And then there was one

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.