Friday, June 10, 2011

BDUK pilot project tender notices - all four now issued

This week has seen the publication of contract notices by two more of Broadband Delivery UK's original four pilot projects, the Highlands and Islands and Herefordshire. The contract notices published previously by Cumbria County Council in March 2011 and NYnet (for North Yorkshire) in May 2011 mean that all four original pilots (as announced last October) have now gone to market. Wholesale provisions and related requirements for open, equitable and transparent access to all service and communications providers are common threads across all four notices.

One of the successful second wave bidders, Devon & Somerset, also issued a contract notice in March 2011, prior to its award of £30m additional funding by BDUK on 27th May 2011. The contract notice is divided into two lots, lot 1 being "Delivery of fast broadband to 4 rural areas as detailed within the ITT" and lot 2 "Delivery of fast broadband to 2 rural areas as detailed within the ITT":
"Funding contributions have been successfully sought from the European Rural Development Programme for England (RDPE) and Devon County Council's own resources, and tenderers must note that the RDPE physical infrastructure element of this project (Lot 1) must be completed by March 2012. Delivery of lot 2 must be completed by midsummer 2012."
It will be interesting to see how these five procurements will fit with BDUK's proposed procurement framework (see 8th June 2011 Industry Day slides at bottom right). Slides 20-28 illustrate how local procurements (such as the ones above already underway?) will proceed in parallel ("parallel call-off negotiation") with the implementation of BDUK's framework - "Local projects will drive much of the development of the final solution design and call-off contract development".

Does this mean that these local procurements, which will be seeking bids from suppliers likely also to be seeking to become suppliers on BDUK's framework at the same time, will be able to plug into BDUK's framework once it's complete?

BDUK second wave funding allocations - doing the maths

It's interesting to analyse the funding allocated to the three successful Broadband Delivery UK (BDUK) second wave bidders. According to the Department for Culture, Media & Sport's press release, issued two weeks ago today, funding allocations "are in the region of" £30m for Devon and Somerset, £15m for Norfolk and £4m for Wiltshire, with exact figures to be finalised in coming weeks.

BDUK's bidding guidance for the second wave, published earlier this year, had this advice for bidders:
"The Local Broadband Plan will need to identify the potential phasing of any capital funding sought from BDUK. The bid for funding should sit within a BDUK advised notional grant of £60 per premise, which can be flexed to take account of factors such as topography, population density and network architecture. BDUK is currently agreeing a funding allocation approach and expects to be in a position to confirm an indicative budget for BDUK funding allocations to local bodies on submission of their bids. BDUK would also be able to provide an indicator of what type/scale of requirement its modeling suggests may be feasible, within an overall budget that includes an assumption of additional public sector funding (arranged by the local body) and private sector funding (from a successful supplier) available."
So what's the origin of this notional grant of £60 per premise? Well, according to official government figures, there are currently 26m households and 2.1m businesses ("enterprises registered for VAT and/or PAYE in March 2010") in the UK. As we know, BDUK funding is intended for the final third of premises which won't be reached by the market's roll-out of next generation broadband. From the BDUK bidding guidance again:
"It is estimated that the private sector, given their currently published plans, will cover approximately two thirds of premises with access to superfast broadband by 2015. This leaves approximately one third of premises (or approximately 9 million premises) potentially within scope for public sector intervention in superfast broadband. We estimate that up to 1 million of these would prove too costly to rollout superfast broadband by 2015 and so are potentially out of scope for intervention in superfast broadband."
The total amount of funding available to 2015 is £530m, which a potential extra £300m available to 2017 if required; £530m divided by 9 million premises (the final third) gives approximately £60 per premise.

So how does this fit with the funding allocations made to the three second wave winners? According to official government statistics, the number of households and business premises in the three successful regions break down as follows:
  • Devon & Somerset: 882,000 households + 52,691 business premises = 934,691 total premises
  • Norfolk: 370,000 households + 21,569 business premises = 391,569 total premises
  • Wiltshire: 188,000 households + 11,049 business premises = 199,049 total premises
Some caution required, as the above figures relate to 2008; the household figures are available here  (Table 406: Household projections, by district, 1991-2033) and the business premises figures are here (go to Topics > Physical Environment > Commercial and Industrial Floorspace and Rateable Value Statistics). The business premises figures are based on five different types of commercial and industrial premises: retail premises, offices (disaggregated into commercial, and 'other' office types), factories, warehouses and other bulk premises.

So, if we apply the final third principle to these regions, we end up with 311,564 final third premises in Devon and Somerset, 130,523 in Norfolk and 66,350 in Wiltshire. Which is very interesting, as if you divide the respective funding allocations (to recap: £30m for Devon & Somerset, £15m for Norfolk & £4m for Wiltshire) by these figures, only one region (Wiltshire) matches the £60 per premise figure suggested by BDUK. The others are much higher - £96.29 per premise for Devon & Somerset and £114.92 per premise for Norfolk.

Of course, another (and much simpler) way to analyse this is to divide the funding allocations by £60 to indicate (?) the number of premises the grant is intended to support. For Devon and Somerset, this results in 500,000 premises and 250,000 premises for Norfolk (for Wiltshire, the result is the same as the previous calculation, obviously).

Which leads me to two possible conclusions: either that connectivity per premise is significantly more expensive in Devon, Somerset and Norfolk (doubtful), or (more likely) that significantly more than a third of properties in Devon, Somerset and Norfolk are beyond the reach of commercial superfast broadband roll-outs. Wiltshire provides a good fit with the final third model, whereas more than half of premises in Devon, Somerset and Norfolk will require intervention if superfast broadband services are to reach them. Percentage-wise, this equates to 53% of premises in Devon and Somerset and 64% in Norfolk. Final Two Thirds, anyone?

So, do BDUK's funding allocations provide a metric to illustrate differing degrees of rurality across regions? Interesting food for thought, you can find a spreadsheet summarising my calculations here.

Wednesday, June 08, 2011

At home with broadband - the importance of concurrency

I came across two excellent videos today, illustrating broadband's huge potential to transform life and work for households of the future.

The first, At Home with the NBN, shows the range of applications and facilities that Australia'sNational Broadband Network will make possible:

The second, published by the Broadband Commission for Digital Development, provides a neat three-minute overview of the transformational power of broadband:

The Broadband Commission for Digital Development's recent report, Broadband: A Platform for Progress, is also well worth a read, in particular its (non-exhaustive!) listing of more than one hundred studies examining the economic impact of broadband.

Both these videos complement this great illustration (which I've used many, many times) of the "all Internet household":

This was produced by EDUCAUSE for their pamphlet Broadband's Promise for America. It clearly shows how concurrency (multiple simultaneous accesses to multiple applications) will be the key driver for increased bandwidth requirements. A related EDUCAUSE report, A Blueprint for Big Broadband, provides a further useful summary:
"The Aggregation of Multiple, Simultaneous Uses Will Make Big Broadband Networks a Necessity: Many recent studies discuss why broadband is necessary for individual broadband applications (discussed below). While these examples are certainly accurate, the most important point is that consumers will require a multiplicity of these services simultaneously. It is the aggregation of several of these applications in the home that will drive the future demand for broadband.
Consider the following real-world scenario: A home in middle America may include dad watching a live HDTV football game; daughter using the computer to access streaming video of a college course lecture; son playing a real-time interactive game; mom engaged in a videoconference for her home-based business; grandma, visiting for the holidays, downloading an episode of Masterpiece Theatre; and grandpa hooked up to an uninterruptable medical video feed to a remote monitoring facility. While all these uses are taking place, the home appliances are being monitored and video home security devices are sending video feeds back to an emergency alarm center. Together, this single home could easily consume 150 megabits of bandwidth with only the uses we can imagine today. Homes of the future will likely include even more imaginative products and services.”
All these materials help to move the next generation broadband debate from the theoretical ("next-gen broadband is important") to the specific ("next-gen broadband enables new applications a, b and c"), and are therefore hugely useful.

The more folks that have access to higher bandwidth broadband services, the more these scenarios will become the norm. And who wouldn't want that?