EU set to give antitrust clearance to UK rural broadband scheme

Summary:The EU competition commission is poised to allow the BDUK rural broadband rollout to go ahead with only minor changes, but will the decision make it any easier for smaller companies to challenge BT's dominance?

Europe is poised to give the green light to the UK's rural broadband plan, clearing the way for the BDUK project to go ahead after a two-month hiatus.

According to a report in the Financial Times on Sunday, European competition commissioner Joaquin Almunia is happy for the project to move ahead using partial UK state-aid funding if there are some minor tweaks to the process.

BT
The EU competition commission is poised to allow the BDUK rural broadband rollout to go ahead, but can anyone challenge BT's dominance in the field? Image: BT

This decision still needs to be given clearance by other commissioners, but this is seen largely as a formality and is expected before the end of the month, sources told the FT.

The British government has earmarked £530m of state aid funding for the BDUK (Broadband Delivery UK) to extend the reach of super-fast broadband into more rural areas. Overall, the scheme aims to cover 90 percent of the UK with 25Mbps or faster broadband connectivity by 2015, with the remaining 10 percent receiving at least 2Mbps.

The antitrust investigation, which began in July, arose as a result of EU concerns that the BDUK tender process was not competitive enough; incumbent BT has been the only company to be awarded any contracts for work. In most cases, BT and Fujitsu were the only two infrastructure providers left in the running. Fujitsu has yet to win a single contract.

However, the competition commission — which hasn't yet said what the requested tweaks will be — seems to be happy enough with the way in which agreements were reached, and for the framework to continue largely unchanged. Almunia's office had not responded to a request for information at the time of writing.

Barriers lifted

Once the EU approval has been given, the process can continue and work can begin on the bids that BT has already won, in Cumbria, Wales and elsewhere.

"BT is eager to deliver on its BDUK contracts and so it is encouraging to hear that progress is being made in Brussels. State aid clearance was always going to be required before work could commence, and today's report suggests it is imminent," a spokesman for BT told ZDNet on Monday.

"BT is eager to deliver on its BDUK contracts and so it is encouraging to hear that progress is being made in Brussels" — BT

If given the go-ahead, it will be the removal of the second barrier to super-fast connectivity in the UK within a week. On Tuesday, Ofcom and the mobile operators (along with Arqiva) managed to bring an end to the threat of litigation that had been hanging over the spectrum auction process for several years.

While the two decisions will help the UK get up to speed on connectivity, it remains to be seen whether the minor tweaks to the state aid funding rules for the BDUK process will make it easier for smaller companies, with less significant economies of scale, to compete with incumbents such as BT.

In September, suggestions emerged that BT has been trying to pass more of its BDUK costs on to the public sector than was originally proposed, and that it is inflating costs to try to pull in more state aid. In response, BT has said it is "ludicrous" to suggest it is trying to pass on the full cost of deployment to partners.

Topics: Networking, Broadband, Fiber, United Kingdom

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