Rural broadband 'monopoly' attacked by spending watchdog

£1.2bn plan to bring broadband to rural areas is not delivering enough competition, says goverment spending watchdog.
Written by Colin Barker, Contributor

The government has failed to deliver meaningful competition in the procurement of its £1.2bn rural broadband programme, according to a report from public sector spending watchdog the Public Accounts Committee. 

As a result, the government has left BT "effectively in a monopoly position" said said Margaret Hodge, the chair of the committee.

The rural broadband programme is designed to help get broadband to areas, mainly rural, where commercial broadband infrastructure providers currently have no plans to invest.

"The Department for Culture, Media and Sport has allowed poor cost transparency and the lack of detailed broadband roll-out plans to create conditions whereby alternative suppliers may be crowded out," Hodge warned.

Much of the criticism concerned the secrecy with which the whole broadband roll-out has been handled leaving the country at large in the situation where nobody seems to know exactly how much broadband coverage there is in any given area.

Local authorities are still contractually prevented from sharing information to see if they are securing the best terms "for the public money they spend", Hodge said. "Communities can still not access the detailed data they need to understand whether they will be covered by BT’s scheme in their area."

The committee outlined three recommendations:

  1. The department should work urgently with all local authorities to publish detailed mapping of their implementation plans, enabling searches down to full (seven-digit) postcode level. The information should include speed of service, as soon as that is available;
  2. The department should collect, analyse and publish costs data on deployment costs in the current programme, to inform its consideration of bids from suppliers under the next round of funding;
  3. Before the next round of funding is released, the department should work with local authorities to identify opportunities to promote competition and value for money; including considering alternative solutions, joint working and fair capital contributions from suppliers.

The committee believes that a pressing problems is that there is still not enough consistently good information published by local bodies about planned rural broadband coverage and the actual speeds of the connections. Many of the maps currently available do not give sufficiently detailed information about BT’s coverage to be of use to other potential suppliers seeking to plug the gaps, Hodge said.

Hodge also pointed out that her committee had challenged the department in January and that as a result, it issued guidance clarifying that it expects local bodies to publish detailed coverage plans. "If the department's guidance is followed this time, these should set out where and when superfast broadband will be rolled out," Hodge said.

BT said the criticism was inaccurate and unjustified, as it was the only company willing to accept the "challenging terms" on offer and make a significant investment in rural areas.

"BT is investing £2.5bn of our shareholders’ money to make fibre broadband available to around two-thirds of UK premises (19m premises) by the end of Spring 2014," the statement added. "This is one of the biggest and fastest fibre programmes in the world without central government support."

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