The Government Could Spin Off its National Broadband Delivery UK Project

The secretary of state for the Department of Culture, Media and Sport (DCMS), Maria Miller, has reportedly called for a radical overhaul over the Broadband Delivery UK (BDUK) office to improve how it’s run and re-focus on tackling the final 10% of poorly served rural areas.

The primary BDUK framework (excluding related city and mobile projects) is supported by an initial budget of £530 million (public funds), which is intended to help match-fund with private sector operators (e.g. BT) and local councils in order to make superfast broadband (25Mbps+) services available to 90% of people in each UK local authority area by the end of 2015 (though many contracts now have end-dates in 2016).

Sadly the final 10%, which typically refers to the country’s most remote rural areas, have only been given a non-binding commitment to deliver internet download speeds of at least 2Mbps (Megabits per second). But an extra £300m from the BBC TV Licence Fee (the old 3.5% Digital Switchover Budget) has already been set aside to tackle this area in the post-2015 period (here).

However no clear post-2015 to 2020 strategy for how the extra £300m would actually be spent has been defined and meanwhile BDUK has faced heavy criticism over the lack of competition in its process (BT are the only viable bidder), funding delays and heavy administration costs. On top of that the Major Projects Authority (here) has issued warnings about the schemes future and the National Audit Office is expected to report further troubles next month (here).

Now the FT reports that Maria Miller effectively wants to spin-off BDUK into a separate organisation or company so that it can be run by commercial orientated “industry specialists” instead of civil servants. This will allegedly form part of her pitch to secure extra funding, although it’s not clear if this is just referring to the existing commitment of an extra £300m or new money. In either case any change would form part of BDUK’s post-2015 efforts to re-focus on improving connectivity for the final 10%.

So far more than half of BDUK’s related Local Broadband Plans (LBP) have signed contracts with BT and are thus progressing towards the final deployment phase. Most of the contracts are expected to be signed by the end of this summer 2013. But tackling the final 10% could be more of a challenge, especially if BT doesn’t want to help rivals figure out where those areas are (here).

At this stage we’re still deeply sceptical about whether or not Miller’s proposed changes, which could just be administrative, will actually trigger a radical shift in the government’s approach to rural broadband deployment or even if that would be a good thing. Tomorrow’s Spending Review might just help to shed some light on the issue.