Will BT swallow all the BDUK funding?
Tuesday 17 April 2012 14:32:43 by Andrew Ferguson

The devolution of decision making for the local authority run BDUK funded projects that are meant to provide the UK with the best broadband in Europe by May 2015 means that the Westminster based Government can only really answer procurement questions once the various local authorities have gone public with their choice.

This has not stopped Chi Onwurah the MP for Newcastle upon Tyne questioning Ed Vaizey over how many of the projects that are in the procurement phase will go to the BT Group. Ed Vaizey simply confirmed that BT was bidding for these projects and is expected to be in the running for the other projects that will hopefully enter the procurement phase sooner rather than later.

This ability to distance the central decision making machine is crucial, though given the constraints on the tendering process both by BDUK and the various EU rules in this area does mean that smaller operators will be unable to bid for the main tender. Where we hope they will be able to gain, is in winning sub-tenders to provide solutions that need a more custom approach than the behemoth that is the BT Group can provide.

The two real runners for BDUK projects appear to be Openreach, which with its existing commercial roll-out and the Superfast Cornwall project has lots of visibility for its solutions, and may win simply down to the 'better the devil you know' approach. Fujitsu with its original announcement got a lot of press coverage, but the real only visible progress has been a trial in the Wirral.

The issue of a Universal Service Obligation has been raised by Lib Dem MP Tim Farron, but has been dismissed by Ed Vaizey.

"Only three member states — Finland, Spain and Malta — have included broadband in their national USO,...

The UK's position is that the time is not right to introduce a broadband USO as it may constrain private investment in networks. The current non-regulatory approach to delivering universal broadband is considered the most effective means of stimulating commercial investment while minimising costs to the public purse."

Minister Ed Vaizey responding to question from Lib Dem MP Tim Farron

We don't think the UK has a non-regulatory approach, it is simple a light touch one, all too often serving the needs of the biggest operators in the most densely populated parts of the UK.

A common war-cry for those in those in the under served parts of the UK (remember poor broadband is not a pure rural issue) is that Openreach should be even more widely separated from the BT Group, or a new local loop operator created. The first option is possible, but with significant costs, and risks of delays as providers adapt to new operating procedures. The period when a totally new local loop could be created has been missed by some years, if this was to happen, it needed to happen before Virgin Media carried out its DOCSIS 3.0 upgrades in 2009, and Openreach started its own fibre roll-outs.

A little history on Fujitsu, is that the factory in Birmingham, was originally ran by BT in the days when it was at the forefront of fibre optic hardware production, but the Conservative decision to create cable franchises in the 1980's meant BT pulled out of this area, with Fujitsu buying the plant and moving its European headquarters to Birmingham.