BT have been left in a monopoly position over the rollout of rural broadband across the country that has been part funded by £1.2 billion of public funds according to a report by the Public Accounts Committee (PAC).
The Broadband Delivery UK (BDUK) scheme was set up by the government to help fund the rollout of fibre optic broadband to rural areas where it was not financially viable for BT, Virgin Media or other providers to roll out to with just their own money. The £1.2 billion BDUK pot of money to help with the roll out to these rural areas has in effect just been sent in the direction of BT as they are the only provider to have won any contracts.
The report by PAC initially raised concerns over the way the contracts were being awarded back in 2013, at this point 26 contracts for BDUK schemes had been awarded to BT, since then the other 18 contracts that have been put out to tender have also gone in the direction of BT too. Initially there were nine suppliers who were looking to bid for the BDUK funds but most of these dropped out and left the only real remaining one as Fujitsu, however they themselves had pretty much given up too which left BT to clear up all the contracts.
Another issue is the secrecy surrounding the contracts, BT stipulated that there was non-discloser agreements in place so councils could not talk to each other to see if they were receiving a good deal or not, this then makes it likely that more tax payers money will have gone to BT than perhaps needed to if there had been more openness surrounding existing contracts in place.
The other issue raised by PAC was that the broadband maps lacked detail which made it hard for other organisations to see where exactly BT would be rolling their fibre network out to and this hindered other schemes coming in to potentially fill in the gaps or offer faster speeds. They have said that the government needs to work with local organisations to make these broadband maps able to be searched down to post codes to help make it clearer where exactly will and won’t be covered.
A £10 million fund from the government to help get superfast broadband to the predicted 5% of the country that will not be covered by the existing Broadband Delivery UK (BDUK) funded programme has had more details revealed about it today.
The fund was originally announced in December by The Department of Culture, Media and Sport (DCMS) and today they have released a few more details as to who they want to bid for the funds. They are after companies who can offer alternative technology to help reach those in the final 5% of premises that will still need connecting. The potential technologies that will be looked at may include 4G, fibre direct to premises, improved fibre to the cabinet and extending it further down the network and also satellite.
Maria Miller, Secretary for State and Culture, Media and Sport, said:
“If we want to ensure that that all communities can benefit then we need to think imaginatively about alternative technology, and the pilots enabled by the £10m fund will be instrumental in helping us overcome the challenges of reaching the final 5% of premises.”
Currently the UK has a target of 95% coverage of premises with superfast broadband by the end of 2017, much of this has been done by BT & Virgin Media with their own fibre optic networks, however for the areas that BT & Virgin didn’t deem financially viable to roll out their networks to there has been a £1.1bn fund from the government to help extend the superfast broadband network to cover 95% of the UK. On the whole it is BT who has won the contracts for the government funds along with local councils having to match some funding too.
Chris Townsend has become the new Broadband Chief Executive, he was one of the people beind the London 2012 Olympic Games and will take on being in charge of the Broadband Delivery UK programme which also includes the extra £10 million for the remaining 5%.
Mr Townsend, said:
“Ensuring that broadband can reach businesses and consumers across the country is one of the most important policies in Government. Faster connections will improve the way people live, work and spend their leisure time. I look forward to starting my new role as chief executive of BDUK and building on the good work being done to get superfast broadband to people all over the UK.”
The first place to have their broadband upgraded to fibre through the BDUK funding is the village of Ainderby Steeple in North Yorkshire.
The unveiling of this new cabinet is the first to be done through funding from the Broadband Delivery UK (BDUK) pot of money that was set aside form the government to help roll out fibre optic broadband to areas where it was not commercially viable for BT to roll out to on their own.
BT won the contract for the funds for North Yorkshire in July earlier this year, having beaten Fujitsu to secure it. The pot of money set aside by the BDUK is £530m. The North Yorkshire contract was worth £17.8m from the BDUK, £10m invested by BT and £8.6m coming from the European Regional Development Fund. More areas of North Yorkshire are likely to have the new fibre cabinets also installed as part of the scheme.
Overall, the BDUK scheme has received criticism as so far all contracts for funding have been won by BT with Fujitsu even pulling out of contract negotiations in some instances.
Japanese tech firm Fujitsu have pulled out of bidding for the superfast broadband delivery in Cumbria leaving only BT left to bid for the funds.
Fujitsu believe they need to be able to reach 1 million customers for it to make economic sense for them to invest, they need this number to be then able to market their network to the likes of Virgin Media.
The governments “Broadband Delivery UK” scheme was set up to help fund the deployment of high speed broadband networks in rural areas of the country. There has been lots of criticism about the funding process for BDUK funds by other providers as it is just BT & Fujitsu who were whittled down to be able to put in tenders for the funds from an original 9 suppliers who had started out wanting to be involved.
Fujitsu themselves have only bid for 2 areas so far, Cumbria (which they have subsequently pulled out from) and North Yorkshire which is expected to see BT win the funds for anyway.
In June, Cumbria Country Council rejected bids from both BT & Fujitsu and gave them until September this year to provide a better proposal for, BT are now sitting in a far prettier position since they are left as the only contender for the contract now which is expected to be worth around £40 million when private investment has also been accounted for too.