Government body slams rural broadband roll-out

26th Sep 2013 09:24

MPs have issued a damning report attacking the way in which rural broadband has so far been rolled out across the UK. The report, issued by the Commons Public Accounts Committee (PAC), accused the government of failing to ensure sufficient competition by awarding BT all of the 26 contracts issued to date. It read: "The Department for Culture, Media and Sport's design of the rural broadband programme has failed to deliver the intended competition for contracts, with the result that BT has strengthened its already strong position in the market."Local authorities are contributing over £230m more to the programme than the department assumed in its 2011 business case and BT over £200m less, yet BT will ultimately benefit from £1.2bn of public funding." The governement responded by saying the report was "simply wrong", and insisted it has "put in place a fair commercial process and encouraged different suppliers to bid". It continued: "We are disappointed that the PAC fails to recognise that thousands of rural premises who have never had a decent broadband supply are now getting one, something that is vital for farmers, rural businesses and all those who live outside major cities." BT was ultimately the only bidder for the contracts, were awarded on a county-by-county basis, after Fujitsu withdrew. A further 18 contracts are expected to be awarded to BT. The lack of bids is mainly due to lack of profit available to companies setting up broadband in underpopulated areas. As a result, the government offered a £230m subsidy, plus a further £250m in 2015, to act as an incentive. NR