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By: MarkJ - 5 January, 2011 (6:13 AM)
fibre optic cablebt wholesale ukThe head of BT Wholesale, Sally Davis, has warned the UK government not to risk giving out a significant slice of the £530m pot, which has been set aside by its Broadband Delivery UK (BDUK) office until 2015 (rising to £830m in 2017) to help improve the country's broadband prospects, to smaller ISPs.

According to the FT, government ministers would also prefer local consortiums to bid for the cash and not just the larger operators. This is naturally a competitive threat to BT Wholesale, which over the past few years has seen its market eroded by unbundled ( LLU ) providers and new regulation.

Davis has been quick to caution that such rural networks could risk creating a patchwork of different operators and technologies, which might be incompatible and expensive for BT Wholesale to connect into its core infrastructure.

BT Wholesale's Sally Davis remarked:

"It’s like when the railways were built and you had all these different gauges and they didn’t connect."

The comment appears to be aimed at the success of projects like those pioneered by Fibrestream ( NextGenUs ) in the rural Lincolnshire village of Ashby de la Launde. The privately funded and community owned network was partly built by the community itself and thus hasn't required even one penny of taxpayers' money, yet offers download speeds of up to 100Mbps over a true Fibre-to-the-Home ( FTTH ) fibre optic broadband platform (here).

Networks like Fibrestream's (see our - 'Interview with Fibrestream') usually exist because BT has failed to provide a realistically affordable alternative to such communities, with smaller operators often being able to offer significantly more for a lot less.

The trade off is that such platforms may not be as open (wholesale) to other ISPs as BT's platform. However, given the option between controlling their own affordable superfast platform and being stuck with a super-slow BT copper link, most isolated communities would probably choose the former.

For the time being BT Wholesale probably doesn't have to worry. Projects like the one mentioned above are still somewhat restricted by the high tax and tightly regulated environment of infrastructure development, which to some extent BT can avoid. Smaller community ISPs often lack the scale to be a real threat, although that could easily change if BT doesn't stay competitive.
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