Br0kenTeleph0n3

Following the broadband money

And then there was one

with 13 comments

A Cabinet Office decision to rank “Fujitsu” as “high risk” has effectively reduced the number of companies eligible to bid for more than £1bn of BDUK-funded next generation access projects to one – BT.

Internal government documents seen by Br0kenTeleph0n3 suggest that the government will consider Fujitsu Telecom as “high risk” and that any bids from such companies will be “scrutinised particularly carefully” before being given more work. Local authorities responsible for rolling out new broadband as well as public service networks in their patches are likely to prefer the low risk option.

Yesterday news broke that BT had won NGA bids in Cumbria, Norfolk and Surrey. Twitter conversations suggested no-one is prepared to bet against BT making a clean sweep of BDUK contracts.

Although Fujitsu’s troubles are believed to be related to a failed project at the NHS, the blacklisting completes the humiliating BDUK framework procurement process for which it paid almost £3m to consultants at KPMG and Pinsent Mason.

After starting with nine invited candidates, BDUK ended up with just BT and Fujitsu signing up. In practical terms, only BT is left, despite Fujitsu claiming it’s business as usual.

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.

There is no indication yet how Fujitsu’s blacklisting might affect BDUK’s negotiations with Brussels. The sticking point, Sullivan said earlier, is wholesale access to the new networks. European Digital Agenda chief Neelie Kroes wants regulators to force incumbents to offer dark fibre to increase competitive access to physical infrastructure. BT has said it won’t offer dark fibre.

If DG Competition hangs tough because of BT’s imminent monopoly on BDUK’s money, BT may have to concede on dark fibre. Or BT might just tell the government it’ll stick to the two-thirds of the UK’s commercially viable communities.

That could destroy any chance of the government meeting its goal to have the best and fastest broadband network in Europe by 2015. But through Ofcom it could also make BT provide dark fibre and a standard interface such as Ofcom’s Active Line Access, and spend the BDUK money with network operators who are prepared to work in rural areas.

We live in interesting times.

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Written by Br0kenTeleph0n3

2012/09/14 at 11:39

13 Responses

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  1. Hope that some of this will be thrashed out at NextGen 12 on 8 October with Robert Madelin – Director General DG Connect, Simon Towler – Head of Spectrum, Broadband and international ICT policy at DCMS and David Stewart – Competition Policy Director Ofcom. Liv Garfield CEO Openreach will also present. You’ll be there – please ask poignant questions.

    Marit Hendriks

    2012/09/14 at 11:46

  2. think its surrey not sussex, i thought it was suffolk yesterday too as well as sussex, but no, its surrey. And there only ever was one company. The rest never stood a chance. Not a level playing field.

    chrisconder

    2012/09/14 at 12:09

  3. What is the ‘Sussex’ announcement, Ian? West have not even gone to public consultation let alone ITT and I thought East was the same? Has the East broken ranks?

    mike phillips

    2012/09/14 at 12:14

  4. No probs, Ian. Heart rate back to nprmal…..:-)))

    mike phillips

    2012/09/14 at 13:12

  5. Here is the Surrey announcement
    http://tinyurl.com/9lmyc3l

    David Cooper

    2012/09/14 at 14:09

  6. Ian,

    Benoit (Felton) has a perspective on this (see http://www.fiberevolution.com/2012/09/state-aid-by-any-other-name.html). From my perspective, I’m not surprised at the outcome and do wonder why the process was structured in this way. As I see it, OR would have been rolling out to all these Counties in due course – the only diffence here is that:
    a) expense
    b) a new level of local goverment has been created in terms of deciding where OR should deploy.

    Madness!

    John Nolan

    2012/09/14 at 16:05

    • A friend of mine is concerned how Local Authorities are going to handle a bidding war war with one participant. :-)))

      mike phillips

      2012/09/15 at 17:36

  7. […] a Cabinet Office assessment that Fujitsu is a “high risk” supplier, it is now unlikely that Fujitsu will win any of the 45-odd contracts at […]

  8. […] The phone company has made cost verification nearly impossible with strict, mandatory confidentiality agreements that prohibit local councils from learning BT’s true costs. BT’s non-disclosure agreement also prohibits local governments from comparing notes about what the company charges in nearby communities. The government has approved only two vendors for the government-funded broadband expansion — BT and Fujitsu, with BT winning the overwhelming majority of contracts. […]

  9. […] DG Connect. It noted that nine firms had expressed an interest in BDUK’s money, but “seven of them withdrew during the selection process due to e.g. financial difficulties, change in strategy or preference […]

  10. […] lines had any effect on the BDUK process. Yet this was the main reason why everyone except BT and Fujitsu dropped out of the BDUK framework bid. Geo CEO Chris Smedley was particularly forthright in his […]


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