Procurement of broadband upgrade is “non-competitive”, say Lords

3 August 2012

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3 August 2012 | Adam Leach

People and businesses in the farthest reaches of the UK are at risk of being left behind by the government’s broadband strategy in part because the procurement process is “non-competitive”.

Broadband For All - An Alternative Vision, published this week by the House of Lords Communications Committee claimed due to the nature of the broadband provider market and the structure of the procurement process there is a lack of competition.

In June 2010, Jeremy Hunt, minister for culture, media and sport, announced the ‘Broadband Delivery UK’ policy to rapidly improve broadband infrastructure in Britain. The committee welcomed the government’s commitment to prioritise improving broadband delivery. But it said the policy is too focused on improving provision in areas that already had good quality broadband and risked prohibiting those further afield from “harvesting the fruits of the information revolution”.

The peers believe that under the current strategy, some contractors would find it unprofitable to provide services in isolated parts of the UK, so only large contractors, who would be able to offset these contracts against profits on more lucrative deals elsewhere, would be interested in bidding.

The report said both the small size of local authorities and the gap-funding model, through which bidders specify how much they are willing to invest in the project with the remainder to be filled with public money, threaten to restrict competition.

Instead, the committee urged the government to create a network of broadband hubs which would enable local communities and business decide how best to connect to them.



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