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Gov claws back £440m for rural broadband

600,000 homes to get 24Mbps by 2020

The government has clawed back £440m from its superfast broadband programme to connect an extra 600,000 homes and businesses in remote areas.

The cash boost is a combination of efficiency savings and a clawback mechanism which re-invests money when people take up superfast connections installed by the Broadband Delivery UK project.

Around 4.5 million premises have been given access to superfast broadband of 24Mbps through the Government’s £1.7 billion BDUK rollout, with more than 1.5 million signing up for a faster connection.

Controversially, all of those contracts were awarded to BT. But under the terms of programme the former state monopoly has to return part of the public investment when take-up of the new service passes beyond the 20 per cent.

As a result, BT will be releasing £292 million for extra connections – with £129 million already allocated to be spent in regions around the UK.

A further £150m has been recouped from "careful contract management by the government, local authorities and BT" across 44 projects as the first phase of rollout draws to a close.

Some 90 per cent of the country now has superfast broadband, with the government "on track" to reach 95 per cent next December. Under the latest plans, it now believes 97 per cent will receive speeds of 24Mbps by 2020.

It has also promised a legally binding universal service obligation of 10Mbps by 2020. Although so far BT is the only provider to show interest in the scheme, perhaps because the government does not wish to cough up for the final few per cent.

Culture secretary Karen Bradley said: “Broadband speeds aren’t boosted automatically – it needs people to sign up. Increasing take-up is a win-win-win: consumers get a better service, it encourages providers to invest, and when more people sign up in BDUK areas, money is clawed back to pay for more connections.”

Malcolm Corbett, head of the Independent Networks Cooperative Association, said: "Efficiency savings and clawback of goverment funding due to higher than expected take up levels in the BT rural broadband contracts are to be welcomed, but the extra funding should be put out to competitive tender.

He cited the example of rural fibre provider Gigaclear was recently awarded contracts in Devon and Somerset for "full fibre" connections to more than 35,000 underserved rural properties.

"If the additional £440m of grant funding clawed back from BT could achieve anything like the same level of private sector match investment we would make serious progress towards the government's goal of a 'full fibre and 5G' digital infrastructure." ®


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