Following the broadband money

Altnets to fight BT monopoly of BDUK broadband cash

with 12 comments

BT may not have it all its own way rolling out next generation broadband to UK consumers.

A group of competitor network suppliers met on Friday 20 July to discuss ways forward in the wake of the disastrous BDUK procurement process that saw only BT and Fujitsu left as possible bidders for up to £830m of taxpayers’ money.

The meeting attracted BeyonDSL, Cable & Wireless Worldwide, Calix, CityFibre Holdings, Entanet, Gigaclear, UK Broadband, Virgin Media and others who prefer not to be named now, as well as representatives from Birmingham City Council, and the Communications Managers Association (CMA). It was organised by Independent Networks Co-operative Association (INCA), an activist lobby group for next generation broadband.

The so-called altnets plan to cooperate to present bids that compete with BT for BDUK money, which is being distributed via county councils’s broadband projects.

Some county councils are known to be angry and frustrated both at the delay caused by the BDUK process as well as the fact that it did not result in a genuinely competitive market. The BDUK procurement framework has still not been accepted by the European Commission’s competition authorities, putting any money disbursed at risk.

“Our analysis indicates that a large proportion of the BDUK funding set aside for state support of broadband roll-out will go to BT, but capacity limitations both in contracting and deployment will make the 2015 target difficult to reach,” INCA said in a statement.

Most of the attendees had been members of consortia that were invited to bid for BDUK money, but which fell away because of the absurdly high qualification criteria. They are now considering several business models that may provide an acceptable risk profile that will allow the lead company to attract funding.

They are also looking at how councils could structure their requests for proposals in such a way that giving everything to BT is not their only option.

A source close to the movement said the government had little chance of meeting its 2015 target of “the best broadband network in Europe” if it had to rely solely on BT. This was because BT didn’t have the manpower to do it by itself.

If the altnets can agree, councils will have “additional horsepower” to aid network builds as well as a more competitive environment that should give them “the biggest bang possible for their taxpayer’s buck”, he said.

Initial proposals will be discussed openly at the INCA seminar on state aid for broadband networks in London tomorrow. Two European Commission experts on state aid will show delegates how to liberate EU cash. Booking has been heavy, but there may be some spare seats. Anyone wishing to go should call INCA CEO Malcolm Corbett on 07770 896 534.


Written by Br0kenTeleph0n3

2012/07/23 at 19:33

12 Responses

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  1. Agree with most of this post, but I don’t agree that BT hasn’t the manpower, it has some great engineers. Unfortunately they spend most of their time mending clapped out copper instead of building the infrastructure we need to meet the EU targets. Just pick one at random and have a chat to them…

    The best way to shape up the incumbent is to get the altnets the support they need to get cracking, and then we’ll have some decent competition. Start with the rurals, don’t replicate the footprints or cherrypick, lets get fibre to the farms, masts and the rural SMEs who are the lifeblood of this country. The new NGA altnets will then start to take customers from the urban fringes because the fibre will be so superior to the old phone broadband. Let BT and Virgin fight it out in the cities, Virgin will soon deploy more fibre. BT can suit themselves, if they keep on paying the boss £5million and the shareholders instead of investing in their business its on their own heads if they keep on with the cabinet bottlenecks.

    Market forces, that’s the answer. But currently it is very hard for altnets to get a start. Support them, they are the future. Good luck to everyone tomorrow, lets get digitalbritain cracking. JFDI FTTH.


    2012/07/23 at 20:29

    • Fair enough. But it does make you wonder why Neelie Kroes is happy to let the incumbents keep their copper prices way up there. I am still struck by Sean Williams’ evidence to the House of Lords that fibre is five times more expensive than copper – presumably in capex, for that appeared to be the context – nothing about relative running costs or the >5 times increase in capacity that fibre gives or payback period, the last being more relevant to investors, no matter what the cost.

      Ian Grant

      2012/07/23 at 21:10

    • All the companies listed above will have shareholders, so that’s a red herring.

      Is the issue the cost of digging in areas with roads and pavements and getting into the actual property using labour at standard market prices?


      2012/07/23 at 22:07

      • Most smaller ISP projects tend to focus on rural areas and usually don’t have too much trouble reaching individual homes, often by thinking outside of the box (i.e. community digging etc.). One of the main problems is thus that an individual firm would need to have an annual turnover of £20m to benefit from public funding. Gaining affordable access to BT’s Dark Fibre and the ability to sell to businesses have been other blocks.

      • The Lancashire tender stipulated that a company had to have £100 million. So that’s altnets out of the picture then?


        2012/07/24 at 09:27

      • What BT Dark Fibre? Bill Murphy is on record saying BT would sell dark fibre over his dead body, and he seems very much alive. Affordable access to BT’s passive infrastructure and the restrictions on who third parties can approach – yes – that is a big problem, and one to lay at Ofcom’s door.

        Ian Grant

        2012/07/24 at 09:59

      • Chris – elsewhere you say it is too late for smart grids, please explain.


        2012/07/24 at 17:21

  2. BT will do anything to protect the golden goose that is the phone network. We are building a fibre network, it would cost us far more to build a copper one so I don’t know why they say fibre is more expensive. Sean is bound to say stuff like that, but hopefully the Lords see through it. Its time to move forward away from legacy infrastructure. Get a level playing field and get digging, the old goose isn’t gonna lay us any more golden eggs. Because it was there it gave a lot of people a ‘cheap’ start, but its days are numbered and an alternative goose has to be hatched.


    2012/07/23 at 21:23

  3. re smart meters v smart grids
    smart metres are not the way forward, it will cost billions, whereas a smart grid would save us billions. Smart metres snoop, smart grids work for their pay and they payback.


    2012/07/25 at 11:32

    • Smart grids for power supply have smart meters as part of the solution.

      The concept of Smart Grids was developed in 2006 by the European Technology Platform for Smart Grids, and concerns an electricity network that can intelligently integrate the actions of all users connected to it – generators, consumers and those that do both – in order to efficiently deliver sustainable, economic and secure electricity supplies.

      I don’t understand why you say it is too late when there are organisations working on them now. Please clarify what you think a smart grid is.


      2012/07/25 at 11:59

  4. […] bidders who have so far been frozen out of the BDUK broadband procurement framework are discussing how to cooperate to mount a challenge to BT for county council broadband […]

  5. The UK Government should be leading this far better. The only Country that is not on course for greater than 90 percent superfast fibre broadband is England if taken on population and access. Then what does access actually mean? BDUK appear far too content considering the challenge and accepting of Towns such as Tavistock receiving any support.

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