[This post is dedicated to Bass de Banaan]
A lot of microseconds after HFT in the Banana land, episode 4, here is episode 5. A lot of things has happened around the banana land since January 2016. Two months after episode 3 was posted, a new event occured in Richborough as another HFT-related company, New Line Networks (or NLN, a telco joint venture between HFT firms Jump Trading and KCG ex-Getco) filed an application to build another giant (305-meter) mast close to the Vigilant one. NLN filed the application on May 4 2016, four months after Vigilant arrived in the banana and. A lot has been said in newspaper about the frontral competition between two HFT-related firms in this quiet corner of the United Kingdom, so let’s do it will be as brief as possible. The two applications will be examined today at 6pm by the Dover District Council during the Planning Committee meeting, in Dover, where I just arrived.
THE HFT BATTLE IN THE BANANA LAND
Vigilant was the first firm to apply for a 325-meter mast in the so-called “banana land” of Richborough. The firm from Montreal decided to erect this tower there because the banana land is close to the straight line joining Slough and Richborouch (cf. the previous episodes). The Vigilant mast would be erected very close to the cooling towers of old the Richborough Power station (the towers were demolished in 2012 but in the picture below you can see them, with the Richborough Roman fort on the foreground). It seems Vigilant choose this area because it’s still industrial, meaning the firm tried to mitigate the impact of the mast on the landscape (old big towers replaced by one very thin tower – quite cleaver).
Then came New Line Networks with another tower, a bit smaller (305 meters), that would be erected in King Ends Farm (KEF), which is located at 1 kilometer from the old power station. That means two HFT firms want to erect two quasi-identical towers in the exact same area (one giant mast seemed a crazy project, two giant masts is obviously too much).
With NLN applying for its own mast, here starts the “new Eiffel towers” battle in Richborough. It was quite interesting to read all the documents both the firms filed on the Dover District Council website (Vigilant and NLN) to defend their projects (and to attack the competitor) – a one-year battle, or so. The most interesting is the way the local residents/politicians/authorities/institutions have been thinking about the giant towers, and as expected most of the residents don’t want them in their backyards. There are a lot of interesting (sometimes fun) comments, such as: “Such a mast would be an eyesore”, “HFTs are parasite, leading to flash crashes”, and “there is also concern over the visual impact of such a large structure given the proximity of Richborough Roman Fort as well as possible future adverse implications if Manston was to resume as an airport” and so on. At the end, the Vigilant application received 124 public comments (Objections: 101; Supporting: 21), and NLN 202 comments (Objections: 182; Supporting: 14). (At some point I send an ironic comment about the NLN mast, when it showed up in March 2016, I just wrote “I love you!” and you know what? NLN decided that it was a “supporting comment”! Very funny.)
So, the vast majority of people don’t want one (or two) giant mast(s) in Richborough. The local parishes were asked to adopt a position too, some objected, other supported (but the ones who support also say: “However, the Dover District Council would urge any businesses planning to build telecommunication masts to work together, thus reducing the total number of masts”. Note that if this is the Dover District Council (DDC) councillors who will decide tonight about the mast(s), and they do not have to follow the opinions of the parish councils. Also, a lot of “institutions” (Historic England, Natural England, etc.) wrote comments too, saying that, for instance, the construction of the mast would affect a local plant named Lotus corniculatus. There are also some issues about the Richborough Roman Fort (“The Environmental Statement identifies a potential significant effect on tourists and visitors to Richborough Roman Fort”), other issues about the possible reopening of the Manston airport (the masts would hinder the pilots), other issues about the new National Grid project named Nemo (cf. previous episodes), etc., etc. In short, both the firms had to file a lot of documents to comply with the demands – for instance, on June 9, 2016, Vigilant filed dozens of new documents, answering to the first comments/questions, which was a considerable work, and they did it well – kudos.
Of course, both Vigilant and NLN have a major argument: “benefits for the local community” – mostly: money. The new masts would offer a lot of benefits to the community: broadcasting equipments for Academy FM; broadband connection to the Phoenix Centre; educational support for at the Sandwich Technology School; a £100,000 financial support to enhance the visitor experiences at the Roman Fort (in fact, the Roman Fort officials does not want any mast around the fort, but if the DDC allows one mast, they will take the money). Vigilant states than a minimum of £2 million would be “transferred” to the local community “for the life time of the project”, i.e. 20 years. That means £8333,33 a month, and that’s not that much if you think about it – of course, I assume the firms will also have to pay rents to the owners of spots where they seek to erect the masts – I found no data about that – but compare £8333,33 a month for a giant mast with the €20,000 (Vigilant) and the €40,000 (NLN) will pay per month in Oostduinerke, Belgium, to put dishes on an existing building. (If you want to know more about the economic benefits of the NLN mast, read this). That said, Vigilant already gave thousands of dollars to local schools, whatever the DDC councillors will decide (or not) tonight, a kind gesture.
If the residents, conservationists and pilots had to fight against the masts, Vigilant and NLN fought against each other too. For instance, on December 2, 2016, Vigilant sent a document to the DDC where they criticize the NLN mast, saying that NLN forget to propose aviation warning lights on their mast (in case the Manston airport reopens), that the location choose by NLN is not good for the migratory birds, that the NLN mast would be close to the Richborough Roman Fort, and bla bla bla. That’s the game: as we can expect that two quasi-identical masts would not be allowed in the exact same area, the better project is expected to win, so Vigilant and NLN had to fight. We’ll see later today who will win – if there is a winner.
Oh, and by the way: beyond the real local economic benefits, what would be the benefits for a trading firm to have mast in Richborough? Simple question, simple answer: 5 microseconds, or so. That means the DDC councillors will have to decide if, as a competitor said, “looking at a 320m mast for 20 years is worth helping a trading firm gain 5 microseconds”. Tough question. Let’s over simplify and say that the total cost of a mast in the banana land would be £5-6 millions (construction, community outreach and goodies, dishes, legal stuff, etc.); that would mean saving one millionth of a second costs ± £1 million. That’s a lot of money for such a short period of time… or not – it depends on the money you can spend on such a project, and of course it depends on the money you can make by saving 5 microseconds (a lot I suppose?).
A lot of public and official comments urgently asked Vigilant and New Line Networks to work together on a single mast, as it’s totally stupid to erect two identical towers for two identical purposes. It appears that NLN and Vigilant talked together for a year, but there are still disagreements between the parties so they never never been able to agree on one project – even if the microwave provider firm McKay Brothers officially agreed to “work with” Vigilant (that means: Vigilant and McKay could share the mast, or even pay for it together), and even if Latent Networks (another microwave provider – let’s put it like that) seems to work with Vigilant now as they just asked for an Ofcom licence for a Richborough Power Station-Oostduinerke path. Too bad there is no agreement between Vigilant and New Line Networks, that’s probably not good for both of them (I think this point will be discussed in a moment).
THE DOVER DISTRICT COUNCIL OFFICER RECOMMENDATIONS
Last week the DCC officer published its recommendations about both the masts. Not surprisingly, the officer recommended that the applications should be REFUSED. Here are the reasons:
We will see what is the opinion of the DDC councillors in one hour (they may decide otherwise). The only strange thing here is that the Vigilant application is clearly better than the NLN one (I still think NLN came in Richborough to annoy Vigilant so that no mast would be erected in the banana land)), and Vigilant (unlike NLN) has a competitive advantage: they are ready to work with McKay, Latent and other third parties. Again, all that will be discussed later today.
FROM RICHBOROUGH TO CHICAGO…
On May 18, 2016, McKay Brothers’ CEO Stéphane Tyc gave a talk at the Terrapinn Trading Show Chicago, Exchanges vs Networks: The Intensifying Competition Between Determinism and Speed (watch the video here if you are interested by the microwave business and the speed of light – by the ay, the most interesting part is the second one, not about microwave).
At some point Stéphane started a discussion about the “new Eiffel towers” Vigilant and NLN seek to build in Richborough. After explaining the Oostduinkerke-Richborough path would be 100 km (versus 70 km for the McKay path between Dunkerque and Dover), and after two seconds of silence (this is a really long time for a microwave provider ;), he said about the Eiffel towers: “It’s crazy, of course… if you ask me”. Of course it’s crazy, as if NLN (as a provider) are allowed to build a mast there, they should be faster than Mckay, and that’s not good for McKay’s clients. He added that he wishes the local community/politicians would force Vigilant and NLN (and their competitors, including McKay) to work together to find a solution with one mast (now we know that will not happen). “Vigilant, they are very good” said Stéphane about the way the Montreal firm managed their project in Richborough. “They say, ‘look, it looked like shit before [the old Richborough power station area]… so we are not doing anything bad’” – I wouldn’t have used these words, but that’s a good summary. Then Oostduinkerke and this blog arrived on the screen:
What Stéphane didn’t know when he spoke in Chicago is that Mr. Eric Bellerive, Vigilant’s Director of Global Networks, was in the room, listening to him, and Eric was amused to see some attendees looked at him whereas Stéphane was saying the Vigilant project in Richborough was “crazy”. A funny moment between two fierce (but fair) competitors.
… TO OOSTDUINERKE
The picture above is the building in Oostduinkerke named “21” where both Vigilant and NLN are fighting to put dishes on the rooftop (read again episode 3 where I explained the Vigilant small mast on section 4’s rooftop would be erected just above an apartment owned by a family whose member is working at Optiver – a pure coincidence Vigilant didn’t know about, they probably had a real laugh when they read that on this blog). NLN is discussing with Section 1 and Vigilant with section 4. Both Vigilant and NLN filed planning applications; it seems like Section 4 is still reviewing the contract with Vigilant (through a law firm) while NLN was granted approval by the local authorities to put 2 microwaves dishes on Section 1’s rooftop on 12/21/2016 (a Christmas gift sent to the residents of this Section):
Amazingly, a local TV covered the Richborough-Oostduinkerke story (video in Dutch) and conducted an interview with the mayor, who basically said that the first Vigilant application was refused because the mast would have been too tall, so Vigilant proposed a smaller tower, and the mayor also said he’ll not tax the HFT dishes more than usual – Belgian people are cool. Here is the mayor in front of the “21” building:
The more interesting in Oostduinkerke is that Section 4 (the Vigilant one) received in February 2016 a call from a guy “with an inimitable Nordic accent” who wanted to know about the situation there and sent these words shortly after: “I understand that you have signed a lease option with Vigilant, and I was wondering if you and your lawyer would like to speak to us about the terms of your lease option and what value we might be able to add, if any to your association and others in the building. Let me be very straightforward with you: our outlook on the building is to attempt to lease all available footprint from every association. For the next two years we don’t want to place any equipment on the building, or make any changes. We simply want to pay you and the other associations a fee for this rental commiserate.”. Well. In March 2016 Section 4 received another call, from a Belgian contractor who said he was calling on behalf of a Polish guy working for a company “affiliated to an american firm”, and asked this question: “Do you think we could ask the Canadian firm if they allow us to put our dishes on their mast?”, which is a little bit strange (why they didn’t call Vigilant directly?). The other odd thing is that Section 3 (not involved in the story until this moment) sent a registered letter to Section 4, signed by a lawyer, saying that Section 3 wants to prevent Section 4 to accept the Vigilant dishes. The Oostduinkerke quarrel looked like Dallas at the beginning, now it looks more like a western movie.
THE VIGILANT PLAN B?
Amazingly, the day after the DDC officer recommended to refuse both the Vigilant and NLN masts on January 17, 2017, a new planning application was granted – not in Richborough but in Tilmanstone, between Swingate and Richborough. The application was filed on November 22, 2016 on behalf of Arquiva (a telco company who owns a lot of towers in UK, including the Swingate ones). Arquiva asked for a “5m extension to the existing lattice tower and the installation of 2 transmission dishes on the extended tower”.
Given the bearings of the dishes documented in the application, that really smelled HFT as one dish is watching to Dunkerque, and the other one to Slough (the only firms working on such paths around the Channel are HFT-related). Unfortunately, the documents filed in November 2016 mentioned “A new customer”, no name there – while most of the time it’s possible to find the name of the HFT firm asking for new dishes. I think the firm wanted to remain discrete – or they didn’t want a guy like me to find what was going on in Tilmanstone. But, on December 5, the Safety Compliance Certificate was downloaded on the DDC website and…
… a name showed up, Nova Scotia, and Nova Scotia is an alias for Vigilant. I got you ;) Now I could add a new location, Tilmanstone, on my map.
So, it looks like Vigilant has a Plan B to cross the Channel in case the mast Richborough is refused by the DDC councillors tonight. It’s certainly more difficult (technically speaking) to cross the Channel with two small towers (that’s the reason Vigilant wanted a 5m extension to the tower) compared to the 322-meter mast they hope in Richborough, but at least they can be sure that the residents won’t complain, and nobody will ask for Lotus corniculatus’ opinion there. Tilmanstone is not as close to the straight line as Richborough is, but compared to the Dunkerque/Doudekerque-Swingate path Vigilant built to cross the Channel, it’s a little bit better (are they saving 1 microsecond? or half a microsecond?). Looks like a consolation prize if the mast in Richborough is refused.
A LAST MOVE BY NEW LINE NETWORKS
On January 24, 2017, two days before today’s vote, New Line Networks filed two last documents. One is attacking Vigilant’s application on several points:
Beyond the technical battle about the stay blocks and bla bla bla, the most interesting part is this one:
First, it’s an answer to Vigilant who stated last year that a 305-meter mast would be too small. This is a fair point as there is no such difference between 305 meters and 322 meters, both the masts should be able to welcome the different dishes (after all, most of the competitors cross the Channel with smaller towers, except for NLN who has the 243-meter tower in Houtem); that’s said, NLN also says they are ready to extend their mast so that it would be 325-meter too. However, the argument about McKay Brothers is a bit facetious : 1/ if the Ofcom licence asked by McKay is indeed for a path from the NLN mast in Kind Ends Farm to Oostduinkerke, the licence can easily be changed to accomodate the Vigilant mast, and 2/ saying that both McKay and Latent want to put their dishes at 250 meters is a bit excessive because when operators ask for an Ofcom licence, the exact location of the dishes on a mast are most of the time approximative until the dishes are physically installed.
The other last file NLN submitted to the DDC is a 40-page (!) document defending their mast in Kings End Farm and the way they would create a “Community Interest Company” (CIC), a is a limited company which is created for community benefit.
NLN “propose that 50% of the net revenue generated from the lease will be made available to the local communities”. “As a minimum, we would guarantee £100,000 per annum being made available through the CIC, to the benefit of local people” and “if, for example, two additional financial network providers were to take up space on the mast, we estimate that the fund would provide an annual sum of £244,534 to the local community”. “After a lengthy discussion”, NLN “agreed that the six parish councils [impacted by the mast] would each receive a fixed proportion of net revenue, with the remaining funds allocated according to parish population. Specifically: – 5% of the net revenue allocated as a fixed sum to each Town/Parish Council; – the remaining 70% divided amongst them according to population size”, as shown in this slide:
“Should the application for the KEF Mast be successful, the Community Interest Company will enter into a collaboration agreement with the operator of the Mast [NLN] which will regulate the distribution of funds, embed the agreed commercial terms to provide income for the CIC, and distribute income for the benefit of the community”. But that’s not sure money will be enough to convince people and the DDC councillors. NLN requests that a verbal update is made at the committee meeting today. We will see.
THE LAST TRIP
I came from Brussels to Dover first by car (so I visited for the last time the HFT towers in Flanders, including the Houtem tower where all this story started), then I took a ferry from Calais to Dover and I arrived at the Ramada hotel which is near the DDC offices where the meeting will start in 45 minutes. This is the only hotel in the surrounding area, so I guess other people involved in the HFT world are there too. Perhaps I’m surrounded by an army of HFTs, who knows? Now it’s time to walk to the DDC offices. I’ll try to live-tweet the meeting if I can.
The Dover District Council refused both the masts. Vigilant: nine councilors against, one for. New Line Networks: ten councillors against, ZERO for. Crazy end for the HFT in the Banana Land story. More in a last episode soon.