The Financial Times has had an admission from the Department for Culture, Media and Sport that the lengthy negotiations with the EU have led to a three month delay to BDUK projects. EU State Aid approval is never a simple task and the original hope had been that the BDUK could arrive at a blanket approval for all the individual projects, whereas the EU appears to want to look at each individually. Given that different levels of public and private funding are involved in each local authority project this is no real surprise.
We looked at East Sussex back in July, where the council leader was complaining of delays, when the project timeline suggested that the time for approval had been anticipated.
The bigger risk is that one or more projects are rejected under the State Aid rules and councils have to go back to the drawing board. With the limited interest from commercial operators, even though there is subsidy money to help with the projects, a rejected area could be looking at a long delay before any connections can be delivered.
The real question now, is whether a 3 month delay will lead to the May 2015 deadline for 90% of households and businesses having the option of a superfast connection slipping. If Openreach (BT) wins the majority of the contracts then hitting the target in a compressed timeframe is entirely feasible, but with Fujitsu yet to win a contract, tighter deadlines actually make Openreach more likely to win. In effect any delays by the EU over concerns that BT may win most of the work, is very likely to make that concern an even more certain reality. Why? Because Openreach is delivering now, whereas Fujitsu has a lot of unknowns involved, with very little public information on its plans.
For all of the debate around the recent House of Lords Report and excitement that it backs an open access fibre hub solution, the cold reality is that even if the UK Government changed its direction, the time to delivery of the hubs would be in the order of five years, and even once they are delivered the commercial operators or community providers would then need to hook people up to the fibre hubs, via fibre, wireless, coax, copper, or microwave.
Love or hate the BDUK projects, they are the solution we have. What will be delivered will not be perfect but if it means 100% of the UK will be able to watch a single standard definition IPTV stream, and 90% can watch a couple of HD IPTV streams at the same time, it will meet the majority of what people want.