BT accused of inflating super-fast broadband costs to win state cash

BT accused of inflating super-fast broadband costs to win state cash

Summary: A leaked Broadband Delivery UK (BDUK) discussion document reportedly claims BT is trying to increase the amount of public funding it gets for delivering broadband to poorly served parts of the UK.

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BT is reportedly trying to increase the amount of public funding it gets for deploying super-fast broadband in poorly-served parts of the UK, while also attempting to get off having to match public funds with its own cash.

BT
A leaked document suggests BT is trying to increase the amount of public funding it gets for delivering broadband to poorly served parts of the UK. Image: BT

Broadband journalist Ian Grant wrote on his Br0kenTeleph0n3 blog on Sunday that he had seen an internal discussion document on the matter from Broadband Delivery UK (BDUK), the government agency that is in charge of handing out broadband funding.

The money BDUK UK will dole out — mostly to BT, as rival Fujitsu is reportedly being sidelined due to past failures — qualifies as state aid. To get state aid, BT should be upfront about its actual costs. The document Grant saw apparently suggested that BT was instead trying to establish a wholesale model instead.

The article claimed that BT was adding overheads and "new job types" to its actual costs, and also proposing that it get state aid to cover "availability payments" and bonuses for hooking up customers.

If the document were accurate, BT would effectively be trying to double the amount of public funding it receives for the 'final third' rollout (based on 20 percent uptake in those areas) and avoid having to match those payments itself.

The document appears to suggest that BDUK is preparing to push back against the proposals, as wholesale price is not used when calculating state aid.

ZDNet has asked both BT and the Department for Culture, Media and Sport (DCMS) for comment on the piece, and will add it as and when it arrives.

UPDATE (9pm): We have received comments from both BT and the DCMS.

A BT spokesman said it was "ludicrous to suggest that [BT is] trying to pass on the full cost of deployment to [its] public sector partners", particularly in the light of BT's parallel commercial investment of £2.5bn for providing next-generation access to two-thirds of the UK.

"BT is winning competitive BDUK tenders precisely because it is committing extra funds to improve broadband access," the spokesman said.

ZDNet UK has asked whether BT is trying to pass more of the costs on to the public sector than originally proposed, as opposed to trying to pass all the costs on, but has not yet received a reply.

The DCMS, meanwhile, declined to "comment on allegedly leaked documents", but did say it was "committed to achieving value for money for all government spending".

Topics: Broadband, Fiber, Government UK, Networking, BT

David Meyer

About David Meyer

David Meyer is a freelance technology journalist. He fell into journalism when he realised his musical career wouldn't pay the bills. David's main focus is on communications, as well as internet technologies, regulation and mobile devices.

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3 comments
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  • And they've put the price up

    Can't wait to get out of my BT contract.
    Pastabake
  • UK broadband -- epic fail

    As always, BT is expanding their network in the most profitable densely-populated areas where services were already good and consumers had choice, while the industry ignores in rural Britain.

    The UK government and Ofcom stand idly by and watch, as we fall further behind almost every other nation on the planet.

    This will be David Cameron's legacy -- the decade in which Britain was left behind in the new digital economy.
    Tim Acheson
  • Britain's rural broadband -- a national disgrace

    Britain's rural broadband -- a national disgrace

    Blogged -- the lamentable state of Britain's digital economy infrastructure and the general lack of concern by the government:
    http://www.timacheson.com/Blog/2011/feb/uk_internet_infrastructure
    Tim Acheson