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.