Cost Plus – Return of the Engineers

Had a very interesting meeting today with some household name hardcore engineers, on the subject of NGA projects around the UK and likely projects worth considering for seed capitalising to create Community Interest PoWC (Proof of Working Concept) NGA deployments, over the next 3-6 months.

The purpose of PoWC projects are simple enough – as communities, businesses and Government at all levels from Parish Councils to Westminster, reach the stage of fully realising what the NGA transformation means (and therefore the opportunities being lost in every day by their local communities not yet having NGA), then PoWC serves to show what NGA means by doing and delivering – not death by powerpoint!

Now, from an engineer’s standpoint, making a product (eg. building an NGA First Mile network) has a defined cost plus a certain margin or surplus so that the business is sustainable – the product costs what it costs in other words.

What is interesting as regards telecoms is that a different pricing paradigm is commonly used – the so-called value-add model.

In plain English, find out what is the highest price the market will bear for the product or service being offered and that is the selling price, so long as that price also meets the cost-plus test (if you want to stay in business that is!)

The renewal of the UK’s First Mile telecommunications access infrastructure through the replacement of copper to the home with FiWi to the home is creating transformation on several levels:

The capabilities of NGA increase the telecoms value proposition for customers exponentially, bandwidth ceases to be a limiting factor, no more BBC iPlayer white dots dancing in a circle for example.

The process of renewal itself offers a once in a century opportunity for Cost-Plus businesses to enter the NGA market and claim their slice of the FiWiPie – it will be interesting to see how agile the incumbent telcos are in terms of adjusting their thinking to this coming step-change.

FibreCamp09

Here is some interesting footage that attempts to capture in 6 minutes a flavour of the first day of NextGen'09 in Leeds on 16th November, with a particular focus on the FibreCamp arranged by Brian Condon, Daniel Heery and Steve Spillane.



What is worth noting is the rising tide of interest in and support from Public Sector for NGA initiatives.

INCA Next Steps

There follows an open letter to one of the original project promoters regarding how best to ensure that INCA delivers Digital Britain.

Shaun,

Several key points and actions came out of the INCA ad-hoc pre-board meeting in Leeds on Monday that you very kindly invited myself and Saul Marchant to attend on behalf of the wider Third Sector and Community constituencies, alongside private sector suppliers of NGA build, carriers and operational services e.g. Red-M, LN Comms, FibreStream, Beeline BB with Andy Carter and the team at BIS.

Having discussed that meeting and the teleconference at length with other stakeholders, we have summarised the situation as we understand it as follows:

See here also http://www.fibrevolution.com/index.php/topic,72.msg220.html#msg220)

1 - BIS is considering funding INCA

2 - CBN has expressed its desire to separate from INCA at the earliest opportunity

For clarity, we believe that this should be extended to exclude CBN Directors from the steerage of INCA (including the Initial Board) for an appropriate period until INCA is formally and legally established. Thereafter, we would hope that the membership criteria decided upon by the Interim Board would see CBN's re-involvement in the organisation through democratic process or simply as members. With a suitably balanced interim board there may be advantage in having a single CBN member, based on their experience in setting up INCA so far.

2a. The responsibilities of the Interim Board (which require clear and transparent definition and discussion) would also include drawing up an initial business plan to ensure sustainability for INCA beyond the seed funding from BIS. It was stated on Monday by CBN that a figure of £40,000 had been "spent" by CBN during the preliminary work to establish INCA.

It is only reasonable that CBN is given the opportunity to present to the Interim Board any receipts for costs incurred. The Interim Board, Scrutiny Panel, Formal Board and BIS should all consider whether any or all of these costs are reimbursable or could be considered speculative risk, or even a generous donation. (It should be noted that £40,000 would be greater than 25% of the initial round of funding and payment of such a sum would restrict INCA's activities from the outset.)

Allowing CBN to submit accounts for its costs to be considered for repayment would therefore reiterate the need to separate CBN Directors from due process in the setting up of INCA. This will then permit the Interim Board and BIS to make a fair and just decision without vested interest.

3 - JON is a CBN proposal that is not funded by BIS and is separate from INCA

4 - LDS is a CBN proposal that is not funded by BIS and is separate from INCA

5 - INCA needs to direct its attention as a matter of urgency upon membership types and fees, respective criteria, exclusion policy and reasoning for such.

5a - The membership fee structure depends on defining the value proposition that INCA is to offer potential members, whilst demonstrating credible sustainability modelling. We understand this is currently missing/undeveloped from the INCA model/business plan

6. An Interim Board is to be formed as soon as possible from the wider forum of interested parties. A minimum of 6-7 persons has been envisaged.

6a. It has been recommended that the model for this is taken from BSG COTS (the Peter Shearman Plan). An Interim Board of a minimum of 10 self-elected members, across all stakeholder groups would seem admirable.

7. The Interim Board will complete all set up tasks to lay the foundations for the democratic election of the First Board and the launch of a legally established co-operative. This must include as an utmost priority the recruitment of members to the INCA co-op (or expressions of interest until the paperwork is completed) through marketing, widespread communications amongst the stakeholders, media and so on.

8. To ensure the right methods and vehicles are used, an independent scrutiny panel (not members of the Interim Board) should be established to monitor the actions of the IB on behalf of all stakeholders. The Interim Board must report in full to the Independent Scrutiny Panel all decisions proposed and/or taken.

The Independent Scrutiny Panel then continues to provide comfort and assurance to BIS that best value for Public Funding is maintained throughout its grant-enabled early life until INCA becomes fully self-sustaining from membership fees, revenue etc.

9. To date, there is open acceptance that INCA has failed in communicating clearly and comprehensively to stakeholders its purpose, agenda, structure and so on. This needs to be rectified, again using the Peter Shearman COTS model, by immediately making public the specific documents that Lindsey Annison requested from CBN prior to this week's conference, namely:

a) List of current steering group members

b) Proposed Foundation Board members

c) List of INCA key objectives and funding milestones

d) Pre-Christmas meeting dates for steering group as the now wider INCA Forum

e) Minutes (or Powerpoints) from previous INCA steering group meetings

To this end, and acknowledging both CBN and INCA's financial circumstances, a public area has been created at http://www.fibrevolution.com/index.php/topic,72.0.html for the upload of and access to the documents (see above section 9) required to move INCA forward.

In conclusion, the wider constituency polled feels that INCA has a useful role to play, dove-tailed into the BSG COTS process already underway, in helping to realise the BIS policy objectives of delivering upon the Digital Britain Report in the National Interest.

In order to achieve its aims, INCA needs to be established on an effective set of principles, scope and deliverables. It is hoped and intended that this can be achieved through the two safeguards of:

1. The Interim Board
2. The Independent Scrutiny Panel

Shaun, perhaps you would be so good as to circulate this message to the other participants from the Monday meeting in Leeds or alternatively provide their email addresses.

Kind Regards,

Guy

Approved by:

W Garrett

S Davison

S Marchant

M Purdom

L Annison

N Hall

A Waters

G Rewston

G Garrett

C Knowles

M Boswell