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Rural Britain gets raw deal from lack of fast internet

By Western Morning News  |  Posted: September 26, 2013

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Homes and businesses in rural areas are getting a "raw deal" from the Government's £1.2 billion splurge on getting the countryside connected to high-speed broadband, a powerful committee of MPs has said.

The cross-party Commons spending watchdog criticised ministers for mismanaging the programme and placing sole provider BT in a "quasi monopolistic position".

The Connecting Devon and Somerset scheme is one of 26 regional projects given public subsidy to expand broadband coverage, which is seen as vital to buoyant rural areas.

BT has all the contracts, as well as the Cornwall and Isles of Scilly Superfast Broadband scheme – which is funded by EU subsidies, rather than the UK government. A report by the Public Accounts Committee (PAC) today points to two main problems with the programme – that BT is exploiting its monopoly by restricting access to cost and roll-out information and that it would be delivered two years later than planned.

PAC chairman Margaret Hodge said: "Consumers are getting a raw deal despite the generous public subsidy."

Concerns were raised after the Government revised its initial target of 90% of the UK having superfast connections by 2015 to 95% by 2017.

The projects in the Westcountry say they will beat this. Devon and Somerset – which has £30 million from the Treasury and £20 million from local authorities – has a 90% "super-fast" target for the end of 2016.

The Cornwall and Isles of Scilly £132 million broadband scheme is aiming for a higher percentage of premises – 95% – to be hooked up next year.

It is the final and hardest to connect to premises – the remaining 10% nationally and in Devon and Somerset or 5% in Cornwall and Scillies – that causes the most concern.

More advanced technology than fibre optic cables will be required to get fast speeds to these properties – around 100,000 in the Westcountry – hence the concern over transparency.

A raft of PAC recommendations include the Department for Culture, Media and Sport not spending any more of the £250 million of public money "until it has developed approaches to secure proper competition and value for money for improving superfast broadband after 2015".

But a BT spokesman said: "We are disturbed by today's report, which we believe is simply wrong and fails to take on board a point-by-point correction we sent to the committee several weeks ago.

"We have been transparent from the start and willing to invest when others have not.

"It is therefore mystifying that we are being criticised for accepting onerous terms in exchange for public subsidy – terms which drove others away. The taxpayer is undoubtedly getting value for money.

"BT faces a payback period of around 15 years on its rural broadband investments in spite of the subsidies available.

"The Department for Culture has imposed a rigorous auditing process that ensures every penny is accounted for.

"Rolling out fibre is an expensive and complex business but we remain committed to the programme.

"The network we build will be open to all our rivals, who will be able to sell services to consumers, paying us the same prices we charge our own retail division."

A DCMS spokesman said: "We put in place a fair commercial process and encouraged different suppliers to bid. We are disappointed that the PAC fails to recognise that thousands of rural premises who have never had a decent broadband supply are now getting one, something that is vital for farmers, rural businesses and all those who live outside major cities."

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