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UPD Conservative MP David Davis Claims BT Could Get Entire BDUK Broadband Budget

Posted: 18th May, 2011 By: MarkJ
bt fttc street cabinet uk installukThe Conservative MP for Haltemprice and Howden, David Davis, has revealed some interesting new information and insights into the governments Broadband Delivery UK (BDUK) office, which is tasked with using its initial £530m budget (could rise to £830m by 2017 if needed - using more BBC money) to help deploy superfast broadband (25Mbps+) to 90% of the country by 2015 (details).

Davis told TheTimes (paywall) a number of very interesting things, not least that "the Government intends to direct about £530 million from the BBC licence fee to enable BT to invest £5 billion in laying cable to about 60% of the population, mainly in urban areas" (note: BT is taking most of its fibre optic cable to street side cabinets and not directly into homes, except in some areas). This appears to suggest that many projects from alternative operators could be left out in the cold, at least when it comes to their chances of gaining a government subsidy.

However, the figures don't quite add up. BT has historically suggested that it could use "match-funding" to reach 90% of the country with FTTC and FTTP services by 2017 (here). So far it's committed £2.5bn of its own money, although match-funding to 2017 would raise their commitment to around £4.16bn (i.e. £2.5bn + an £1.66bn match). It's not clear where the extra £800m or so would come from.

Davis's comments also effectively rule out Fujitsu, Virgin Media , TalkTalk and Cisco's £2bn plan for an alternative that could deliver a true FTTH fibre optic broadband network to 5 Million homes in rural areas (here). The difficulty is that they'd also need around £500m in government subsidy, which always looked problematic.

On top of that Davis, whom believes that more money will be needed to do the job properly, has even suggested employing the 2.5 million "jobless [people] on welfare to [help] build this infrastructure" on the cheap. Indeed much of the cost is often in the physical labour (e.g. digging trenches etc.) and other practical work, although training also costs money and takes time. In practice such an idea would be very difficult to pull off. Stalin (USSR) liked to employ the unemployed too, albeit in a somewhat less well paid fashion.

UPDATE 19th May 2011

An article on PC Pro today is carrying some interesting comments from the CEO of BT Openreach, Olivia Garfield, whom has slammed Davis for his "unnecessarily bleak picture of the UK broadband market". She also stated that BT had "thousands of highly skilled engineers working on our fibre deployment" and didn't need help from the unemployed sector.
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