Transcript of evidence to Select Committee hearing in Russell’s Water – local bits

CMS evidence in progressThe transcript of the formal evidence session has popped up on the Parliament website – I have extracted here my bits that relate to the area as many have naturally reported struggles to view the video over the awful local broadband – it’s not a vanity thing for me it’s always cringey to read your own words.  The other witnesses bits are great too you can find them at the link above.

Chair: That is very helpful. Could I turn to you, Mr Perrin? You have been nodding your head vigorously in agreement with Mr Corbett, I have taken it. Can you comment on the argument that BT has made, which goes something like, “We had to start with the easier to reach ones because in many areas we are still trying to figure out what is the most cost-effective way of delivering a particular technology to these areas. Every geography is different from each other and we had to start with the easier ones in order to get going and understand some of the problems before we really engaged and figured out what the hardest ones were”? Where did that argument go wrong, do you think?

William Perrin: It went wrong by starting with BT and also this very primitive utilitarian assumption—you are far more qualified, Chairman, possibly than I am—that you create the greatest good for the greatest number by rolling out as many households as you can. That did not take into account the fact that in rural areas the need is far greater. There is a rural multiplier, as I see it. In this neighbourhood it is zero to 0.95 megabits per second. There are greater benefits to connecting this neighbourhood up to 20 to 25 megabits than there is in a small town where they may already have 17 or 18 megabits. In that small town there is far more opportunity for commercial competition to come in and deliver in an easier delivery environment.

In these rural areas it is more challenging to come up with a business model but there are alternative technologies that BT does not have. You saw in your visits this morning a presentation from Village Networks, a local wireless broadband provider, who provide a very good service in the Hambleden valley using simple off-the-shelf technology to deliver a service quickly and effectively at 25 megabits a second. The cost they are quoting us to roll such a service in our Connect8 area, as we call it, is of the order of £10,000 to £20,000, which is less than half what you pay for one cabinet from BT if you were to go to a community-funded scheme there.

I don’t buy the BT argument at all. It depends on their own cost modelling, their own cost assumptions that are based on the fact they own a copper network, so that is what they want to use.


Q579    Chair: Just to pick up that very interesting point you have made there that it is not just about economic value, it is also about in some sense the social value involved. If the economists associated with the process, DCMS or outside, were better able to capture and model in some sense that social value they might well have ended up with a different calculus about how much to roll out and where?

William Perrin: I grew up on a farm that was a mile from a paved road and two miles from the nearest village, and we were at the end of the line for everything. I spent 15 years in my career in Whitehall and during that time I never met anyone who understood rural issues natively, who had actually lived there and worked there.


Q580    Chair: That included Ministers, did it?

William Perrin: Yes, it did. I am quite happy to have a chat with a Minister I worked with who I felt did not quite grasp that at that time, but I have not worked for the current Government so I can’t speak for that. But Whitehall does not see rural issues through a proper lens. It does not understand the great opportunities there are for internet-based businesses in rural areas that can take advantage of this wonderful scenery, the beautiful countryside, the opportunities in tourism and in modern agriculture that require some degree of broadband connectivity. That was not considered by Whitehall at the outset of this process and now I think we see the Government reaping considerable political discomfort from having got it wrong.

Q585    Chair: That is helpful. I want to bring colleagues in but let me ask one question of all of you, and maybe I could start with Mr Perrin. It has been suggested that a possible solution would be to find some way of splitting Openreach from BT and that would be an enabler of investment and in some sense the next stage in the evolution of the market. The contrary argument to that is it would be enormously time consuming, expensive and disruptive. Where do you come out on that argument?

William Perrin: I think it is symptomatic of starting at the wrong end of the elephant to start with the supplier rather than the customer. One of the things the Government have learned and have been lauded for internationally over the last few years is that in any form of particularly technology policy you need to adopt a user-focused design process that starts with the customer and then works its way back up the chain. The entire broadband policy since 2010 has been a supplier-driven policy that has revolved around the companies that can deliver it rather than the things that customers need. If you start from there and work backwards, you could end up with quite a different situation. I understand people’s frustration and people often are looking for an “in one bound we were free” policy solution and it seems like the separation of BT and Openreachis one they can grab for it. But it also presumes, of course, that there is someone other than BT who would pay Openreach colossal sums of money to put the infrastructure in and that has not been proven yet.


Q586    Chair: You are sounding like you are coming out in favour of another push on the current model differently designed, not separating Openreach out but using BT and other providers?

William Perrin: I would see these as two parallel but related issues. I would reset the strategy to focus on the customers, to get civil servants and people from Ofcom out to communities like this to understand the reality of the experience, to listen to more of what Mr Long is saying about future demand and future needs, because Ofcom’s figures are clearly miles out by at least an order of magnitude, and then start to think again about the strategy. In the meantime, if you want to separate BT and Openreach, that is great, but it will clearly cause enormous turbulence in those companies as they do it and that is not going to speed up the delivery of anything.


Q587    Chair: If you adopt a user-focused approach and you look at what users actually want, then they don’t just want to download and use iPlayer. They want to be able to have every member of the family using it at the same time, they want to be able to do videoconferencing with members of the family who are away, they want to be able to do telemedicine in due course, particularly in rural areas. Therefore, you are going to need just the kind of increased bandwidth that Mr Long has suggested is going to be required. That means vastly more investment than is currently possible and you are pushing, in effect, at a liberalisation of the market and potentially a dissociation of Openreach from BT. Do you accept that line of thought or not?

William Perrin: It is not entirely clear that those former things lead to a separation, but you have to be aware in any user-based design situation of people saying, “I want the moon on a stick. That is what I would like; I would like to have absolutely everything”. One of the things that strikes me working in rural areas is that there is an urgency to get something rather than waiting a long time for everything. People around here need modern, functioning broadband now. People here would kill for 25 megabits a second and they want that very urgently. In order to deliver that, as a stopgap there are other technologies than that which BT is using. We are looking at radio here because it can deliver something quickly, effectively, cheaply and then in the medium term we can look at the bigger picture.


Q594    Nigel Huddleston: What would your alternative key metric be? What would you suggest?

Graham Long: For the current system, it must be premises that actually get the benefit of 24 megabits or above. That is the definition.


Q595    Nigel Huddleston: Any other comments from anybody else?

William Perrin: Just a small aside, if I may, on the way this metric is measured. We have set up here a community campaign to seek our own solutions rather than just sit here railing on about BT. We have drawn on tremendous social capital in the community to come up with a successful set of alternative proposals. But that has meant me and my co-organisers trying to understand the language that BDUK speaks. They speak in a strange language of postcodes and, of course, I challenge you to go now quickly on the internet and find anywhere a comprehensive map of all postcodes in any given area. Despite all the work done on open data over the years, it is not actually there.

In order to get a map of the postcodes of this area, I had to pay Stanfords, the mapping company, £80 for a largescale map listing all the little postcodes in the area in which we worked. Then when we spoke to BDUK at Oxfordshire County Council and BT, we found that they had made some terrible mistakes on postcodes and had big lumps of them missing because they had the same problem. They also did not have a map of postcodes, hilariously. So it was very much like the blind leading the blind—no one could see it. Then when you speak to BT, they start to talk about direct phone numbers as well and, of course, if you are running a community campaign you suddenly have to get everybody’s landlines and then hand those over to BT. Then someone will always raise a Data Protection Act issue and the whole thing becomes extremely complicated. The homes passed postcodes measure has been very tough in running a community campaign because the basic information or units being used are not available to the general public.

Chair: The way BDUK works is that areas that are regarded as being commercial are for BT and those are not touched by public subsidy. The question is why would a business park not be included as part of BT’s normal commercial remit?

Malcolm Corbett: Because they can get people to pay for leased lines if they want good broadband, obviously. Sorry, if you have the choice—okay, I pay £30 a month for a gigabit symmetric connection. If I am going to have a leased line, that is going to be hundreds if not thousands of pounds—well, hundreds of pounds a month, certainly. I am not quite sure how many—

William Perrin: Could I give a couple of specific examples from today’s experience? One of the things we found here in the Chilterns is that there are a number of people who maybe are running a big business or they may be independently wealthy and they say, “I want to buy some telecom services from BT. Hello, BT. Here is my money. I would like to buy an enormous fibre service from you, please, over the existing infrastructure”. BT cannot do that. The infrastructure is, to use a technical phrase, completely knackered. It does not work. When it rains around here, you can barely make a phone call there is so much cross-talk on the line. BT cannot provide modern telecom services in response to commercial need over that service. I tried myself. I said to BT, “In my remote house, I am spending a lot of money on redeveloping the house. I would like to buy some broadband from you, please, on a commercial basis”. They quoted me £54,000 for a 10-megabit a second leased line, which was highly unlikely to work based on my engineering. At the same time, they supplied me with three business phone lines, two of which I had to reject because there was no digital signal at all. They were literally rejected; I sent them back and got my money back. There is this paradox that while BT will say to people on business parks, “You can pay us”, our real world experience here is that no matter what you pay them they cannot actually provide a service.

Q600    Damian Collins: Unless I get some surprisingly different answers from the panel. Mr Perrin, I can anticipate your answer to this question, but I was going to ask how you rated BT’s maintenance of the existing copper network. From what you said earlier, it sounds like it will be pretty low.

William Perrin: Yes. In these rural areas, it is completely worn out. Two or three things tend to happen. In exposed areas like this, the lines get worn away by the trees. That wears away the insulation. Water penetrates the lines and that comes through as cross-talk or faintness. Then in technical terms that comes through as increased attenuation, which means that the signal fades over a shorter distance. When BT try to put their high-speed DSL services—and I will talk in a second about what BT has promised to do here, which is encouraging—over these dilapidated rural lines, it will be like trying to get a Formula One car down a cart track. It is not going to work very well.

I have had this discussion with BT a couple of weeks ago. They have come up with a proposal with BDUK. To their great credit, they have said that they will connect 70% of the properties in our Connect8 area, which is good. We are very pleased with that and very grateful to the council and to BT. But in engineering terms, I am very concerned that they will find that extremely hard to do within budget because the network is so worn out, more than it is in other areas, that their engineering assumptions will not hold and they will run into cost barriers long before they get to that 70%. We are having a meeting with them possibly in here in June. We will get BT in and they will come up with their very detailed plans for rollout in this area, which have suddenly appeared in the last month or two.


Q601    Damian Collins: Is their response to this problem, “We will deal with the maintenance issues when we upgrade the network”?

William Perrin: In conversations I have had with BT engineers, they look a bit worried when I talk about rural dilapidation. Almost everybody in the audience here today will have had an Openreach engineer up a pole trying to help them with a failed phone line of one sort or another. In my urban experience when I have lived in cities, that has not happened. It is just not as broken and worn out.

Part of the DSL approach in putting in the green cabinets is a part of network renewal, but I am sceptical about the ability to achieve the Prime Minister’s target of 8 meg by 2020 or whenever it is because that 8 meg cannot be delivered over this dilapidated rural network. That could be a good thing if it drives upgrading and maintenance, but we do not really know. Openreach is horribly overstretched at the moment delivering the BDUK work, so it is very hard to get a clear picture out of them.

Q606    Damian Collins: Can I ask one final question to the panel? We have heard lots during our inquiry and it has come up during our visit today as well that there is a frustration that Openreach insist on confidentiality clauses in a lot of their work because they say it is market sensitive. Even though this is not commercial work—BDUK work is public subsidy; they are providing a public utility—they cite market confidentiality. They do the same for refusing to disclose areas where they are likely to invest in the future, including the rural communities where the market case has not yet been set. This seems a barrier to entry for other providers. I will start with Mr Perrin first. Do you think there should be a use-it-or-lose-it provision in there for BT where if it is a piece of infrastructure that they are not yet upgrading and they are not prepared to commit to upgrading, then they should lose the right to do that if another provider wants to come along and take it off their hands or provide an alternative service?

William Perrin: There are two parts to that. I have appeared before this Committee previously to give evidence on transparency in public organisations. I simply cannot understand how we have ended up in a situation where massive state subsidy is being paid out to a company that is a monopoly as defined by law to do activities in areas that have been defined in law to be non-competitive and it has a veil of secrecy over it. I do not understand that at all. Any economist will tell you that the more information you have, the better price you achieve, the better outcome. Obviously, you know Akerlof and Stiglitz won a Nobel Prize for their lemon theory last year, 30 years on, which suggests that the more information you have the better price you achieve for a good. I simply cannot understand it. It is a huge structural flaw in the policy environment.

Use it or lose it is not something I have considered, I have to say, and I would probably pass that to others on the panel who may have views.

William Perrin: Could I commend to the Committee—or maybe you should ask for a note on it from someone—the scheme run by Community Broadband Scotland in the Highlands and Islands? As I understand it, and I may be wrong but I think I have it right, they have a small team of five people who work for them. They detect a community broadband project coming up somewhere. Someone will say, “We have a broadband problem up on this mountain or on this island” and then a community outreach worker will go and talk to them, assess the situation. Then they will send in a technology specialist who will go and look at what the viable technology options may be and then, crucially, they will send in a finance specialist to work with them as well to work out where they can raise money. The money can be raised from the lottery and others for this sort of thing. Then, most importantly, that area is taken out of the BT Scotland programme. On the one hand, BT Scotland, because it is hard work up there connecting these areas, does not have to go there, but at the same time there is no danger of accidental or deliberate predation by the incumbent. That strikes me as being a very sensible scheme.

Q617    Ian C. Lucas: Last week we heard evidence from Avanti, who talked to us about the benefits of delivering broadband via satellite. Mr Long, you made a reference to this earlier. You do not accept their evidence?

William Perrin: I have had a Eutelsat two-way satellite product, state of the art, but the bottom line is, it does not work very well. The latency, the round-trip time, is 750 milliseconds, which is determined by the speed of light and that is not going to change much, we hope, over time. That is too long for Skype to work, for video Skype, for people to hang out, but it also means responsive menus on a modern webpage just get stuck. It is like driving a very heavy lorry with a very small engine in. Eventually, if you get up to speed, it will start downloading at a reasonable pace, but anything that involves sending stuff back up the network does not work very well.

I turned then to a 4G solution using a very small antenna on the outside of my house that picked up a signal from Watlington, three miles away. The antenna came with some wires. I drilled a hole in the wall, plugged them into a little router that I stuck a sim card into. That worked really well and that gives me 17 megabits down, 35 megabits up, unless lots of people in Watlington are uploading cat videos, in which case it slows down a little bit in the evenings. That works brilliantly for me as a stopgap until I get something better.

Then this issue that Mr Long raised of caps comes in. It is an EE service. I think I pay about £35 for about 25 gigabits. The last episode of “War and Peace” in HD was 2.7 gigabits, so one TV show takes out 10% of my monthly allowance. We get through that in about four or five days, so I then have to top it up and it is quite expensive.

I have become quite an advocate of 4G as a stopgap service and I am very interested to see Airwave, the police emergency communications replacement, being delivered by 4G because that must axiomatically bring more 4G into rural areas. It is a good solution, but it is one of those things you never really find out about. If you are a regular person just wanting to improve your broadband, it is very hard to go anywhere to find out information about these types of products. The equipment enabling me to do that cost in total £200.

Q623    Chair: No, we are just trying to feel out what the alternatives are. We are very much in the game of looking for solutions in this area. If any of you has ideas or your organisations do as to specifically how this might work—the relationship between investment incentives on operators funded by some kind of fund or equivalent, in turn off the back of some kind of levy, which is an area of interesting potential solutions—we would be very keen to hear more from you.

Graham Long: Can I suggest that there is one big problem? This has just occurred to me. You potentially are going to be penalising the SMEs and private users and letting the large corporations off the hook with that. The reason I say that is because large companies you will find already run their own very large private networks, which will be using leased line. You cannot tap into that data. They will be able to communicate internationally without having to pay such a levy, but small companies who do not have that luxury and individuals will obviously have to pay it.

William Perrin: The issue, though, of funds, Chairman, taps into something that we have encountered as a community campaign, which is the ability to easily raise money for a community broadband solution. If communities want to raise money to build a village hall like this, that is a well-understood model. There is a going rate. There is an approach to Big Lottery or someone analogous to that or another local philanthropist or grant-maker or a council community fund and so on.

What we found with testing the water on raising money for a community broadband scheme is that it is a completely new thing for most traditional grant makers. I had a very good dialogue with Big Lottery because there was a perception among some activists that Big would not fund community broadband things. I talked to officials there and they went away and thought about it and they came back and said, “Yes, of course we would. If we would rebuild your village hall or repaint the scout hut, then this is a very modern version of that and we should do it, but it is a new thing for us. We have not been approached to do this much. We have only made five or six grants of this nature”. We have had a very good dialogue with our district council here through Councillor Babcock where it has been made clear that if we were to approach them possibly for some sort ofgrant, that would be considered favourably. It would not be out of set to go to them for a grant for broadband.

This is something that for community schemes is a tricky area because it is a new thing for grant makers. Many grant makers are not terribly innovative. They tend to grant in response to the median requests they get. They are not so strong at these new things. If you were to have a universal service fund of some sort, there may be a suggestion to get the customers into it as well and see if they can get a bit of it.

William Perrin: I agree with all the preceding points, but I come back to the point that if you want to increase the involvement of altnets, it is not just about the money, much of it is about information and understanding what is possible. As I discussed with Mr Corbett before this session, it is for their trade association as well to provide better information on what their members can do that googles up well when people like us are saying, “What else can I do? What is not BT?” When I start typing that into broadband I need to see something from INCA explaining what the options are, what the technology options are, what the fundraising options are. This is something the Government could broker very easily. We see BT has just launched what it calls a community partnership scheme.

Malcolm Corbett: Give us the dosh.

William Perrin: Yes, give us the money; a give us some money site, and that is trying to inveigle people to give it some money to buy their own cabinet, as it were. Hilariously, it does not have any prices on it at all. We are in this crazy situation where you find out how much BT charges for things by reading the minutes of parish meetings that mention the amount before they sign the NDA. You can tell that a green cabinet costs about £40,000, which is incredibly expensive, but they seem to be having this process to encourage people to pay them to build infrastructure without telling them how much it costs. I think that is wrong.

Q625    Damian Collins: Just one further question. I would be interested in your views on the mobile infrastructure project and why it has not been more successful in delivering masts in lots more areas. Mr Perrin, I can see you nodding there.

William Perrin: We are in a mobile notspot, pretty much, here—[Interruption.]

Chair: We have had the audience’s undivided attention as a result. [Laughter.]

William Perrin: In the neighbouring Stonor Valley, which was recognised as a mobile notspot formerly, the mobile infrastructure project engaged through planning consultants and reached out to Lord Camoys, who is lord of the manor of Stonor. His people offered up a site for a mast on top of the hill and then the mobile infrastructure project was pulled and it was not built. Stonor is interesting in some ways because it is archetypal of the reasons that Arqiva—the mobile infrastructure project—give, in that 15 years ago there was a strong campaign to stop the mobile phone mast being put in the valley.  That is common across the UK, and many areas that now find themselves without coverage have that history. In my discussions with a lot of people around the subject across the country, the problem comes from this top-down approach to planning that says, “Hello, little people, we’re coming to give you a mast. Here you go. You have to be grateful for it”. That rubbed a lot of people up the wrong way and people then start new planning campaigns, which did not happen here but we hear many cases of it. It is a classic case of supplier-driven rather than customer-led. It is a great shame. Internet consumption is drastically shifting to mobile. It is a very abrupt and sudden shift over the last three or four years—ask anyone who works in the media business about the scope of the change. There is almost a risk, apart from whether we are bringing the right bandwidth and wires to plug in, that we are looking at completely the wrong thing when it should be mobiletechnologies.

In Russell’s Water we have a gentleman who runs a modern precision-farming business. In the average tractor you will now see four or five screens and as the tractor drives itself the farmer will be doing his e-mail on an iPad, if she or he can get a signal. I am very concerned that the Government seem to have closed down the mobile infrastructure project—we don’t really know what has happened, but there is no announcement as to what is to replace it. If we as citizens, and I am asking this question of the mobile networks at the moment, want to get a mast in our community I have no idea how we do that. I get stuck with the contact centres; I get stuck with the government relations people, who pass me round; and I’ve got no idea how to fulfil that community need. It is even worse in some ways than talking to BT and BDUK because I have no leverage; no angle. It is a great shame and we need something to replace it but it needs to be more grass-roots driven and customer driven, bottom up.

About William Perrin

Active in Kings Cross London and South Oxfordshire, founder of Talk About Local, helping people find a voice online and a trustee of The Indigo Trust , Good Things Foundation and ThreeSixtyGiving as well as Connect8.
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