BT under fire over rural broadband rollout

MPs say the telecommunications giant's 'effective monopoly' over broadband in rural areas is hurting consumers.

by Elizabeth Anderson
Last Updated: 29 Aug 2014

The Government has awarded all of the 44 contracts from the £1.2bn rural broadband scheme to BT, giving the telecoms giant an ‘effective monopoly,’ a group of influential MPs has said.

The Public Accounts Committee (PAC), the government’s spending watchdog, said the way the project had been set up ‘failed to deliver meaningful competition’.

PAC chair Margaret Hodge said: ‘Since our hearing in July last year, when 26 of the 44 contracts to deliver this were with BT, all remaining contracts have now also gone to BT.

‘Despite our warnings last September, the Department for Culture, Media and Sport (DCMS) has allowed poor cost transparency and the lack of detailed broadband rollout plans to create conditions whereby alternative suppliers may be crowded out.’

The scheme was designed to provide those in the countryside with fast data speeds in areas not considered commercially viable (note to Margaret Hodge: the lack of commercial viability may have something to do with the lukewarm response from other providers). But PAC said the contracts awarded by DCMS gave BT a stronger position whilst placing less emphasis on value for money, despite warnings from the committee.

The report said that publicly-available details about BT's rollout plan remained vague which made it harder for alternative suppliers to fill gaps or offer higher download speeds.

‘It is still not good enough that, despite £1.2 billion of public money being spent, it is taking so long to get this information out there. Any lack of clear and easily accessible public information will only make it harder for other potential suppliers to prepare bids for the next round of funding,’ the committee concluded.

BT said PAC’s criticism is ‘inaccurate and unjustified.’

‘BT was the only company willing to accept the challenging terms on offer and make a significant investment in rural areas. This was at a time when others walked away when they realised easy pickings weren’t to be had....Our solution was also cheaper and better than the bids submitted by our competitors – before they walked away - and those terms still apply,’ the firm said in a statement.

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