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Brussels blesses British BDUK broadband boost blurt

£530m cash prizes cleared for largely one-horse races

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Maria Miller's mercy dash to Brussels earlier this month appears to have paid off, after the European Commission confirmed today that it had cleared £530m in state aid investment for broadband deployment in the UK - along with what appear to be limp-wristed concessions.

"BDUK [Broadband Delivery UK], as a national competence centre, will assist local granting authorities in designing and implementing successful broadband support measures in line with EU competition rules," said competition commissioner Joaquin Almunia.

"The umbrella scheme will be a big step towards the achievement of the EU Digital Agenda targets and a strong impetus for growth in the UK."

It would appear that some horse-trading was required by Miller to get state aid approval from Brussels, however.

Among other things, the Department for Culture, Media and Sport will be required to submit an evaluation of the project to Brussels' competition officials before 31 March 2015 to "ensure that any forthcoming scheme will take this evaluation into account".

The commission added in a statement that the BDUK plan - the value of is estimated at £1.5bn - contained a number of "best practices" that would lead to "more effective, better targeted and less distortive public interventions". By way of example, the EC said that a "national competence centre" would advise smaller local authorities on how to proceed with applying for the broadband cash.

It said that it was satisfied with what is effectively Whitehall's transparency spin by saying:

All information related to projects under the scheme (including mapping, public consultation, tenders, aid beneficiaries) will be published on a central website.

The Commission encourages nationwide broadband support schemes to ensure consistency between small projects and to avoid delays in the implementation through reduced administrative burden for local authorities.

As for competition, very little was explicitly said by the commission in its statement clearing state aid for Blighty's "final third" broadband project - which counts BT as the only "preferred bidder" to have bagged any of the BDUK money to date. Fujitsu is also on the books but has yet to win any government money.

Instead, the commission appeared to place its faith in Britain's comms watchdog Ofcom, by stating:

Moreover, the UK telecommunications regulator will have a crucial role in designing wholesale access prices and conditions.

Miller's department said it was delighted with the decision, after what has been a lengthy regulatory delay for the government's £530m rural broadband scheme.

The cabinet minister said:

Finally getting the green light from Brussels will mean a huge boost for the British economy. Superfast broadband is essential to creating growth, jobs and prosperity and the delay has caused frustration within government. Today’s announcement means that we can crack on with delivering broadband plans, boosting growth and jobs around the country.

She added that the "government will not allow parts of our country to miss out on the digital age*," even though the present plans are expected to only reach around 90 per cent of homes and businesses with broadband speeds of 2Mbit/s by the end of the current Parliament in 2015.

The DCMS said that projects in Wales and Surrey would be the first to benefit from state aid clearance, followed by Cumbria, Rutland and Herefordshire and Gloucestershire. It added that Cambridgeshire, Oxfordshire and Highlands & Islands were still deep in procurement mode.

Meanwhile, North Yorkshire’s project - which had already received state aid approval - began to be implemented in July. The only other project to have completed procurement is Lancashire’s, but that is in fact awaiting a separate decision from the EC on state aid.

The DCMS said that Norfolk, Suffolk, Wiltshire, Devon & Somerset, Northamptonshire, Kent & Medway, Lincolnshire and Hampshire were all undertaking BDUK procurements.

"The first four of these launched their invitations to tender at the beginning of July and are now nearing the point of agreeing a contract with their supplier," it said. And Shropshire is expected to launch its procurement process next week. Any remaining rural broadband projects are expected to complete their procurements by summer 2013, the DCMS said. ®

* It's estimated that some 7.5 million British taxpayers are not online - either because they prefer to do face-to-face business and social interactions, or else are too poor to be able to afford a broadband connection, let alone pay out for a computer or fondleslab.

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