Commission clears BDUK broadband investment plan
Government should open up framework and rethink priorities, urges MLL Telecom
The European Commission has backed the UK's umbrella support scheme for investments in next generation access (NGA) broadband networks.
In a statement, the commission said it found that the scheme, Broadband Delivery UK (BDUK), is in line with EU state aid rules.The scheme is aimed at supporting local projects in rural and remote areas, where such networks are unlikely to be developed on commercial terms.
The BDUK scheme aims to provide as many UK homes and businesses as possible with access to superfast broadband infrastructure in the so-called "final third" areas. These areas are typically low-density, rural areas, where commercial operators are unlikely to invest in high quality broadband networks.
Commission vice president in charge of competition policy, Joaquín Almunia, said, "BDUK, as a national competence centre, will assist local granting authorities in designing and implementing successful broadband support measures in line with EU competition rules. The umbrella scheme will be a big step towards the achievement of the EU Digital Agenda targets and is a strong impetus for growth in the UK".
The commission said it 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.
Some companies contend that the EU's intervention over the use of state aid and the competition process has effectively stalled any physical work from getting underway in the UK on the super-fast broadband initiative. EU officials had raised questions over whether there has been genuine competition for the £800m BDUK pot of money that the government had set aside to achieve set targets for super-fast broadband throughout the whole of the UK by 2015.
David Pinnington, head of government & systems integrators at public sector networking specialist MLL Telecom said the important piece now is the time scale for delivery, the delays caused by EU intervention and how government can facilitate the rapid rollout of services to citizens.
"The 'Government Digital Strategy' paper published in November 2012 states the intention for 'Digital By Default' in how government services are delivered. Superfast broadband plays its part in this strategy and is important in making UK plc both commercially competitive and for enabling government to save money by delivering services through digital channels," he said.
Pinnington said that as there are only two companies that are eligible to carry out the work on super-fast broadband under the BDUK framework, BT and Fujitsu, the government should "consider opening up the framework to more companies that can help deliver connectivity quicker and to consider delivering contracts in smaller lots to encourage competition, especially to those areas that currently have the poorest coverage".
He suggested that regional councils should be encouraged to introduce their own competition to accelerate the process and not feel they have to strictly adhere to the BDUK commercial procurement framework.
However, he added, with operators laying fibre to the cabinet in the most economically advantageous areas first, instead of concentrating on areas that have the poorest coverage, the gap between those that have good broadband and those that have none is widening.
"The problem lies in the way the targets have been set in the first place. At the moment, operators are rolling out fibre optic technology in big cities first to provide super-fast internet connections. Instead though, the government should be encouraging operators to focus their efforts on the 15 percent that can't even get minimum speeds in order to really make a difference.
"By concentrating on these neglected areas first they would gain maximum benefit from the funding available early on in the project and use it to its best advantage - a much fairer system overall. The current delays should push the government and the regional councils to rethink their priorities and strategy," concluded Pinnington.
A spokesman for the Department for Culture, Media and Sport (DCMS) said, "BT and Fujitsu were appointed to the framework following an open competition. Any provider who believed they could deliver one or more project could have sought to be appointed to the framework. Nine providers began the process of entering onto the framework but, other than BT and Fujitsu, all but one of these withdrew".
He added that DCMS has encouraged local authorities to use the framework to help accelerate the procurement process and give greater levels of assurance regarding achieving value for money. Ten projects have undertaken their own procurements outside the framework, he said.
"Projects have a wide size range, covering from a few tens of thousands of premises up to near one million. So lot size has not been a barrier to competition. In addition, communities are able to take forward their own projects with funding available from the Rural Community Broadband Fund. Projects under this scheme can be at the level of individual or communities.
"The government has set a target that all premises should have standard broadband of at least 2 Mbps and that 90% of premises should have superfast broadband, with funding available to support this from the £530m rural broadband programme. The roll-out plans for individual project areas are agreed between the relevant local authorities and their providers".
A BT spokesman said, "We are pleased to hear the European Commission has approved the use of state funds for BDUK projects. This decision is very welcome as it will give an important boost to plans to bring fibre broadband to rural parts of the UK. We can now commence work in areas where we have contracts in place and it should also make it easier for those counties who are yet to sign deals with the private sector. It is now full speed ahead".
Raj Sivalingam, associate director for telecomms and spectrum at Intellect also described the EU decision as "good news. The impasse seems to have been broken. It is important that broadband reaches its full potential terms of driving UK GDP productivity".