BT offers to invest £600m to make government’s broadband dream a reality

Government now has the option of leaning on either regulation or private sector investment to fulfil pledge on nationwide high-speed connectivity

Under BT’s proposals, by 2022 99.7% of the country could access high-speed broadband without the need for a satellite connection

BT has offered to invest up to £600m to ensure the government makes good on its pledge to ensure the country has a high-speed broadband infrastructure that can “reach every part of the UK”.

The telecoms giant has volunteered to invest an estimated total of between £450m and £600m to provide the technology needed for the government to achieve its aim of enabling everyone in the country to access broadband connection speeds of at least 10 megabits per second (Mbps). Services will largely be delivered by BT’s Openreach subsidiary.

The government indicated that about 93% of properties in the UK currently have access to “superfast” speeds of 24Mbps or higher. As a result of the government’s ongoing Superfast Broadband Scheme, this figure is projected to rise to 95% by the end of 2017.

To help those currently unable to access anything other than a slow or unreliable connection, over the next few years, BT is proposing to roll out various technologies, including fibre to the cabinet, fibre to the home, and fixed wireless. 

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Under the projections included in the company’s proposals, by 2020 about 99% of addresses should be able to obtain a minimum speed of 10Mpbs, including upload speeds of 1Mbps, as well as built-in measures to minimise delays. Many locations will receive speeds of “substantially more” than 10Mbps, BT believes.

The project aims to deliver fixed-network coverage to as much of the country as possible, with the telco planning to finish work on the building a nationwide fixed network by the end of 2022. Following the completion of the network’s construction, only 0.3% of UK properties will require a satellite connection to attain high-speed broadband, according to the telco’s plans.

The scheme will also have a focus on ensuring those in remote areas can obtain access to fixed wireless networks at an affordable price.

BT’s offer is now one of two options open to the government to fulfil its pledge on countrywide access to high-speed broadband connections. 

The other is a government plan announced last year to introduce a Universal Service Obligation (USO) that would, effectively, give every UK citizen the right to a 10Mbps broadband connection. A government consultation on the USO proposals was kicked off this weekend. 

Culture secretary Karen Bradley said: “The government is taking action to ensure that people everywhere in the UK can get a decent broadband connection as soon as possible. We warmly welcome BT’s offer and now will look at whether this or a regulatory approach works better for homes and businesses.”

She added: “Whichever of the two approaches we go with in the end, the driving force behind our decision making will be making sure we get the best deal for consumers.”

A speed of 10Mbps – with the necessary requirements to limit delays and ensure quality – is what telecoms regulator Ofcom estimates is required to meet the needs of a typical household. This entails members of the household simultaneously streaming films, browsing the web, and making a videoconference call, the government said. 

The government and BT will work together over the coming months to finesse the telco’s proposal. If the government ultimately signs off on the scheme, the agreements made will be legally binding.

The telco’s plan is to recover its costs by charging for the products needed to access its various local networks. This plan is subject to consideration by Ofcom’s ongoing review of wholesale local access.

BT chief executive Gavin Patterson said: “This investment will reinforce the UK’s status as the leading digital economy in the G20. We already expect 95% of homes and businesses to have access to superfast broadband speeds of 24Mbps – or faster – by the end of 2017. Our latest initiative aims to ensure that all UK premises can get faster broadband, even in the hardest to reach parts of the UK.”

Sam Trendall

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