Fibrecity Bournemouth and Dundee

Just found out that both Fibrecity projects have been suspended indefinitely due to apparent technical issues- sounds more like financial issues to me though, but both are on hold with Dundee certain to be cancelled and Bournemouth up in the air given that it is part way through.

Care to email me any details that cannot be posted on bbs, and will enquire some more

A few links. Dated around August. Not sure if they help or confuse though.

http://www.computing.co.uk/computing/news/2268132/bo...

http://www.pcpro.co.uk/news/broadband/360298/fibreci...

http://au.i3-asiapacific.com/news--media/news/scotti...

I can't see anything which says the Dundee end of things is stopping.

Local Dundee Newspaper Site (Dated 1st Spetember)

Here's a Beeb one from 20th September on Fibre rollout to cornwall:

http://www.bbc.co.uk/news/technology-11435640

i3, the firm behind the FibreCity projects, said that deals signed with other water firms remained secure.

Which is very different to the company folding, in August the roll-out was continuing in Bournemouth as a traditional FTTP roll-out, i.e. trenches in the pavement, and was being unpopular with residents for this reason.

No email giving any more details, so for now its just another internet rumour

In reference to www.eveningtelegraph.co.uk/output/2010/10/26/story15908559t0.shtm:

Confusion over Fibrecity future
Confusion today surrounded the future of the Fibrecity Dundee project, with claims that 150 workers have been laid off.
The company funding the multi-million pound scheme, i3, said operations had been �delayed slightly� for restructuring purposes.

But furious workers, taken on to lay the company�s superfast broadband cables, claimed they were given seven days� notice to tidy up sites around the Coldside area of the city and will be out of jobs by the end of this week.

For full details, see tonight�s Tele.

http://www.bournemouthecho.co.uk/news/8474151._Long_...

�I want to make it clear that this is a long-term commitment, and we will continue to publicise the project so as to help with understanding just how this will transform the communications network in the town.�

http://www.broadbandchoice.co.uk/news/bournemouths-f...

Ta will chase for official comment on Wednesday have been out today looking at other stuff

I've read the I3 statement and I can confirm this is much more than a restructure, there are issues across their whole operation that have also led to the 'postponment ' of H2O network projects as well as the 2 Fibrecity's, from what I'm hearing they are in serious financial trouble.

In reply to a post by camieabz:

http://www.bournemouthecho.co.uk/news/8474151._Long_...

�I want to make it clear that this is a long-term commitment, and we will continue to publicise the project so as to help with understanding just how this will transform the communications network in the town.�

They say they are connecting 4000/month. Is that actual live customers or just cabling?

http://www.broadbandchoice.co.uk/news/bournemouths-f...

I'd say its homes passed, rather than homes signed up and buying service.

Its clear looking at questions people have about email addresses, that unless their existing ISP is on a new infrastructure they don't sign up. The number of tech geeks who will jump at the chance is pretty rare

In reply to a post by MrSaffron:

Its clear looking at questions people have about email addresses, that unless their existing ISP is on a new infrastructure they don't sign up.

I'm afraid I can't make head or tail of that. Care to have another go?

Is there any independent evidence that there are any actual live customers? There is an alleged coverage map (for Bournemouth) elsewhere on t'Internerd but it hasn't been updated since June:
http://www.fibreforum.co.uk/?page=maps

Shame really, this lot are spoiling the game for any more serious but lower profile players who might actually be in with a chance of delivering, e.g. Rutland (Weekend?) Telecom.

To rephrase, people become attached to their current email addresses, and hate changing them.

Not seen a live user post on forums, and all I've heard is that people have live fibre that lets them see the portal and can sign up to retail providers from there. Some people surely have signed up.

Most of what I've seen on Bournemouth has been moans over the pavement trenching

They were installing outside a friends commercial building today when they were told to pack up by some foreman, who advised them that the company had gone bust....

Bournemouth or Dundee?

I wonder if any readers have (work)? access to the usual suspects' business credit reference agency data, which might be able to shed a little more light on the state of the i3 empire. Phil/Yarwell reported a year or so ago that they had £millions (3?) in borrowings, and presumably they have contractors and suppliers to pay in Dundee and Bournemouth, but they have no significant visible means of support at the moment (and indeed no obvious means of short term cost recovery even if/when lots of people sign up).

OK lots of businesses make a loss in the first couple of years, but there has to be some light at the end of the tunnel/duct, or...

In reply to a post by BatBoy:

Bournemouth or Dundee?

Bournemouth.

It's game over unless you see people working again..

With FTTC rolling out and Bournemouth being a VM area how many customers did they expect?

500 so far according to one newspaper report.

If they had got everything up and running 12 months ago they stood a better chance, there is still a chance they will re-appear doing the work, but admittedly based on what happens in other cases that appear like this, it would appear slim

If i have phone, broadband and TV with VM why change?

If i have a Sky package why change?

etc...

price and service are the usual reasons to change...

It has been suggested that the Government pulled the funding...Figures..

Suggested by who?

What "government funding" was this?

Where is the evidence?

On the other hand in current banking circumstances I could very easily be convinced (without much evidence at all) that their bank loans (£millions?) have been called in, which would likely be the end of their business plan.

No previous sign that the company was receiving funding for Bournemouth and Dundee.

There is a project in North Wales where assembly funding might be withdrawn, but that is more likely to be a side effect of concern over the firm.

There is some expectation of "support from the public purse" in the Anglesey project. WiMax is involved too which sometimes means there is funding from Intel Capital (e.g. Pipex Wireless's WiMax in Warwick and er... anywhere else?).

http://www.computing.co.uk/computing/news/2271126/i3...
" i3 Group's CEO Elfed Thomas explained: "Consumers in not spots can receive up to £700 to put towards broadband connection, we indirectly benefit from that.""
(anybody know the details of this scheme?)

http://www.i3-group.co.uk/news--media/news/i3-group-...

That is just one of the three projects that are well known, any cross use of this to fund other projects is a pretty serious thing

In reply to a post by MrSaffron:

That is just one of the three projects that are well known, any cross use of this to fund other projects is a pretty serious thing

If the Govt. funding is withdrawn from one project, it will have to be funded from the same pot the other two are, or shut down.

Not sure how accurate this is:

http://www.thecourier.co.uk/News/Dundee/article/6770...

Edit: Dated 27th (Wednesday).

Edited by camieabz (Sun 31-Oct-10 13:00:16)

In reply to a post by BatBoy:

price and service are the usual reasons to change...

Maybe people think that BT FTTC will come soon and they can keep their existing ISPs.

In reply to a post by BatBoy:

price and service are the usual reasons to change...

Maybe people think that BT FTTC will come soon and they can keep their existing ISP.

No previous sign that the company was receiving funding for Bournemouth and Dundee.

weren't all these projects touted as partnerships with councils ?

Perhaps council use of the infractructure, rather than a grant or subsidy, as per :-

"City of York Council has signed a £13.7 million, eight year contract with the option to extend for a further two years with Pinacl Solutions and H2O Networks to provide it with a managed service environment for networking across the city-wide Council's estate which includes 67 schools, 14 libraries, accommodation and council offices as well as sports facilities."

from here

That would be an eight year contract to supply services, rather than York funding a wider roll-out.

H2O was fairly successful with its business services. So its see where things go, I would not be shocked if it was a re-focus to remove FibreCity and just focus on the business side of things, or only enable wider areas when partnership funding is available.

The window of opportunity has vanished now, VM cable speeds and the BT fibre roll-outs mean that unless targetting a final third area you will have two or three competitors.

"H2O was fairly successful with its business services."

Well yes. Cost per connect doesn't really matter much when there's only a handful of endpoints and the customers are willing to pay LOTS for bandwidth. Change to a mass market retail model and you can't afford £500 (or anything like that) per customer connect. You can only afford microtrenching, and even that's arguable.

"The window of opportunity has vanished now, VM cable speeds and the BT fibre roll-outs mean that unless targetting a final third area you will have two or three competitors."

Hence the not-spots trial on Anglesey?

Except their earlier silliness has destroyed any credibility they might have had?

If the sewer agreement for Bournemouth had gone through I think Bournemouth roll-out would be more attractive.

Remember at this time the company as far as anyone is saying publically is still a going concern, so don't write them off totally yet.

In reply to a post by MrSaffron:

If the sewer agreement for Bournemouth had gone through I think Bournemouth roll-out would be more attractive.

Remember at this time the company as far as anyone is saying publically is still a going concern, so don't write them off totally yet.

I believe you are correct with your summisation that they will disbnd the Fibrecity concept altogether.

From what I'm hearing if and I am told it's a very big if, they can get a refinancing deal put together, they will purely concentrate on the business side of the market through H2O Networks but again with all H2O Networks projects currently suspended it will take some time to rebuild consumer confidence in their business.

Just one point on the use of sewers, the Fibrecity model will never really work with sewers as the number of cables needed is far too great especially given that smaller sewers can only take single cables.

The use of sewers is though perfect for point to piont or Fibrering type installations as the cost savings can be huge and certainly give any Telecommunications company a distinct advantage over their competitors if they can install in the sewers

[a different anon]

Apparently it's not quite £500 per connect. Courtesy of a link herdwick recently posted on the i3 news article, we know that i3 say "we have connected homes using our sewer based technology for around GBP£350 and GBP£450". Frankly I reckon that makes the original £500 per customer guesses round here a damn good guesstimate; either way £400 vs £500 is not going to massively change the economics of their business plan(s).

What's not 100% clear is where they draw the line between "sewer based technology" (which hopefully is fine for a simple network with a few access points) and a mass market technology where everyone gets a possible access point (where they've, entirely predictably, not been using the sewers).

http://au.i3-asiapacific.com/news--media/press-relea...

Any news?

Also, according to your news item dated 6 Oct, i3/h2o/whoever should have been going live about now with their WiMax/4g trialists on Anglesey. Don't suppose there's any news from there either, is there (nothing on the i3 website news since 14 Oct, talking about Brisbane)?

http://www.thinkbroadband.com/news/4412-anglesey-set...

No news that I can see, did see something about two director's leaving but given the delay was for a re-structure then that is expected.

A case of wait and see

Bournemouth Echo yesterday:

http://www.bournemouthecho.co.uk/news/8706262.___A_l...

Ignore what is being spoken of about the Wessex Water issue- it is a cover story, the i3 group has had and still has major financial issues and owes huge sums of money to creditors all over, dont forget the Fibrecity project in Dundee was also stopped yet there was no issue with the water company there- Scottish Water, in fact i3 made a point of telling everyone how good the relationship was with them there.

Given the stories I am hearing the last thing anyone should do is commit money to this company.

Any new information on financial problems?

I heard they are going into bankruptcy

I read that their management is having a buyout and things are being 'delayed'

http://www.bournemouth.gov.uk/News/press_office/Pres...

management buyout ? Last time I looked the shareholders were the management.

This is the latest I have on the situation, H2O Networks which was the arm of the I3 group delivering fibre for commercial and private businesses has been sold off to a group led by the i3 Groups former CEO, he had previous left the company late last year and so this is not an MBO.

From what I'm told the whole Fibrecity concept is dead in the water and I3 are now looking to shut down both Dundee and Bournemouth as quickly and as cheaply as possible, going forward they plan to purely concentrate on their overseas operations.

i3 Group announces sale of UK subsidiaries Fibrecity, Opencity Media and H2O Networks

Monday, 24 January 2011
i3 Group has today announced that City Fibre Holdings has acquired the shares of the Group's UK subsidiaries which include Fibrecity Holdings Ltd, H2O Networks Ltd, Opencity Media Ltd and Wireless Network Systems Ltd. The sale was completed on Thursday 13th January 2011.

Of the sale, Elfed Thomas, CEO of i3 Group says: "I started this business back in 2002 in order to focus on developing low cost methods, including the use of ready-made ducts, to build dark fibre optic networks to bring super fast connectivity to homes and businesses.

"This sale to City Fibre Holdings brings the i3 Group's business in line with our international approach. I decided to concentrate on a licensed technology model withdrawing from the actual build of fibre optic networks, while allowing our licensed partners and other infrastructure specialists, to benefit from our fast to build and low cost methodologies of fibre deployment."

City Fibre Holdings is a consortium led by Greg Mesch, former President and COO of i3 Group. The management team of this new company has extensive experience of building highly successful fibre optic based next generation networks including involvement in founding Esat Telecom and Verastel Telecom. Greg Mesch is also Non Executive Director of EuNetworks Group, a public-listed fibre optic based operator in 13 major metropolitan markets around Europe. City Fibre Holdings' strategy will be revealed over the coming weeks.

Fibre Associates, i3 America, i3 Asia Pacific and i3 Europe will remain part of the i3 Group. i3 Group will still have its head quarters in the UK.

Thank you for posting that (it does look official, it's on the i3 website, URL below).

I suspect I may be speaking for many others when I say

What the flipping heck?

As for the quote from Elfed: Who's going to be interested in licensing technology which has been proven a (predictable) failure in both places where a semi-serious commercial rollout has been attempted?

I can see how sewers can be attractive for links with a limited number of access points, but for mass market connectivity this was (and is) never going to be cost effective.

Any word on the Anglesey WiMax trial and which side of the divide that fits?

These guys are giving cowboys a bad name.

btw i3, it's Versatel not Verastel. Not that I'd expect you to care, but Greg might.

http://www.i3-group.co.uk/news--media/news/i3-group-...

sorry, meant to say alleged Anglesey Wimax trial.

I am guessing that the Anglesey service is under the Wireless Networks banner, i.e. part of the sale

Bournemouth council calls emergency meeting over fibre connection

It all sounded so good on paper. Fibrecity was a project from the i3 group which was designed to offer 100 Mpbs Fibre to the Home (FTTH) technology in some of the most modern cities in the UK, but the project has hit multiple barriers in the last year which has caused the council at Bournemouth to raise serious concerns about the service, who have called a meeting with the firm this week to talk about the issues concerning the work that’s been doing and damage caused to the infrastructure of the town and the road network. Had the company’s idea gone to plan, many more citizens in Bournemouth could have been enjoying fast and cheap broadband with no phone line services by this point.

The project has been having problems in both Dundee and Bournemouth in the last years, and firm went into a period of restructuring which again has taken far longer than many were expected. Most of the issues have revolved around the poor quality of the road work undertaken by the company which has resulted in many angry residents around the areas where fibrecity has been digging to place the new FTTH cable. Fibrecity had initially planned to use the Bournemouth sewer network in order to lay the cable, but after deals feel through last year they began the process of digging trenches in roads in order to lay the cable. This is obviously a far more expensive route and cost cutting from the company to account of this is believed to have led to the poor work on the roads.

This damage is to be discussed in a meeting this week. A city councillor, Peter Charon, commented:

“We have been concerned over the project since the work ceased in October 2010, leaving a number of roads and pavements needing remedial work. As Fibrecity is a statutory undertaker we are unable to prevent the work, however we will be insisting all the works are carried out to a high standard and, where this is not the case, additional work carried out.”

Mr. Charon also commented that the lack of communication from the project about the status of the restricting was unacceptable and the growing uncertainty of the projects future was major concern to the council.

Meanwhile, for those who are eagerly awaiting the FTTH service in the city, the company hasn’t actually laid any cable since October last year, so you might be waiting for quite some time yet!

Part of that text comes from http://www.bournemouthecho.co.uk/news/8804956.UPDATE... which states that the streetworks contractor is owed £0.5M. Whoops.

"As Fibrecity is a statutory undertaker we are unable to prevent the work"

Can this really be true? Surely it fails on two grounds: (1) surely there must be a method for withdrawing code powers from an operator whose quality (or whose subcontractor's quality) consistently fails to meet the required standard (2) surely code powers must *automatically* be withdrawn (and reinstated after reapplication) when an operator changes ownership?

Or were Ofcon as incompetent when they drew up these rules as they are at everything else?

if the code powers are granted to X Ltd then it doesn't matter if X is owned by Y and sold to Z.

Cheers for that Phil.

I presume it's also safe to assume there's no mechanism for withdrawing code powers due to poor quality?

It's not good news for Bournemouth then.

How naive can the people have been that set up these rules? I mean even if the re-approval process on change of ownership were to be little more than a nod and a wink and a cheque, at least there'd be *some* opportunity to prevent continued chaos in cases like this. I'm pretty sure that I've seen clauses like that in corporate sales/discount agreements, it's not exactly rocket science.

As for the credit control department who were daft enough to end up with £0,5M owed from i3... whooops. There are other words too but not so polite.

Those that are granted code powers have to put some sort of financial instrument in place to cope with things such as this as far as I understand it.

indeed,

"But there is a
requirement under the code regulations for operators to ensure that sufficient
funds are available to meet any liabilities should any particular operator cease
to trade or have its code powers revoked. This requirement is set out in
Regulation 16 of the conditions and restrictions regulations and is termed
�Funds for Liabilities�. Regulation 16 places a primary duty on operators to
satisfy the Director of Ofcom that arrangements have been put in place to
ensure that sufficient funds are available to Highway Authorities after the
occurrence of a relevant event to meet the liabilities that arise for up to three
years after the event has taken place. Failure to comply with Regulation 16
can potentially lead to the grant of code powers being revoked by Ofcom. "

http://www.bis.gov.uk/files/file13246.pdf

So there's no requirement for funds in an escrow account, or proof of insurance or whatever, only a requirement for "Ofcon to be satisfied that there are funds to meet any liabilities"?

Hypothetical scenario: company1 says to Ofcon "we're financially sound", Ofcon take it at face value, and grant code powers to company1.

Two years and various unfinished works later, company1 "restructures" itself, and selectively transfers its assets and liabilities to company2. Company1 and company2 both deny all responsibility for the unfinished streetworks and point at each other. Company3, the company contracted by company1 to actually do the street works, are also unpaid and left looking somewhat foolish. Whose responsibility is it to make good the unfinished streetworks?

Sounds to me like Ofcon fouled up and they should pay the price to fix it

Sensible people wouldn't buy double glazing (or a package holiday) on this basis let alone grant someone an unlimited non-terminating licence to dig up the streets.

Whose responsibility is it to make good the unfinished streetworks?

Highways Authorities (who have a legal responsibility for ensuring the highway is safe).

http://www.legislation.gov.uk/uksi/2003/2553/regulat... covers the funding of such works

Edited by yarwell (Sun 30-Jan-11 11:42:06)

It's the legislation, if anything that's at fault. Although a newish 2003 Act, I suspect the initial rules came from the time that cable was being installed in an atmosphere where light touch regulation to "encourage" BT competition was the flavour of the day. Working in local government in those days I remember the "fight" to ensure the multiple cable operators did proper reinstatement, and to get them to pay for the employment of a local monitoring officer (by negotiation) as the installers management supervision was so poor.

The privatised water co's south of the border are going to and (as with any commercial company) HAVE to say "what's in it for us?". If nothing then almost always no deal, and if any liability then definitely no deal.

A few points:
1. I'm fairly sure there will be some form of surety, but again from experience it's a prolonged effort and a long time to get them to pick up liability (after all they're usually banks and insurance companies - known for their promptness and sensitivity to the interests of the community, after the interests of their share/policy holders, aren't they?) or it might even be a parent company guarantee!!.
2. A new company in order to be granted powers (as far as I can see a licence can't be transferred) will need to make an application which Ofcom have to advertise and invite responses, so there's an opportunity for you all!
3. It seems to me this is the reason for the delay and why a date for work to restart cannot be given (If apparent to me this should all have been apparent to Bournemouth Council!).
As usual I expect different rules apply in Scotland.

One further thought, anyone interested could try an FOI to access information/correspondence held by Ofcom, though they'd probably try to withold information because of prejudice to the Code Operators business or even prejudice to their own enforcement (if they bothered to respond, which they have a duty to do, so perhaps that wouldn't show much respect for the law), but I'd like to see the argument!

http://www.thinkbroadband.com/news/4574-funders-for-...

Funders for H2O Networks face Serious Fraud Office investigation
Tuesday 15 February 2011 12:19:33 by John Hunt

A new twist has been found in the changes that have occurred at Fibrecity and H2O Networks, with the companies being sold off by the i3 Group early this year. Total Asset Finance, the principal funder of H2O networks who had been working to deploy fibre networks through the sewer systems in the UK, have gone out of business owing £133 million to the Belgian bank KBC from whom it obtained loans. More than £91m of funding from Total Asset Finance had been used by i3 Group who owned H2O networks along with Fibrecity Holdings.

Toward the end of last year, H2O/Fibrecity announced a delay to fibre roll-outs citing a company restructuring which coincided with the freezing of assets belonging to Total Asset Finance. The Serious Fraud Office got involved and in November secured books and records for Total Asset Finance, which is now in administration. Administrators say they will be looking closely to see if there had been any misconduct by the company or its directors.

The i3 Group sold the UK subsidiaries to a new company City Fibre Holdings in January which is headed up by former President and COO of the i3 Group. Administrators said they were in discussions with City Fibre Holdings over money owed to Total Asset Finance by H2O Networks, but City Fibre Holdings confirm they are not part of the investigation.

"City Fibre Holdings and its management team are not the subject of any investigation. The company is focussed entirely on reorganising the companies and the financial structures that it has inherited. This critical restructuring of these newly purchased businesses will ensure that they can continue to be leaders in fibre-based next generation access networks."
Greg Mesch (Chief Executive) City Fibre Holdings

City Fibre Holdings have previously stated that they intend to continue the roll-outs in Bournemouth and Dundee that H2O Networks had started. Whether this will still be possible without the previous funding for the company and with money owed to Total Asset Finance is going to be interesting to see.

"More than £91M" had been used by H2O and related companies.

What on earth could they have spent it on? What has anybody got to show for it? It was clear that H2O's mass market business model was nonsense because of the cost per connection, but how easy is it for a relatively small relatively low tech business to make £91M disappear?

H2O has been using the sewer connectivity for businesses - so it is possible that some of these were loss leaders in an attempt to stimulate the market, not unusual for a new business to sustain a loss.

Where £91m has gone - that is for accountants to figure out

I am no friend of H2O but the technology involved with running fiber through the sewer makes sense. It has been tested and seems to work and using sewers as an alternative to trenching is a great alternative. The idea of creating an "Open Access" network is especially appealing as it creates a competitive environment for providers within a community.

As far as the fraud and where all that money went - we will see as the investigation progresses. It is my understanding of the article that the Middle Man banker is the one that did the fraud. That being said - there is an ongoing investigation that also involves the principals of H2O. It will be interesting to see what the investigation finds.

In the event the owners of H2O were involved - they should spend a long time in jail just for screwing up this opportunity to create a truly competitive network alternative.

The idea of creating an "Open Access" network is especially appealing as it creates a competitive environment for providers within a community.

It also has a track record of failure to deliver providers that consumers are aware of, leaving networks floundering for customers. SYDR and others.

RIP www.fibrecity.eu

wonder if there assets will go up for sale?