Welsh Assembly to be investigated over RIBS contract

EC to probe 'unlawful behaviour' claims

By Basheera Khan, Ping Wales • Get more from this author

Posted in Telecoms, 24th August 2006 08:02 GMT

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WBNet requested a judicial hearing into the matter, which took place in Cardiff on 21 July 2006. Goodall, who previously worked as a radio and radar engineer in the Royal Air Force, represented the company himself.

The hearing found that WAG had acted lawfully, and that WBNet should have made its complaint within three months of June 2005, when the Assembly put forward a proposed list of exchanges to be enabled under the RIBS project, even though the final decision to upgrade the contentious exchanges at Skenfrith, Cross Ash and Llantilio was only made in March 2006.

WBNet has since ceased trading. Goodall says: "We could not compete with a state-subsidised major telco. This outcome has gutted us. The irony of it all is that many users in Monmouthshire will not be getting anything like the level of service that our customers received."

It is anticipated that the remaining exchanges in Monmouthshire will be enabled by September 2006, making ADSL broadband available to most of Monmouthshire's residents.

The Wales Broadband Stakeholders Group comments: "RIBS was intended to assist the setting up of local and regional broadband projects, and whilst affirming the principle of technology neutrality, the scheme was essentially conceived to support wireless broadband projects as a last mile solution for remote and rural areas."

In 2001 telecoms consultancy and research house Analysys prepared the Ubiquitous Broadband Infrastructure for Wales [pdf, 5.5MB] report for the WDA, which led to the setting up of the Broadband Wales programme.

The Wales BSG adds: "In this report, wireless was seen as a significant means of addressing the digital divide, and the remote and rural areas telecoms agenda in Wales. It is therefore now a bitter irony that after such a lengthy delay, a wireless start-up in rural Monmouth should be adversely affected by BT's exchange enablement via the RIBS contract. Innovative broadband solutions such as those provided by WBNet were exactly the kind of initiative that RIBS was intended to enable."

Professor Dylan Jones-Evans, director of the National Entrepreneurship Observatory, comments: "From an entrepreneurial perspective, why should the state support [one company] to set up a particular service, as opposed to other companies? It's up to [each company] to take that risk."

Should the EC's competition directorate-general find that WAG has acted unlawfully under state aid rules, it could seek to have the aid recovered from the RIBS project, plus interest from the date of the first payment.

A DTI-authored guide to state aid cautions that the consequences for businesses, if funding bodies break the state aid rules, can be severe. If the EC requires it, member states are obliged to recover illegal aid, even if that means that recipient companies go bankrupt.

WAG declined to comment on the matter.

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