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Britain quizzes EU over delay to £530m rural broadband push

Culture secretary Maria Miller is meeting with regulators to find out why the UK's £530m scheme to deliver super-fast broadband to the 'final third' still hasn't received state aid approval from the European Commission.
Written by David Meyer, Contributor

Culture secretary Maria Miller will meet with officials from the EU Competition Commission on Thursday, to find out why approval for the UK's publicly-funded rural broadband push has not yet been given.

A month ago, reports emerged suggesting clearance was due at the end of October or start of November, but nothing has materialised since. Miller is meeting with competition commissioner Joaquin Almunia at midday CET to discuss the hold-up.

EU regulators have to give clearance to the Broadband Delivery UK (BDUK) scheme because it involves vast amounts of public funding. With most if not all of the £530m likely to go to telecoms incumbent BT, state aid rules mean the Commission has to check this does not distort the market.

"We had originally expected clearance around March/April, so the whole process has taken a lot longer than anticipated," a spokesperson for Miller's Department for Culture, Media and Sport (DCMS) told ZDNet on Thursday.

"We appreciate there are a lot of factors to consider when reaching a decision, and support a strong and robust state aid programme — but it needs streamlining to ensure that these types of lengthy delays can be avoided in future."

"In addition to meeting with the commissioner today to discuss the rural broadband issue, the secretary of state is also going to raise the question of what can be done to speed up the process, so that future projects aren't affected by the same obstacles."

BDUK is intended to get super-fast broadband rolled out in parts of the UK that the private sector sees as too unprofitable for investment. This mainly means rural areas, although some towns and cities also fall into this 'final third'.

BT and Fujitsu are the only companies left in the running for the BDUK cash, but Fujitsu appears to have been blacklisted by the government due to past failures in major public IT projects. This leaves BT as the most likely recipient of the £530m, although the telco will top this up with some of its own money as well.

In September, a leaked document suggested BT was adopting a costing model for its BDUK activities that is not in line with state aid rules. BT denied it was inflating its costs.

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