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BT wins contract for rural broadband

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Some of the UK's most remote areas should be able to tap in to broadband by next summer after BT was awarded a public sector contract to wire up 45 areas in the Midlands and the South West of England. The UK's dominant fixed line telco beat off competition from eight other suppliers including Cable & Wireless (C&W) and Claranet to win the contract.

Exactly how much of tax payers' money is being used to pay BT to upgrade its own exchanges for broadband has yet to be released, but at least four development agencies are known to have put their hands in their pocket to fund the project.

Those behind the deal claim it is "unique" because three English regions - East Midlands, West Midlands and the South West - joined together under a single organisation, West Midlands Networking Company (WMNC), to award the contract.

The areas - which include villages in Derbyshire, Staffordshire, Shropshire, Herefordshire, Worcestershire, Cornwall, Devon, Dorset, Gloucestershire, Somerset, Wiltshire and the Scilly Isles - are regarded as not commercially viable for broadband without some form of hand-out.

The project also needed the thumbs-up from the European Commission to ensure it met rules governing state aid. The Commission decided that the project could go ahead because the public money "was not likely to cause undue distortion of competition within the Single Market and was therefore compatible with EC Treaty state aid rules".

Competition Commissioner Neelie Kroes accepted that the "rural nature and geographical remoteness of the concerned areas make them an unattractive goal for investment by broadband service providers" and that the "aims at correcting this digital divide by awarding grants to service providers selected through public tenders".

A full list of exchanges covered by this project can be found at Thepowerofbroadband. ®

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