Why BT’s argument for BDUK cash is a red herring
A recent exchange of emails got me thinking about BT basing its cost arguments for BDUK cash on a 20% take-up of FTTC, aka Infinity. There appears to be a logical flaw in its argument.
BDUK money is there to support the roll-out of FTTC in areas that are not “commercially viable” for BT. By definition, this means areas where BT is the monopoly/dominant supplier (aka Market 1 and 2 areas).
BT argues that it’s cost estimates are based on a 20% take-up. Since BT is the monopoly/dominant supplier, and even “competitive” LLU suppliers rent BT’s copper, take-up is guaranteed to be much higher than 20%, in fact (absenting fixed wireless operators) it will be 100% in Market 1 an 2 areas – at the Openreach and BT Wholesale levels.
Bottom line? BT’s 20% take-up argument is a red herring. It may hold true in Market 3 areas, but by definition that is not where BDUK may spend the money. Central and local governments should therefore reject BT’s 20% argument.