified into PICTFOR) he secured agreement to use its reserves to underpin the launch of a series of competitions to improve links between MPs and the schools in their constituencies. A result was that e-Skills, now the Tech Partnership acquired 25 Parliamentary "Digital Skills Ambassadors", willing to help support and publicise local schools activities.

The Digital Policy Alliance (which has an MoU with PICTFOR but is not bound by the rules of the All-Party groups) has organized an event on the afternoon of 9th July to help the Tech Partnership recruit new "Skills Ambassadors" to help publicise the full range of activities now available (or planned) to help their voters and their voters' children and grandchildren to acquire the skills of the future and to help employers (large and small) create the jobs of future in their constituencies

The second objective is to identify those MPs who wish to help ensure that the promises of today are turned into action plans that will produce results by the time they stand for re-election in 2020. My own (third) objective is to encourage MPs to ask employers who complain about skills shortages, what they are doing to help. I would also like to see more MPs publicly praise those who are already helping - particularly those in their own constituencies.

The result should be a set of symbiotic relationships that make the target of 3 million additional apprenticeships by 2020 look not only achievable, but modest.  . 

The good news is that the time is finally ripe for breaking out of Groundhog Day. The bandwagon has started to roll.

Over 500 employers, large and small, are now supporting existing programmes via the new Tech Partnership (successor to e-Skills) and there is an impressive portfolio of new programmes for launch over the next few months and during the run-up to the party conferences in the Autumn.

In parallel, City and Guilds, the only globally recognised skills brand the UK still possesses, is looking at how to enable employers to embed digital into traditional skills, including to meet the skills needs of the City of London as the world's main Fintech centre.
Across the UK a growing number of FE Colleges, individually or in bottom-up consortia are working together to re-create community skills hubs, supporting employers who are too small to organise in-house apprentice programmes . Click here for more detail, including links to case studies of success. .

We have a growing number of services to publicise apprenticeship opportunities and/or help employees find suitable (motivation as much as innate aptitude) recruits. Some are focused on organising events to promote what is happening regionally or nationally, such as Apprenticeships4England . Some are embedded in national careers advice services for young people unable or unwilling to incur student debt, such as notgoingtouni. Some are specific to digital, such as wearedotdotdot. Some are geographically specific, such as the Good Careers Guide "brokerage" pilot. Others are embedded in mainstream job search serves such as Total Jobs . We should also include programmes such as "Young Enterprise" and some of the more successful "welfare to work" contractors whose "graduates" are now recruiting apprentices of their own or helping others to do so in areas of extreme shortage, such as information security  

There is a wealth of relevant careers and learning material on-line and the regional "grids for learning" (linked nationally via JANET) could enable most schools and libraries to operate as on-line local skills, careers and learning hubs, networked to colleges, schools, universities and education and training providers around the world, not just in the UK.

Most of the main professional bodies and trade associations are looking to provide support for skills programmes and apprenticeships via their local branches and activists. Those serving the digital world range from the umbrella bodies like the British Computer Society to specialist international bodies like ISACA (which bridges the world of audit and information security and has a strong UK chapter).

On the 9th July the aim is to provide succinct introductions for MPs and their research assistants to what is already happening or planned at the national or international level and to the opportunities to support local action to help meet the needs of their voters (and their voters children and grandchildren) and get the jobs and skills the future to their constituencies.

We also aim to provide platforms for:
  • MPs to publicly support (quotes for press releases etc.) what is already happening or planned in their own constituencies and
  • Employers to state what they are doing with their local MPs.
Please  email me , copy to the DPA Office, if you would like to participate in the follow up.

[This blog will be updated at periodic intervals between now and the 9th July]

Over 30 MPs contribute to debate on Broadband: the pressure for change is clear.

| 2 Comments | No TrackBacks
| More
I strongly recommend reading the contributions made during the debate on Superfast Broadband on Wednesday 24th June. 26 MP were named as down to speak. I have counted contributions from over 30, including all of those to whom I sent links to my previous posting.

I will not try to summarise all the points made but three main themes seem to emerge:

1) Overall BT is delivering more and faster than contracted but local performance varies and appears proportional to the determination of the local Council to get value from its contribution. Those which not only publicise who is to be served and publicly monitor and report performance, but help promote take-up as soon as areas go live, get much better service. Actively promoting take-up delivers a win:win.BT commonly increases its investment as revenues begin to come in - and is also liable to give a pay back that the Council can use for those hardest to reach.

2) The approach of encouraging BT to extend its legacy 21CN network, beginning with those who are easiest to serve, has deepened geographic and social divides, making it harder to serve "not spots", including those area which are "descoped" when they prove harder to serve than expected. The next phase of funding should copy the Gloucester approach where the council has listed the properties to be served and Gigaclear consequently won the contract in a head to head competition with BT.    

3) It is impractical and immoral for Government to penalise taxpayers and benefits claimants for not submitting returns and claims on-line when they do not have reliable access, either at home or via a local community centre or library, particularly during the evenings or at week-ends when most small firms and self-employed do their paperwork.

I spent yesterday at the Digital Leaders conference, addressed by Ed Vaizey and Matt Hancock. I spent part of the time with some of those organising services for residents of social housing. The problems faced by those they are seeking to help, because of the lack of affordable and reliable access to services that are fit to use, was a major issue. The personal benefits to be gained and public sector savings to be made from providing fibre to the home (or the "7 - 11 library or community centre supported drop in centre") are obvious.

There was a common call, among the "Digital leaders" for a responsible Minister in the Cabinet. I thought back to when Kenneth Baker became Minister for IT (I was the dissenting voice in the policy troika referred to by Adrian Norman in the blog to which this links). Government policy for its own use of IT became fragmented as the departmental silos fought back. CCTA (which had co-ordinated policy) was emasculated - with teh results we have seen since. I was not around myself when Alexander Pope wrote "For forms of government let fools contest ...". (or for John Adams counter-attack) but subsequent history shows that John Adams was an optimist.

I think we are more likely to get progress if the 30 of so MPs who spoke in the debate on Wednesday form into hunting packs and demand quarterly progress reviews, via joined up Select Committee Enquiries and coerce the Silos of State into taking seriously the need for  co-operation across departmental boundaries - perhaps even organising shared training programmes to provide Civil Servants with the skills to plan, organise and monitor the delivery of joined-up policies and services that are fit for purpose.  

Points to bear in mind when MPs debate broadband, including the deepening digital divides, on June 24th

| No Comments | No TrackBacks
| More
The summary produced to help MPs contributing to the Westminster Hall debate on Superfast Broadband roll-out helps explain why debate is so confused and bitter. The  Librarians of the House of Commons preface a summary of the official sources (particularly the Ofcom "European Scorecard") with links to recent articles which call in question the methodologies used in those sources.    

Those who say that the UK is lagging behind commonly quote the services available across Scandinavia, the Netherlands, parts of Eastern Europe and the tiger economies of the Far East. The Ofcom Scorecard compares our performance with France, Germany, Italy and Spain - where the incumbent operators are doing no better than their UK equivalent - BT. Those in the lead have competitive markets with varying mixes of private sector and community (including municipal)  enterprise.providing more modern local services.

Then there is the measurement of speed - beginning with the meaning of 2Mbs. Is this a guarantee of 2 Mbs minimum speed or a circuit rated at "up to 2Mbs": i.e. a supposed average of  2Mbs over the course of 24hours: faster when no-one else in the neighbourhood is on-line but slower, sometimes below 50kbs, during peak periods. Given that "up to 8Mbs" may well deliver well below 2Mbs during peak periods we can see why DEFRA would probably have had to abandon the on-line Farm Payments system, even if the system had been otherwise fit for purpose.

Page 16 onwards of the summary produced by the House of Commons library quotes Ofcom data indicating a 21% increase in average speed over the past year but this is for urban areas served by fibre services but suburban and rural areas have seen little or no change. The Ofcom release only quotes variations around the average for a few high speed services(e.g 96% of those receiving the Sky "up to 38 Mbps" service receive at least 90% of their maximum speed at peak times while only 7% of EE customers do so). I have been told (by sources other than Ofcom) that the omission is because the service used does not work reliably at lower speeds, such as the "up to 8 Mbps" common in rural areas.

I hope that the debate will focus on the present and the future, not who is to blame for the past, because the world has moved on since Rory Stewart fired the starting gun for the Great Rural Broadband race, in Reghed in 2010. At one end of the spectrum, the local community champion B4RN now provides fibre to over 1,000 premises, is in the process of launching subsidiaries to serve additional communities, and is about to pay its first dividend (albeit I will probably frame my cheque rather than cash it). At the other end HM Treasury has agreed to underwrite 3 bIllion of investment to enable Virgin to restart its roll-out to cover those areas abandoned when Telewest and NTL went all but broke. We can argue whether national progress would have been faster had DCMS officials not insisted  on providing "guidance" to local authorities and hired consultants who understood neither telecoms nor state aid rules, while BT focused on delivering the infrastructure for the Olympics instead of the rest of the UK. [P.S. Wapping still appears stuck with 8 Mbs]

The roll out is now accelerating as BT discovers that it cannot sell its sports content to those served only by long lines of crapband (Copper, Rust, Aluminium and other Pollutants from the cabinet to the home). Meanwhile previously docile local authorities are considering whether to produce guidance on how to copy those who have done deals with its competitors (from Cities like York and counties like Oxfordshire and Gloucestershire ) in order to prevent the jobs of the future migrating elsewhere.

Meanwhile the new team at Ofcom looks set to restore its role, as a competition regulator, using realistic measures of price, performance and behaviour instead of playing regulatory games over cost of capital and return on investments, with all-too-predictable results.

I therefore hope that the debate will focus on what is happening now needs to happen now and that the Minister's response will cover not just how to get better value from the state aid to BT, but what is being done to encourage fund managers to invest in British Broadband infrastructures (to collectively form an ubiquitous, reliable, resilient, inter-operable fixed and mobile mesh) that is fit for the future - and not follow the shareholders of O2 and EE in selling out to put their funds elsewhere.

It may be that he cannot comment (in advance of the budget) on how the next phase of state aid will used, but I hope that he will be able to reassure those who voted for his new Secretary of State (MP for Malden) and his ministerial colleagues with even less well served seats (from West Dorset to Westminster),  as well as new Chairmen of the Public Accounts Committee (MP for Shoreditch), of the DCMS Select Committee (MP for Herefordshire) and of the DEFRA Select Committee that genuine progress is being made, not just in the Northern Power House (with bandwidth hungry players moving from Soho and Shoreditch to Manchester), even if the Chancellor intends to take most of the credit.    


Find recent content on the main index or look in the archives to find all content.


Recent Comments

Olivier Crep on On whose side are Open Ri... : And a little addendum to my previous message, ISOC...
Olivier Crep on On whose side are Open Ri... : Dear Mr. Virgo, I have read your blog post with m...


-- Advertisement --