PAC: BT And Government Are Killing Broadband Competition

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DCMS advised to stop throwing money at BT until it comes up with a more competitive framework

BT and the Department of Culture, Media and Sport have come in for heavy criticism over claims they killed off competition in the project to spread superfast broadband across the UK.

A report from the Public Accounts Committee, released this morning, said BT was not being transparent enough about its activities surrounding the Broadband Development UK (BDUK)project, whereas DCMS had not handled procurement well enough to get value for money.

The PAC recommended the DCMS not spend any of the additional £250 million it pledged to spread broadband further after 2015, until a more competitive process had been created.

BT towerBroadband bollocking

DCMS drew up a framework that would take quality broadband to 90 percent of the nation, with money coming from vendors, local authorities, the department itself and European bodies. But only one vendor, BT, will now win every BDUK-based contract, whilst the project is running 22 months late.

BT and DCMS had already been slammed during evidence gathering, when Malcolm Corbett, CEO of the Independent Networks Co-operative Association, said BT had acted like a “vampire death squid”.

“There is scant evidence of any satisfactory competition to enable prices to be driven down taking place,” the PAC’s report read.

“The lack of transparency over BT’s costs is a serious risk to value for money, particularly as BT is the department’s single supplier.

“BT is preventing local authorities from providing proper information on the areas it will and will not cover with superfast broadband.

“Details about speed and coverage are treated as commercially confidential in each local project. This has prevented other suppliers from developing proposals for schemes aimed at reaching the remaining 10 percent of premises that will be without superfast broadband.

Even though Ofcom has imposed limits on what BT can charge others for wholesale access, “the conditions attached have deterred any other providers from exploiting this access”, the PAC said.

BT said it was “disturbed” by the report, saying it was “simply wrong”. It failed to “take on board a point-by-point correction we sent to the committee several weeks ago”.

The telecoms giant argued its wholesale conditions were entirely fair. “The network we’re building is open to all our rivals, who are able to sell services to consumers, paying us the same prices we charge our own Retail division,” a spokesperson told TechWeekEurope.

Onlookers remain concerned about where taxpayers’ money is going. “Taxpayers should be deeply concerned that the broadband programme in its current form has seen hundreds of millions of pounds of their money wasted as a result of a centralised, one-size-fits-all scheme for fixed-line only internet connections,” said Dominique Lazanski, head of digital policy at the TaxPayers’ Alliance.

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