INCA Demands Share of GBP129m Clawback for Alternative Broadband ISPs

The Independent Networks Co-operative Association has called on the Government’s Broadband Delivery UK programme to ensure that up to around £129m of reinvestment funding from clawback (gain share) be put to competitive tender rather than hand it back to BT to further enhance their “fibre broadband” coverage.

At present most of the related BDUK contracts have a clawback mechanism, which means that take-up beyond 20% can trigger a return from BT of some of the original investment and that can then be used to extend coverage or improve service performance. Last month it was confirmed that this reinvestment could be worth up to £129m (here).

However INCA, which helps to represent a number of alternative network providers, wants to see more of the reinvestment going towards projects that aren’t dominated by BT.

Malcolm Corbett, CEO of INCA, said:

“INCA represents a wide range of alternative suppliers, and many are already making excellent progress delivering super and ultrafast broadband services in urban and rural areas. Increasingly, government and BDUK see these suppliers as forming an important part of the mix for maximising coverage and achieving the best possible value for money for local broadband schemes.

More often than not, investment from altnets requires less public subsidy than Telcos, for example, 50% rather than 85%, and regularly requires no public funding at all. This is in part due to their local knowledge of the community and geography, as well as the fact that they can be far more flexible in their approach and commit private investment to areas that BT finds challenging.

In many of our towns, cities and rural areas, alternative suppliers including Gigaclear, Hyperoptic, ITS Technology, CityFibre and UK Broadband, are building new ultrafast and superfast networks with great success, creating the digital infrastructure necessary to help our businesses and economy thrive. Often they work in partnership with other providers and with community schemes, for example B4RN, Fibre GarDen and Cybermoor.

It is unacceptable that many urban areas, in addition to the well-publicised rural notspots, still suffer from poor broadband. It is the alternative providers that are often willing to invest in digitally deprived areas when others would prefer to wait for a subsidy to materialise.”

The situation for how clawback is reinvested will probably come down to a local decision and vary from place to place. In some areas it may be more viable for the money to support an extension of BT’s FTTC/P infrastructure, although as the focus switches to the expensive final 5% of the UK then that may change.

Indeed BT has already shown that they can struggle to find a viable model for pushing superfast (24Mbps+) connectivity out into the most remote areas (example), where gaining a fair return on any investment suddenly becomes much more challenging.

The debate is expected to form a large part of the agenda at Transform Digital: Bristol Conference being held on 15th and 16th September, where the key note speaker is Chris Townsend (BDUK’s CEO), and will include representatives from local authorities, BT, Vodafone, Virgin Media and the chief execs of many independent providers.