The Department for Culture, Media and Sport (DCMS) has rejected plans to help smaller internet service providers (ISPs) challenge BT for state funding to roll out super-fast broadband in rural areas.
It has turned down a framework proposal devised by the Independent Networks Cooperative Association (INCA), which targeted the additional £300 million allocated to the Broadband Delivery UK (BDUK) scheme from the BBC TV licence fee for 2015-17, ISPreview reports.
This means BT will remain the only ISP eligible to receive funding through the BDUK project, making it increasingly difficult for smaller companies, many of which focus on rural areas, to compete.
INCA's proposals were designed to run alongside the BDUK scheme rather than replace it and received the backing of many smaller ISPs.
However, despite a promising early response from DCMS secretary of state Maria Miller, the government has decided not to implement the plans.
An INCA statement said officials had asked for a "detailed analysis of a proposed alternative competitive delivery model, including network design, commercial approach, technical standards, names of investors and specifically the purpose of any funding requirement".
In light of this, INCA claimed the government "won’t believe there is an alternative unless someone delivers it to them fully completed and with all the bases covered".
While the DCMS did say it is happy to hear more details if the proposals can be developed under other arrangements, INCA believes this has created a "Mexican stand-off", as non-incumbent players will not engage with government if they think it is not serious about encouraging competition.
This could lead to the government struggling to deliver value for money or generate more external investment.
INCA's statement concluded by claiming that investment and innovation in broadband projects throughout the country can only be boosted by encouraging competition.
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Posted by Craig Roberts