Following the broadband money

BT goes all-in to win £1bn stake

with 6 comments

Ministers are examining a proposal from BT to include procurements under the £150m Superconnected Cities programme in the BDUK’s £530m rural broadband procurement framework.

BT claims this will reduce procurement costs of the programme, which aims to boost download speeds in up to 20 cities to 80Mbps to 100Mbps. It could cut procurement costs further if public service networks are included.

Speaking at today’s Westminster e-Forum conference on broadband funding, BDUK CEO Robert Sullivan confirmed ministers are looking at the cost, speed of roll-out and competition implications of the proposal.

“The general principle is that they will give cities choice around these things unless they think there’s a compelling reason against that,” he says.

BT and Fujitsu Telecom are the only firms from an initial nine to qualify as network suppliers under the BDUK framework.

If ministers agree to BT’s proposal, they will hand it a winning hand in competing for over £1bn in taxpayers’ money from state aid subsidies to expand coverage and speed of broadband networks.

Sullivan says the government is confident that the state aid elements of the BDUK framework will receive European Commission approval during autumn. Brussels’ DG Competition has been worried about conditions that govern wholesale access to networks supplied under the framework, he says.

However, cities like Manchester and Birmingham indicate that their applications for state aid went through quickly because they want their metro networks to offer dark fibre. Up to now BT has not offered a dark fibre product, nor has it been willing to sell services using other carriers’ infrastructure.

BT is prepared to resell wavelengths on its fibre using a product called VULA (virtual unbundled local access), but TalkTalk’s Andrew Heaney says pricing of this product is presently unregulated. He says Ofcom needs to cap the profitability of VULA before ISPs take a serious interest.


A Fujitsu spokesman says it’s business as usual with respect to the BDUK framework. Fujitsu Telecom remains, with BT, the only two approved suppliers of next generation broadband to the 40-oddcouncils that are working through the framework.


6 Responses

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  1. 1) Did anyone ask whether the supposed ban on Fujitsu receiving new Government business
    applies to the BDUK framework ?

    I should add that this is a strange decision since it appears to be a consequence of NPfIT where Fujitsu and the other unnamed supplier were left picking up the pieces after a supplier, who had ocntracted far more and has not been banned, walked away with a penalty of undr £100 million.

    2) Did anyone ask whether it is correct that Councils have to choose between putting their available funds into PSN compliant networks and the BDUK framework?

    I have been told that they cannot use both funding sources for a shared network.


    2012/09/11 at 21:32

    • I wasn’t aware of the alleged ban on Fujitsu at the time of the meeting. I have since asked the company for comment and shall update as and when I have its reply.
      Rob Sullivan told me he was not allowed to give me a fuller interview, so there was no opportunity to explore the PSN angle. AFAIK, the money is earmarked for these specific programmes (next generation rural broadband and high speed urban broadband).
      I suspect is going to be extremely difficult to audit precisely where the money is spent. It would help if local authorities insisted that BT provide suppliers’ invoices to support its claims for payment.
      BTW, you may have seen that the government has settled its claims against CSC for £68m plus an unknown sum to get out of the exclusivity clause. The original contract with CSC for the NHS’s electronic patient record system was worth £2.9bn. More details are here –

      Ian Grant

      2012/09/11 at 21:58

  2. BT should get none of this money whatsoever. Parliament would be just cementing BT’s monopoly of retail access to fibre. We absolutely need dark fibre that is open to all comers to rent so that new and existing entrants can properly compete with BT in the provision of rural and non metropolitan Broadband services.

    If this government permits this it will once again prove that they have no regard for the needs of their constituents!!!!


    Chris Newby-Robson

    2012/09/12 at 07:22

    • My impression is that the altnets have pretty much given it up and are happy to live in the shadow of BT’s price umbrella. We’re going to see the LLU saga repeated with VULA over the next 10 years. Fortunately, I’ll be able to reuse all my stories from then and simply swop acronyms. Productivity boost! ;-(

      Ian Grant

      2012/09/12 at 09:24

  3. […] Ian Grant’s Br0kenTeleph0n3 blog noted that Sullivan was also considering a BT proposal for the £150m Urban Broadband Fund […]

  4. […] That’s not all. The European Commission’s DG Competition has still not approved BDUK’s procurement framework as a vehicle for distributing state aid. BDUK CEO Robert Sullivan told a Westminster e-Forum conference this week that he was confident approval would come in autumn. […]

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