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Entanet Claims UK Superfast Broadband Competition at Risk from BDUK Failure

Posted: 22nd Nov, 2011 By: MarkJ
isp entanet broadband ukCommunications provider Entanet UK, which supplies a number of smaller and medium sized broadband ISPs with internet access solutions, has warned that Geo Networks sudden exit (last week) from the governments Broadband Delivery UK (BDUK) process (here) could have "negative implications" for competition.

Geo Networks withdrew from the BDUK bidding process last week over concerns about the cost and flexibility of access to BT's cable ducts and telegraph poles (PIA). The move meant that Geo would not bid for a slice of BDUK's initial budget (£530m), which is designed to help 90% of people access a superfast broadband (24Mbps+) ISP service by 2015.

On top of that the Bath & North East Somerset Council (BNESC) recently echoed related problems with BDUK (here) and Cable & Wireless's position in the process is also uncertain. Entanet now fears that councils and ISPs "will start to lose interest and faith in the BDUK’s ability" to deliver on its promises.

Neil Watson, Entanet's Head of Service Operations, warned (blog):

"The importance of the BDUK and the Government’s plans for superfast broadband have already helped sway Ofcom to force BT to reduce its original PIA pricing but Geo Networks (and other potential suppliers) believe this has not gone far enough and their withdrawal from future bids has serious implications for the delivery of superfast broadband to rural and hard to reach locations.

This means the BDUK are likely to become more reliant on the main existing broadband network providers such as BT and Virgin Media to reach the last third, which has obvious negative implications on competition within the market."

Watson also fears that the situation could result in a "broadened digital divide", although he balances this against the prospect that BDUK "will continue to find new potential network providers". We're not sure who that could be but time will surely tell.

Neil Watson explained:

"Furthermore, although the effect of the PIA pricing will be important, the BDUK are already investigating alternative delivery methods to reach the more rural areas such as satellite. So, even though this news is concerning for ISPs targeting communities within the last third, there remain plenty of other options, albeit they may rely on the larger providers such as BT and Virgin Media or on alternative technologies such as satellite."

Some critics, such as BT itself, have suggested that Geo wasn't a major player and that its departure didn't come as a surprise because fibre optic deployments require a "high degree of commitment and expertise". Indeed the BDUK process has shown only limited signs of engagement with smaller providers.

At present it's still incredibly difficult to gauge what kind of impact this will have, especially over the longer term. In any case there are no signs of the problem areas being addressed, at least not for another year or two, which would probably come far too late for smaller operators.
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