Long Wait for BT’s GBP50m Pledge to Upgrade Broadband in 30 UK Cities

One and a half years ago BT made a £50 million commitment to expand the commercial roll-out of superfast capable “fibre broadband” (FTTC/P) services to 400,000 additional premises in 30 UK cities. Since then the operator has remained largely silent and questions are now growing over the projects status.

BT officially achieved its original £2.5bn commercial deployment goal, which made their superfast broadband services available to 66% of the UK, last spring 2014. Today most of the expansion beyond this point is predominantly being conducted by the state aid fuelled Broadband Delivery UK programme, which is also dominated by BT contracts.

Never the less BT has continued their purely commercial deployments, albeit at a dramatically scaled back pace (partly to avoid conflict with BDUK and because other areas were labelled as economically unviable). But one notable exception to this surfaced in January 2014, when the operator announced a £50m plan to expand their “fibre broadband” service to 400,000 extra premises across 30 cities (here).

Crucially the BDUK programme is prevented by EU state aid rules from investing public money to upgrade broadband infrastructure in urban areas, where it is often deemed that the commercial sector should have no trouble in making the case for private investment. As such BT’s proposal was a welcome development.

Mike Galvin, Openreach’s MD of Network Investment, said last year:

“Some city areas have proved challenging in the past but we are returning to those and will pass hundreds of thousands of additional premises with fibre. We are reaching vast swathes of rural Britain with our public sector partners but we will upgrade these city areas under our own steam.”

At the time BT informed ISPreview.co.uk that the project would most likely be based off a three year deployment and focus on three key areas, which had previously proven problematic for BT’s original roll-out due to various technical challenges or local planning restrictions.

Investment Focus for the 30 Cities
1. Enabling city cabinets that weren’t part of BT’s original commercial plans due to technical challenges or local planning restrictions.
2. Deploying fibre to cabinets to serve multi-dwelling units such as apartment blocks.
3. Laying further fibre – including ‘Fibre-to-the-Premises’ technology – to new build sites in cities.

Since then BT has put in place most of the necessary approaches and technologies needed to achieve the above and we have seen a few related deployments / trials (e.g. London’s FTTrN and Fibre-to-the-Basement pilots), yet the operator has continued to remain steadfast in its refusal to talk about their actual plans for the 30 cities.

It will soon be 18 months since the original announcement and yet we still don’t know which cities are involved, how many premises in each city will benefit, when that will happen or what proportion of the work will involve pure fibre optic FTTP connectivity? Meanwhile many in some of the UK’s biggest urban areas continue to suffer from poor connectivity.

A whisper from BT at the end of last year hinted that an update could potentially be forthcoming by early 2015, but one never materialised. Thankfully, after several months of trying, BT have finally furnished us with a response.. albeit sans a specific roll-out plan. The wait continues.

A BT Spokesperson told ISPreview.co.uk:

“We said in January 2014 that BT would invest a further £50 million to upgrade connections in city centres over the following three years – that commitment still stands.

Indeed, some of that money is already being spent on trials of new fibre technology in London. Those are in-turn helping us plan and allocate funds effectively so that we can reach the largest possible number of homes and businesses in each area.

We will update people on specific roll-out locations in due course.”

One other issue that might be giving BT pause for thought could have to do with a recent comment from the Government’s Communications Minister, Ed Vaizey MP.

At the start of this year Vaizey hinted that the new leadership at the European Commission might be more amenable to the use of state aid for upgrading urban broadband infrastructure (here), which would mark a significant shift from the EC’s previous position on state aid.

Ed Vaizey said:

“We have a problem with state aid in cities – the commission believes cities are already competitive enough. But a new commission might take a different view, which would be helpful.

There are ‘noises off’ that, because the EC recognises that networks are vital aspects of the digital single market and for economic growth, it would look at reasonable arguments on cities again.”

The answer to this could come soon when the EU finalises its Single Telecoms Market package, which may or may not support a greater use of public funding in dense urban areas. Naturally this could impact BT’s investment plans and so the operator might find understandable merit in pausing their strategy until the outcome is known.