EU Giving High Priority to Resolution of UK Superfast Broadband Delay

The European Commission (EC) has given a “high priority” to resolving competition concerns over the UK governments allocation of State Aid for its national superfast broadband deployment, which appears to be delaying the approval of funding for several related Local Broadband Plans (LBP).

The EC assesses each LBP on a case-by-case basis and has already approved others (e.g. Birmingham’s project), although mixed concerns over limited access to Dark Fibre lines, the UK’s lower speed targets (25Mbps+ for 90% by 2015 vs the EU’s 30Mbps+ for 100% by 2020) and a lack of competing operators for related contracts seem to be holding up the final approvals (details).

In particular the limited choice of operators in the Broadband Delivery UK (BDUK) framework (i.e. BT and Fujitsu UK) is understood to be a significant factor, especially given the fact that Fujitsu has yet to win any major contracts. In several cases Fujitsu has even withdrawn from tenders (e.g. Wales) long before the contract itself was awarded, which left BT as the only option.

The BDUK framework is also understood to have set the economic bar too high for smaller ISPs (altnets) to get involved, which resulted in many of the original bidders (e.g. GEO, Vtesse, Cable & Wireless Worldwide etc.) leaving the process. For example, bidding ISPs are required to have a minimum turnover for the last two financial years of at least £20m; that’s tough to do if your speciality is hooking-up isolated rural villages.

Joaquín Almunia, VP of the EC’s Competition Policy, said (PC Pro):

“The assessment of BDUK is a high priority for the Commission services. They will make every effort to finalise that assessment as soon as possible after they receive all the requested information from the UK authorities.”

So far the UK has yet to provide all of the needed information, although unfortunately the EC isn’t saying much about precisely what it wants to see changed. Earlier this month a BT spokesperson said, “this is an EU issue as the commission is developing rules that need to work across Europe as well as taking the different conditions in the UK into consideration. We are working with the UK authorities for an outcome that both incentivises further investment in fibre broadband and delivers vibrant competition in broadband services.”

Most recently a small band of altnets have moved to organise themselves into a more constructive group in order to challenge BT, although whether or not this will produce any positive result remains to be seen (here). It should also be said that most of the affected projects have given themselves until Q4-2012 to gain final approval, which means that the current difficulties don’t technically constitute a delay. On the other hand many projects could perhaps have proceeded sooner if given an earlier approval.