From our CEO, Liv Garfield ..........................
The Public Accounts Committee report into Rural Broadband
Lets understand the real facts
You will no doubt have seen in the media that BT, Openreach and the Department for Culture Media and Sport (DCMS) were subjected to aggressive and unjustified criticism last week from the parliamentary Public Accounts Committee (PAC), and its chair, Margaret Hodge. This followed the publication of the PAC’s report into the Broadband Deployment UK (BDUK) procurement process into rural parts of the UK.
The Public Accounts Committee is a parliamentary committee which operates independently of government. It's not a formal government body and is mostly non-Government members. The PAC acts as an independent reviewer of Government policy, it is therefore in its interest to be critical of government programmes, and it has a reputation for doing just that.
The PAC heard evidence about the BDUK process from a range of stakeholders over the past few months, including a number of BT’s rival operators and community group. In response, Sean Williams, BT’s strategy director gave a full and open explanation of our procurement approach.
The PAC panel are not industry experts, and I believe this came across clearly in the final report, which was confused, heavily weighted against BT, and failed to demonstrate even a basic understanding of the economic realities of deploying fibre to rural areas. It also failed to take into account a point-by-point correction we had submitted to the Committee before it was published.
It's a key point to note about this PAC report, that Matt Howett, Principal Telecom Regulation analyst at Ovum, commented that it, “lacks understanding of the basics.” His view, shared by other experts reading the report, was that “the more sensationalist claims that will most likely make the headlines… are mostly unjustified or overlook some of the realities.”
The main criticisms of the report focused on the impression that by winning all of the BDUK bids to date, we have ‘squeezed out’ others in the market, especially smaller players, and we are being less than up-front about our costs in order to build a monopoly on fibre in rural areas.
I want to be very clear about this: we have won because we offer the best solution, at the best price, and because we, unlike others, can be trusted to deliver what we have promised.
Our successful £2.5bn commercial investment in fibre has meant that, unlike others who chose not to invest, we already have experience, thousands of highly skilled engineers, a robust cost effective supplier network and a massive fibre footprint across the country.
We were therefore able to provide the extra coverage that BDUK councils needed as a ‘bolt on’ to our existing network. Is it any surprise, then, that we can make councils’ money go further, and bring fibre to more people, than others who would have to build a whole new network?
Andy Kerr, Deputy General Secretary of the CWU, hit back at the PAC on exactly this point:
"The fact is that BT was the only company prepared to make the investment required to deliver fast broadband services to rural areas.
Despite the public money it is receiving, BT's decision to participate in this vital national project represents a significant investment at BT's own risk, which is not expected to see a return for a number of years.
Other providers withdrew from the bidding process because they could not see a business case for investment.
You have to wonder what the Public Accounts Committee actually want of BT and Openreach - because the stark truth is that without the commitment to invest, the long-overdue efforts to bring high speed broadband to the rural communities and businesses crying out for such services would be in tatters.
Rather than bashing the one company that is investing its own money into projects that are vital for the general good of the country and creating thousands of skilled jobs in the process, we should be asking one very simple question: Why have BT's competitors decided not to risk making investments of their own - relying on BT's investment to take their own services to rural areas?"
Well said Andy !
I also wholeheartedly reject the argument about BT rebuilding its monopoly, we are a truly open network, we offer all of our fibre products on an entirely equivalent basis to all providers, and more than 70 of them are using our fibre products. Also remember we compete heavily with Virgin, who have around 12M premises passed with their fibre products, so this is definitely a competitive market.
I am proud of what we have achieved with our commercial programme, and I’m proud that the risk we took to invest in fibre means that we are the company who can be trusted to provide the best deal for rural Britain.
We should be in no doubt that the UK government wholeheartedly shares this belief – Ed Vaizey, the Minister in charge of Broadband roll-out, strongly defended our record on the BBC’s Today programme, and across other broadcasters last week, saying :
"BT is providing great value for money. They are putting up more than a third of the cost of rural broadband. We are going to deliver 90 per cent super-fast broadband. That was always our target.
BT is delivering under our scheme to up to 10,000 homes now; it will deliver to millions of people over the next two years with the best value-for-money, government-sponsored broadband scheme you will pretty much find anywhere in the world"
I couldn’t agree more.
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Topic: Rural broadband rollout: Taxpayers being 'ripped off', say MPs (Read 5149 times)