BT Returns £129m BDUK Funding To Local Authorities

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BT says it will work with local authorities to reinvest the cash into further expansion now that fibre adoption rates are predicted to be higher

BT is handing up to £129m of the government funding it received from Broadband Delivery UK (BDUK) back to local authorities with a view to extending superfast broadband coverage even further, and sooner than anticipated.

The company’s contracts with various authorities stated that if expected adoption rates exceeded the 20 percent stated in BT’s original business case, it would return the funding or reinvest it into infrastructure.

The anticipated adoption rate has now increased to 30 percent – two percent more than what BT expects in non-BDUK areas.

Part-refund

BDUK BT Highlands and Islands 3“The Government was clear from the start that as levels of people taking up superfast broadband went beyond our expectations in areas where we invested public money, BT would reimburse the taxpayer for reinvesting into further coverage across the UK,” said culture secretary John Whittingdale. “This now means that BT will be providing up to £129m cashback for some of the most hard to reach areas.”

BT’s fibre network now reaches 23 million premises, or 80 percent of the UK population. Of that figure, 2.4 million homes and businesses have been covered as a direct result of BDUK projects. Company CEO Gavin Patterson says it will now work with local authorities to identify where further expansion can occur.

“We’ve hit our original take-up assumption and have rolled out ahead of target and on budget. This is a real success story for the UK,” he said. “We are delighted to be able to share that success by making up to £129m available to extend the roll-out to more BDUK homes and businesses, earlier than planned and at no extra cost to the taxpayer.”

The government is aiming for 95 percent coverage by 2017 and wants to reach the entire of the UK by the end of parliament, using ‘alternative’ technologies like satellite and LTE to connect the ‘final five’ percent not covered by existing projects.

However, it is unclear where the funding will come from at a time when Chancellor George Osborne is imposing costs across government. BDUK was partly funded by ‘top-slicing’ the BBC licence fee, but this practice will end as part of a new deal with the corporation. It has been suggested that a ‘broadband levy’ will be imposed on the communications industry, but this is likely to be met with resistance.

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