Cashback for the Government as superfast take-up increases
The clawback news in the BT financial results and a statement from DCMS over some the reinvestment of some £129m to extend the reach of superfast broadband might mean that a broadband levy might be put back on the shelf, especially if take-up of fibre based services continues over the next few years.
"The Government welcomes BT’s news today that the company will make up to £129m available to extend the Government led roll-out of superfast broadband.
The funding will be made available to local authorities to reinvest the money in providing further superfast broadband coverage to even more homes and businesses and much earlier than originally planned.
The money is being made available as a result of a clause in the contracts BT agreed with governments and local authorities that allows the funding BT has received to be returned or reinvested into further coverage if take-up is better than the 20 per cent* expected in BT’s original business case. The high take up rate to date has resulted in BT making a new business case assumption of reaching 30 per cent take-up in these areas."Part of DCMS statement
We don't think that the £129m will actually change hands in a nice attaché case, but we believe this means that gap funding already invoiced and paid to BT that now is payable back will be held onto by BT for re-investment in the continuing phase 1 and phase 2 projects. The amount will vary from project to project as each local authority area has an individual contract and one hopes that the local authority will have some input on where this will be invested, but as we have found some projects work closely with BT and others seem to have no input at all.
"BT will work with local bodies over the coming months to identify where these funds can be provided early to enable the local bodies to invest in increased fibre coverage sooner than would previously have been the case."Gavin Patterson, CEO of BT
It will be interesting to see how far further claw back sums will help to push the 95% superfast broadband coverage, the current funding in theory should see 95% coverage by the end of 2017. In areas like Northern Ireland already, onesie style cabinets are appearing in areas that were too far from their existing VDSL2 cabinet to benefit smaller clusters and in some parts of the UK FTTP is available to those who are on long VDSL2 lines and not getting superfast speeds. Another option might be to not increase the coverage footprint, but a project to opt for a higher proportion of native FTTP in its phase 2 roll-out.