Following the broadband money

Welsh government explores ways to pay BT to overbuild £30m state-aided network

with 5 comments

FibreSpeed MapThe Welsh Assembly Goverment (WAG) is looking for ways to allow its state-aided BT-supplied £425m Superfast Cymru project overbuild the 14 North Wales business parks served by the FibreSpeed wholesale network. If a way is found, taxpayers will be paying twice to provide high speed broadband to the area.

FibreSpeed’s physical infrastructure is owned by the WAG, but supplied and operated under a 15 year contract by FibreSpeed, a Geo Networks subsidiary. The business parks and industrial estates on the FibreSpeed network were excluded from the Superfast Cymru plan because they overlapped.

In a letter to Assembly Members, economy, science and transport minister Edwina Hart said a change in the guidelines governing state aid for broadband may allow the overbuild.

“I have commissioned a technical and legal review to consider whether it is possible to provide support for Superfast Cymru in locations already served by FibreSpeed. I hope to provide an update on this shortly,” she wrote on 12 November.

The European Commission gave permission in February 2006 for the WAG to use state aid to commission FibreSpeed. At the time BT’s prices were 2.7 to 7.2 times more expensive than London for the same service (see Note below). This was more than local businesses could afford, the WAG said.

“The EU regulations on state aid for broadband which applied at that time were interpreted as meaning that Superfast Cymru could not be supported in addition to FibreSpeed in those areas directly covered by the State Aid notified FibreSpeed footprint,” Hart wrote.

The WAG earlier refused to allow FibreSpeed to increase its footprint, and refused to answers questions about why it allowed part of it to lay unlit. A Freedom of Information request revealed 126 businesses were using FibreSpeed in June 2011 .

She noted that a number of ISPs are using FibreSpeed links to backhaul wireless broadband connections to homes and businesses across north Wales.

“Many of these ISPs’ customers have benefited from the Broadband Support Scheme to cover the cost of their connection. The beneficiaries of the Broadband Support Scheme aid are the end users, not FibreSpeed nor the retail ISP, so there is not a State Aid issue for these telecoms organisations as a result of the scheme.”

However, Hart allowed ISPs to be paid directly after confusion over who should get the up to £1,000/home subsidy.

Note: The WAG used a BT quotation dated July 2005 for fibre-based services to a site in North Wales to support its claim that the costs were prohibitive.

Symmetrical connection Installation fee Annual rental
10 Mbits/s £7,000 £34,500
34 Mbit/s £25,000 £94,000
100 Mbits/s £25,000 £168,300

Source: European Commission 22 February 2006


Written by Br0kenTeleph0n3

2013/11/18 at 23:52

5 Responses

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  1. The monopoly incumbent is determined to squash any competition, there are no lengths it will not go to nor no stone left unturned. The EU and the British government are being made into fools. History will not forgive them. State aid is a farce, and BT legal teams run rings round everyone. By the time everyone realises what is going on (between 2017 and 2020) we will be so far behind it will mean nationalisation of our telecoms and a complete rebuild of the infrastructure. This comment will get the usual response I guess, but in a few years time it will still be here as evidence that some of us can actually see through the hype and are not afraid to be ridiculed. Most people once thought the earth was flat. Remember that.


    2013/11/19 at 18:09

  2. As it says above the Fibrespeed network would appear to be limited to links into business parks and industrial estates plus backhaul for wireless networks. Maybe some of those businesses want a connection from one of the >100 ISPs available via Openreach.

    I’m interested in exactly why you think the government will have to nationalise our telecomms in the future. The more than 100 telcos with Code Powers like VM and Gigaclear (including B4RN?) may not be too happy about it.

    Why should the infrastructure have to be rebuilt, which parts of it? If you are thinking of the local ends rather then the core network then currently fibre duct and fibre is going in across the UK to end up very close to properties as in cabinets or FTTP. Clearly if 100% FTTP is the end aim then it just needs funding from government and end user to be sorted out. I’ll say again ‘funding’.

    All agree?


    2013/11/19 at 20:46

  3. […] from broadband consultant Richard Brown who has already asked the European Parliament whether the WAG can use SuperFast Cymru money to overbuild the FibreSpeed coverage area which has already received state […]

  4. […] from broadband consultant Richard Brown who has already asked the European Parliament whether the WAG can use SuperFast Cymru money to overbuild the FibreSpeed coverage2 area which has already received state […]

  5. […] BrokenTelephone reported in November last year that the WAG was seeking ways to overbuild Fibrespeed. At the time business, science and transport minister Edwina Hart said a change in the guidelines governing state aid for broadband might allow the overbuild, and promised to report back to WAG members. […]

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