OnTheWight received the following letter this morning from BT’s Next Generation Access (NGA) Managing Director, Bill Murphy in response to Simon’s open letter to Cabinet members last week. Ed
BT is keen to make the great benefits of high-speed fibre broadband as widely available as possible on the Isle of Wight. BT’s commercial investment in the island’s fibre network has already resulted in more than 37,000 Isle of Wight homes and businesses gaining access to the technology in areas including Shanklin, Cowes, Newport, Ryde, Sandown and Ventnor. By the end of spring 2014, more than 50,000 premises in total will have access.
The proposal being considered by the Island’s council would benefit 20,000 further premises, none of which are scheduled to gain service from commercial operators. Openreach, BT’s local network business, is using a mix of fibre to the cabinet (FTTC) and fibre to the premises (FTTP) technologies. Both technologies offer speeds many times faster than the current UK average.
Funding model
In terms of value for money, the percentage contributions from the UK government, local authority and the provider are specific to the local situation and reflect the ambitious targets set by the council. The government has stipulated a gap funding model – the provider pays the economically viable cost and public funding covers the remainder. The proposed contract also has a “clawback” clause, so that if the take-up of the service is higher than expected, money will be returned to the council. The council then has the option to invest that money to increase coverage. If take-up is lower than expected, any losses are borne solely by BT.
As you would expect, and contrary to some erroneous claims, BT’s costs for these contracts are transparent and full accounts are available to the central and local government partners contributing public money to fund improvements in rural broadband. BT claims the money only after it has been spent and on production of evidence for that expenditure.
BT’s deployment of superfast broadband in the UK is one of the fastest and largest commercial fibre access network deployments in the world. We have committed £2.5bn of our shareholders’ funds to build this network and we are on track to complete our planned roll out, to some 19 million UK premises during spring 2014.
Open access
Importantly, and unlike many other providers, BT’s new fibre-based network will be open to all communications providers on an equivalent basis. There are more than 80 service providers currently offering or using fibre services over BT’s network in the UK, and all of these will be able to offer services on the Island if they choose to. Competition amongst service providers is essential to attract customers and deliver a sustainable service. Schemes which have struggled to achieve this competitive market for consumers have already resulted in costly failures.
In contrast to such schemes, the approach being considered by the Isle of Wight council has been proven to be successful, and, should BT be chosen, will be delivered by a company with a substantial presence on the Island.
I hope this provides your readers with useful information to allow an informed debate to take place.
Bill Murphy
BT’s managing director, Next Generation Access
