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LONDON (Alliance News) - The Departure for Culture, Media and Sport's Broadband UK project to roll out fast broadband services to rural areas has come under fire from the government's spending watchdog for creating a "monopoly" for BT PLC, the Financial Times reported.
A group of MPs found that BT has been in a position to win all of the GBP490 million state subsidies on offer in the GBP1.2 billion project.
?The government has failed to deliver meaningful competition in the procurement of its GBP1.2 billion rural broadband programme, leaving BT effectively in a monopoly position,? Margaret Hodge, chair of the public accounts committee said, according to the FT.
Hodge also criticised BT for "exploiting its monopoly position to the detriment of the taxpayer, local authorities and those seeking to access high-speed broadband in rural areas.?
Nine suppliers were initially bidding within the BDUK framework, but most dropped out, and Hodge said that although the DCMS has been warned about the lack of competition previously, it had still allowed "poor cost transparency and the lack of detailed broadband roll-out plans to create conditions whereby alternative suppliers may be crowded out."
The committee found that the DCMS had failed to meet its recommendations. It along with BT were asked to provide further evidence after it issued a report in September 2013 on the programme.
?Since our hearing in July last year, when 26 of the 44 contracts to deliver this were with BT, all remaining contracts have now also gone to BT,? Hodge said.
BT shot back at the claims.
"We feel their criticism of BT is inaccurate and unjustified. BT was the only company willing to accept the challenging terms on offer and make a significant investment in rural areas," a spokesperson for BT told the Financial Times.
?This was at a time when others walked away when they realised easy pickings weren?t to be had. Claims that BT is a ?monopoly? are simply inaccurate given more than 100 internet service providers are offering fibre across BT?s open network.?
The public accounts committee has called for details of BT's plans to be provided by the government so that rival groups can compete in local areas, and asked for the DCMS to ensure competition and value for money in the next stage of funding for the programme.
http://www.ft.com/cms/s/0/12444854-b8dd-11e3-835e-00144feabdc0.html#axzz2xc9u3fdY
BT shares were up 0.1% at 379.88 pence at the open Tuesday.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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