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BT’s T&Cs put broadband providers off £830m rural pilot bids

Ian Grant

The government's plans to attract competitive bids for four rural broadband pilot projects may be disrupted because non-BT network operators say they lack clear insight into the prices, terms and conditions that BT will levy for access to its poles and ducts.

In addition, bidders will be specifically excluded from key sources of revenue that could strengthen their business case for rural networks. These include using BT poles and ducts to provide leased lines to businesses, backhaul for mobile masts, fixed wireless antennas, and exchange connections.

Unless these issues can be sorted out quickly it could upset the distribution of £830m earmarked to extend high-speed broadband access to rural areas, or alternatively give an advantage to BT, say rivals.

Geo chief executive Chris Smedley described access to these sources of revenue as "crucial" to network operators that serve rural areas. Not being able to do so "rips out from your business case most of the things you would need to support the investment you are making," he said.

Smedley was speaking to Computer Weekly at the NextGen10 conference in Birmingham, which aims to examine progress for delivering high-speed broadband to communities that presently cannot get a decent service.

Ofcom is consulting on the terms and conditions under which BT would give access to its poles and ducts. BT is expected to produce a reference agreement for access or consumer networks in January, but a decision on their use for the key backhaul market would only be known towards the end of next year.

This effectively means that bidders for the four BDUK pilot projects would be asked to bid without knowing all the costs they might incur.

Smedley said that, as the proposals stood, they allowed communications providers to build "island networks" that required BT or Virgin Media to connect them to the rest of the country.

"For us it's poorly thought through, even for the access elements (consumer connections)," Smedley said.

He said communications providers had been through the same sequence of events and arguments with local loop unbundling, which took three years to resolve, effectively giving BT a three-year head start in installing digital subscriber link modules in its exchanges.

But within 18 months of local loop unbundling taking place, the UK had achieved a vibrant local access market, and BT's broadband market share had dropped to 30%.

Smedley said Ofcom's proposal to allow "virtual unbundling" of BT's fibres didn't really make sense to him. "Either you take a Layer 2 product from BT, which allows it to wholesale what it has already invested in for its own purposes, or you just allow people direct access to the infrastructure," he said.

Smedley said Geo remained interested in the four pilot projects. Geo's success with Fibrespeed, the North Wales open access network owned by the Welsh regional government, and similar projects elsewhere, notably in New Zealand, showed there were viable alternatives to the present effective duopoly.

He called on government to address this "policy gap" that threatened to make a mockery of the BDUK tenders. He said these issues were at the heart of why Geo and others pulled out of the £132m Cornwall broadband project, leaving it with only BT's bid.


Sceptics doubt December date for broadband strategy

In other news from the conference, several delegates questioned communications minister Ed Vaizey's video statement that the government would issue its broadband strategy in early December.

This was before it had even awarded tenders for the BDUK pilot projects, which are expected to produce insights into how broadband could be rolled out sustainably in rural areas in about a year's time.

There also appeared to be growing support among delegates for BT and Openreach, BT's regulated subsidiary, to be separated to ensure that BT's retail businesses do not unfairly benefit from the close relationship.

There was also support for the Valuation Office Agency to use the same method to assess all network operators' business rates. The agency assesses BT in terms of profit and losses, Virgin Media on homes passed by its network, and all others on kilometres of lit fibre.


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