Fibre at Perseverance Works

Perseverance Works Freeholders Limited Registered office 9 Perseverance Works 38 Kingsland Road London  e2 8dd

Fibre access at Perseverance Works and Printing House Yard: a proposal Summary This is an outline proposal and case study addressed to those administering the funds allocated to London to help companies get access to ultra-fast connectivity. This proposal is on behalf of 89 commercial companies working within a small complex of buildings in Shoreditch, London, known as Perseverance Works and Printing House Yard. This paper outlines what we understand our options are, the potential costs, and models under which we can get service delivered. It also serves as a request to the market for information on how FTTP can be delivered to all 89 premises, so that our own assessment can be verified and improved. Our proposal constitutes a request to be considered as a test case for BDUK Urban Broadband Fund to evaluate whether a voucher for a specific vendor or a grant/ voucher to support the installation of passives, which could then be used by any number of vendors supplying fibre, would best serve the long-term interests of customers. We think our particular circumstance would help BDUK and Ofcom to determine some of the policies needed to help accelerate the transition to a pro-competitive fibre access market.

Background The tenants of Perseverance Works and Printing House Yard are very supportive of the Secretary of State’s ambition for super connectivity and for more competition in the delivery of fibre access services. We are located in Shoreditch, home of a much-visited tech hub and the heart of London’s Tech City, and are a group of thriving businesses increasingly reliant on affordable connectivity to operate and develop our businesses. Our businesses are beginning to suffer from the poor performance of currentgeneration broadband. Although surrounded by fibre services including 2 FTTC cabinets less than 30 metres away, all our businesses are served directly from the Shoreditch exchange, some 400 metres away. The copper loops have not been rearranged and we have not been informed of any plans to do so. There is also a Virgin Media presence noted outside Tesco at 79–85 Hackney Road, some 500m north-east of our complex. Exponential-e have arranged for two of our tenants (Splice TV and 2

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Touch Digital) to have a fibre bearer for a business-grade Ethernet service. This is an Openreach fibre bundle and comes from the Shoreditch exchange. The costs of the private circuits (£12,000 for 100Mbps and £7,000 pa for 50Mbps ) are prohibitive for SMEs. There is a wayleave agreement with BT for ducting through our cobbled complex of buildings. Associate companies and business partners in European cities are being offered fibre access services for 30 euros a month (retail) with waived connection charges, while having a choice of fibre access provider. Our community needs the same to remain competitive. We have already lost a games company (Spov TV, whose credits include Call of Duty), who due to the connectivity restrictions moved premises. Perseverance Works is also seeking to include in the upgrade a number of Smart sensors to convert our building complex into a Smart building complex. Our expectation is that these will be a range of wireless sensors and will utilise a VLAN capability on the proposed FTTP connections.

Options we have identified 1. Openreach-based service On 29 April 2013 BT launched their Fibre on Demand service. This would suggest each of our 89 tenants could in theory pay £600 construction charge (because we are more than 400m from the exchange), a £500 connection fee, and a monthly rental in excess of the wholesale price of £38 a month. There is a 36-month contract. BT Fibre on Demand minimum term 36 months

Construction: £600 + other time-related charges if they occur

Connection: £500

Wholesale rental annual

89 companies

£53,400

£44,500

£456

Total BT Estimated Fibre on Demand cost (not yet surveyed)

This would provide Openreach with an effectively indefinite monopoly among all tenants on our site, where competition is restricted to the retailing of the BT-designed solution. We would welcome comments on our desire to use FTTP VLAN capability to manage our buildings smartly. We would also welcome measures to benchmark access costs with the more competitive markets in European cities.

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2. Virgin Media, Vodafone/Cable & Wireless We would welcome some indicative costing.

3. New private build An indicative quotation has been received for a third party to build and manage a local fibre access network. The estimates for build costs are for ducting risers and fibre patch panels to each tenant and the building of new duct. The cost per tenant is £1,500, which includes connection, and all active and passive components. The nature of the internet connectivity is not yet clear but our initial understanding is that there would more flexible options when configuring the available bandwidth. The split between passive and active components is 2/3 passive : 1/3 active. We would welcome a response from third-party providers such as ITS Technology Group, Fibre Options, Hyperoptic, Gigaclear and AFL, including indications of their ability and willingness to support Smart sensors. We are however concerned that this option would create another monopoly access provider. We would welcome comments on: the ownership of the network; benchmarking of prices with more competitive European cities; the transfer of assets on contract completion.

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4. Building operator model: passives supporting open access We are attracted to the option of ourselves providing the passive infrastructure to a national standard, whereby those passives could be then be used by BT, Virgin Media or another provider. We note the standards work conducted by the BSI and sponsored by HMG BIS. We would welcome comment from Emtelle and Miniflex, UK-based world leaders in the manufacture of optical access network components, on the viability of supporting the standardisation of passive components. We have an appetite to provision the passive infrastructure, but would need assurance that: 1. operators would use or be required to use the provided duct/risers/patch panels; 2. there would be interest from more than one supplier to provide services. We also note that Option 4 looks to be the closest to what would be approved for state aid. The delivery of passive infrastructure engineered to support more than one fibre access provider using shared duct and patch panels would provide the best and most future-proof solution without being tied to one supplier. We want to use this opportunity to comply with the objectives of FIT and would welcome joint proposals where the FTTP access and Smart building solutions could be installed in one. We understand the smart sensors will connect wireless to our routers and use a VLAN on the FTTP connection to enable our buildings to be managed smartly.

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Market Failure Two companies on site use private circuits from Exponential-e. One of them, Splice TV, uses a 100Mbps Ethernet service costing £12,000 a year. The transfer of TV-related programme data, while not time sensitive, does need high upload and download speeds. The other, Touch Digital, pays £7,000 a year for 50Mbps. It is perhaps a good example of how today’s business connectivity services are over-configured and overpriced for non-time-sensitive but bulk data transport. It also highlights that this is a new need, one which IP networking and fibre access make possible, but which the structures and interests of the existing business connectivity market may prevent unless government action like the Urban Broadband Fund is used to unlock or nudge in some way. The specifics of our site would suggest that there is market failure in the delivery of fibre access to the tenants of Perseverance Works and Printing House Yard. This particular case reinforces the view that current and future tenants of Perseverance Works and Printing House Yard would prefer to support a more pro-competitive model in which the tenants owned passive components which could be used by more than one networking vendor. While the BT investment is welcome, the positioning of fibre as a premium product is peculiar. Our competitors and associates in European cities have access to a choice of providers of 100Mbps symmetric services at less than 50 euros a month. We in Perseverance Works and Printing House Yard offer ourselves as a case study and pilot for BDUK, Ofcom and the GLA Urban Broadband Fund to encourage the market to support open networking principles and the development of the building operator model. We also offer a good case study for Ofcom to examine more closely the need for a new market definition and new pro-competitive models for fibre access in urban areas. We believe the implementation of the Smart building concept and the supporting connectivity, including VLAN capability managed by the building owners, suggests this is a new market, distinct from the existing connectivity market which focuses on point to point reliability. The new market is focused on any-to-any throughput, where the customer has far more control over how the available resource is configured and re-dimensioned if needed.

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Perseverance Works Freeholders Limited

Next Steps 1. We invite BT and Virgin Media to comment on and confirm the costs of provisioning FTTP services to all 89 companies in Perseverance Works and Printing House Yard. 2. We invite BT, Virgin Media and any other service provider to comment on whether they would supply their services using passives which have been provisioned to the BSI standard but which are the property of the building owner, and how this might change their pricing structure. 3. We ask BDUK (DCMS procurement) and Greater London Authority to use all 89 tenants at Perseverance Works as a specific case to test incentives for the ‘super connected cities’ programme. We are happy to work with you to test solutions for all four options. 4. We invite Ofcom and DCMS (policy makers) to comment upon and support Option 4. We see the building operator model as a potential means to create a new competitive dynamic for the provision of fibre access. 5. We would like those interested in the FIT programme to outline their SMART solutions including the management proposals. Some site data is shown in the appendixes on pages 8–10.

Contact us Please contact Paul King, chair of directors of PWFL, or Mike Kiely with any questions you may have. We are happy to host meetings or give tours of the site. Please mark any data you wish to keep confidential as such. Our intention would be to make available to others as much data as possible so they can learn from us. Paul King [email protected] 07860 538888 Mike Kiely [email protected]

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Appendixes 1. Current connectivity Serving Exchange: Shoreditch – CL SHO, includes some FTTC cabinets in area. Telephone number ranges on site: 7739xxxx, 7729xxxx, 7613xxxx Distance from Shoreditch exchange: 300 metres Distance from nearest fibre cabinet: 10 metres, but customers are served directly from exchange Location of cabinets: the nearest is on the opposite side of Kingsland Road under the railway bridge, at -51.527870, -0.078181; the next nearest is on the junction of Hackney Road and Columbia Road, at 51.528404, -0.075510. There is a Virgin Media (CATV) manhole cover outside 79–85 Hackney Road (Tesco). Handover Point: not yet established Line types: direct from exchange – ELO Number of businesses in Perseverance Works and Printing House Yard: 89 Current site access providers: BT and Exponential-e.com. There is a Virgin Media (CATV) cover opposite 79–85 Hackney Road. Duct entry points to building: see Map 5.

2. Details of Shoreditch exchange from SamKnows.com

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3. Route between Shoreditch Exchange and Perseverance Works

4. Satellite view of site FTTC cabinets are located under the rail bridge on the opposite side of the A10 Kingsland Road, and at the junction of of Columbia Road and the A1208 Hackney Road.

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5. BT ducts serving fibre for Exponential-e

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6. Businesses at Perseverance Works and Printing House Yard Perseverance Works Adam Tolner ADi Solutions and Audio Visual Ally Scott Amrita Dzong Andrew Twort Armstrong & Co Atelier Ten Atomic Supersonic Limited ATWWW UK Ltd Ben Broomfield Photography Ben Smith Bobrick Washroom Equipment CAMPAIGN Capital Models Casting East Central Illustration Agency Charlotte Tiffany Chris Knaggs Christine Hanscomb Communication By Design Ltd Courtyard location hire Crescent Lodge Design Crispin & Gemma Crystal Digital East-Side Educational Trust Ellison/Lee Eugenio Franchi EverythingInBetween Faith House Fearlessly Frank First Option Studio Forma Leather Ltd Gail Smith Flowers Gatehouse Henley Halebrown Rorrison Hypsos Ltd ISO Solutions Ltd Jane Wernick Associates jj Locations jj Locations – jj Base jj Locations – jj Loft jj Locations – jj Roof

jj Locations – jj Zone Justin Barton Leo Acker Leonard Jones & Co Location 18 London Media Press Ltd Longdan Express Louisa Parry Magpie Studio Martin Scott-Jupp Master Mono / Melvin Cambettie Davies Matthew Lloyd Architects LLP Microzoa Limited Newtecnic Ltd Nine Yards Olivia Hemingway Pat O’Leary Paul King Photolease UK RDN Chauffeurs Ltd Redshark TV Sam Baguley Same-Day Company Service Ltd Sanders Nicolson Sculpture Factory Sigma Sinisa Savic Splice TV Studio HB Sturgis Associates LLP The Clear Agency The Milton Agency The Shoreditch Them Design Limited Thorneycroft Bell Touch Digital Ltd Travel GBI Union Model Management Up on the Roof VOGT Landscape Volunteer Reading Help 3 PW studio

Printing House Yard Adam Tolner Imaging Andy Crawford Photography Armstrong & Co Cadis Software Ltd Dixonbaxi Ltd Gatehouse Consulting Ltd Investmaster Group Ltd James W Parsons Ltd Jane Wernick Associates Justification Ltd Kim Sangster Associates Ltd Leonard Jones & Co London Media Press Ltd Photolease UK RARE Design Associates RDN Chauffeurs Ltd Sell! Sell! Splice TV Them Design Ltd Union Model Management Vashca Ltd @WWW

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Acknowledgements We would like to thank Andrew Twort, who initiated our proposal for fibre access at Perseverance Works and Printing House Yard, and Mike Kiely, who has helped compile this document. Mike is concerned with assisting customers, industry and government develop the components, standards and policies needed to support and accelerate the transition from copper to fibre access. Paul King Chair of the directors, Perseverance Works Freeholders Limited

www.perseveranceworks.co.uk

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