BT slurps from first govt broadband cash pot in Lancs deal
Fights off absolutely no one
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The first round of the government's public broadband funding has been awarded to Lancashire County Council, after the local authority agreed to a £62.5m project with national telco BT.
It's early days in the bid for BDUK investment, but BT is the only one to have secured such a contract. Many other ISPs have pulled out of bidding for the cash altogether, with only Fujitsu understood to remain in the running for any funds at all. Fujitsu also withdrew from the race for BDUK funds in Wales earlier this year, leaving BT as the sole bidder.
The BDUK pot had stood at £530m, but was topped up by the Chancellor in his Budget statement late last month to £680m to help speed up broadband connections in 20 cities throughout the UK.
The government also hopes to add a further £300m to that cash pile that it plans to take directly from the BBC's TV licence, but that won't happen until the next Parliament in 2015.
BT estimated that the total amount of money that will be invested into broadband rollout for Lancashire County Council would be around the £130m mark.
At present, Ofcom figures suggest that around 15 per cent of homes and businesses in Lancashire receive downstream speeds of less than 2Mbit/s.
BT is flinging £30m at the rollout project, while the local authority will get £10.8m from the BDUK funds.
A further yet-to-be-confirmed £16.5m is expected to be allocated from the European Regional Development Fund and £5.2m will be divvied up from local councils in the area – Lancashire County Council has to cough up £4.7m of that.
The council didn't go through the BDUK national framework to bag the funds, so it is instead required to seek its own state aid approval.
Additionally, the council created a £500,000 community fund to help pipe superfast broadband to more remote homes and businesses in the area. A pilot will kickoff in the east of Lancashire, BT said.
Unsurprisingly, most of the fibre will be fed to the cabinet (FTTC) rather than to the premises (FTTP).
"Fibre to the cabinet will be the prevalent technology deployed under the project. This will deliver download speeds of up to 80Mbps and upload speeds of up to 20Mbps. The average download speed in Lancashire is currently around 7Mbps," said BT.
Some parts of Lancashire will also eventually gain access to broadband speeds of up to 300Mbit/s, the national telco promised. ®
Updated to add
Regarding the Lancashire deal, a BT spokesman got in touch to say: "BT fought off several rival bidders to win these funds and so it was an open competitive process."
COMMENTS
Nah, the tender document was probably carefully drafted to ensure only BT ticked all the boxes.
Re: Remember Network Rail...
"The government should bring Openreach back into public ownership (they should never have privatised that bit) "
So that's another few billion pounds to be added to the national debt then - well, assuming you
Of course at the time of privatisation there was not separate "local loop" organisation and, in any case, the government raised as much in cash terms via the three tranches of share sales as BT's entire market capitalisation, so you might think the government did fairly well out of that deal when the accumulated inflation is taken into account.
It's also worth noting that, at the time of privatisation, competition was to be provided by the local cable franchises (who had cable TV delivery monopolies) and, to a considerable extent, that arrived with about 50% of households covered.
What an absolute joke our government and communications regulators are, what an absolute waste of space. BT the incumbent monopoly provider knows all it has to do is sit tight and refuse to invest anything and the government will simply cough-up, because what choice does it have?
Talk about holding the country to ransom. BT should have had its monopoly broken up years ago, but no, there its sits investing where it can guarantee a profit, and where its not worth it, wait for the government to stump up and make a profit anyway.
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