Original URL: http://www.theregister.co.uk/2008/09/17/bt_wales_fibre/

BT lobbies Welsh Assembly for superfast broadband subsidies

Not Bryn Terfel

By Christopher Williams

Posted in Broadband, 17th September 2008 13:06 GMT

BT chairman Sir Michael Rake went to the Welsh Assembly on Monday, to glad-hand politicos and lobby for local government cash for deploying fibre in the pricipality.

He was unfailingly spinny about why BT had come to Cardiff, but made it clear that the telco's palm needs greasing if Wales' more rural corners are to enjoy 100Mbit/s internet access. The Western Mail reports he said:

We believe there's no need for central government money per se. However, what will be essential in terms of prioritising capability and investment, is for the various regional authorities to look at what they can do from a funding point of view to develop fibre early, particularly in areas where population factors may not make it as immediately capable of being done as in other locations.

So, BT doesn't want subsidies, except where it wants subsidies. Gotcha, Mike - the keyword there is "central government". Welsh ministers were told how they could be at the forefront of a new digital revolution by playing nice with BT.

BT has so far committed £1.5bn to fibre nationally, but has said it will be invested where there is the best economic case - i.e. in densely populated cities. It's using that relatively small first drip of cash (a full national point-to-point fibre network could cost up to £29.9bn) as a lever to apply pressure on regulators to give it more control over a new network than it currently enjoys.

That pressure is manifest as regular calls by BT for Ofcom to allow it to charge whatever it wants for wholesale and retail access to new fibre. Rake repeated the line in Wales: "What BT have said is that we believe [next generation access is] important and we're willing to make an initial investment of £1.5bn in fibre, which could serve up to 10 million people, subject to Ofcom giving us the right pricing mechanism, i.e. that there's not a cap on the price that makes it completely unacceptable from our shareholder point of view to take the risk of investment."

Meanwhile consumer groups are pressing Ofcom to ensure that poorly-served communities are included in a roll-out.

Central government has been advised not to subsidise a new internet infrastructure. The influential Caio report, published last Friday, did however suggest that local bodies could assist with costs...

And up tips Sir Michael Rake at the Welsh Assembly days later. Expect this kind of horse-trading to intensify over the next two years. ®