BT Seals Norfolk Broadband Deal But Gets £95m Ofcom Fine

BT is set for a bittersweet Christmas, as it has signed off on a deal to cover Norfolk countryside in fibre broadband – while Ofcom has confirmed it still wants the telecoms giant to cough up £95 million for allegedly overcharging other providers for infrastructure.

Back in September, Norfolk County Council said it wanted BT to build up fibre broadband in rural areas, having acquired £15 million of the government’s Broadband Development UK (BDUK) scheme. But the project was put on hold thanks to the European Commission’s investigation of BDUK over state aid and competition issues.

Norfolk broadband contract

After approval was given in November, BT was able to sign off on the contract, announcing today the first services should be online by the end of 2013. It will be plugging £11 million of its own money into the initiative, adding to the £15 million from central government and the council’s own investment of £15 million.

When the rollout is completed, over 80 per cent of Norfolk’s homes and businesses are expected to be able to access superfast broadband of speeds of up to 24Mbps.

“Rural Broadband has the potential to unlock a revival of Norfolk’s local rural economy, creating vibrant villages and thriving towns by making it possible to start and run a connected business from rural locations,” said George Freeman, MP for Mid Norfolk.

BT might want to look at how much it charges other providers to run over that infrastructure, however. Ofcom confirmed today BT was to pay up almost £95 million to TalkTalk, Virgin Media, Verizon UK and Cable & Wireless for allegedly overcharging for its Openreach Ethernet services.

The telecoms giant said it was considering an appeal. “We are disappointed with Ofcom’s determinations and refute the finding that we have overcharged for Ethernet services,” a spokesperson said.

“We have provided evidence to Ofcom that shows we complied with our regulatory obligations and that we kept them informed of our pricing decisions throughout the period being disputed. The market for Ethernet services has grown strongly over the period and there is no evidence of economic harm to support Ofcom’s findings.”

A Virgin spokesperson said the company was “hopeful this brings to an end what has already been two years of legal dispute”.

BT has been repeatedly criticised by its rivals for charging too much for what is known as Physical Infrastructure Access (PIA). Last year, a host of ISPs, including Virgin and TalkTalk, wrote to communications minister Ed Vaizey, asking him to force BT to reduce PIA prices.

Now that BDUK is properly underway and BT has won all of the contracts so far, it is likely more pressure will be placed on those prices.

But BT won’t be forced into anything without a fight. In March this year, it said it was considering launching an appeal after Ofcom officially cut the wholesale line rental charges for BT Openreach again.

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