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BT given 'effective monopoly' on rural broadband

BT has been given an effective monopoly by the Government to run a taxpayer-funded rural broadband programme, according to a powerful committee.

The communications giant has won all 44 contracts awarded under the £1.2 billion scheme to extended services to areas that are not considered commercially viable.

In a second highly critical report on the progress of the plans, MPs said the Department for Culture, Media and Sport (DCMS) had "failed to deliver meaningful competition", which has put BT in a strong position and made it more difficult to insist on value for money.

The department failed to act on warnings that higher standards of transparency around costs must be imposed to ensure that contracts were competitively priced and the company was "not taking advantage", the Public Accounts Committee (PAC) said.

Margaret Hodge, who chairs the PAC, said: "The Government has failed to deliver meaningful competition in the procurement of its £1.2bn rural broadband programme, leaving BT effectively in a monopoly position. The scheme is designed to help get broadband to areas, mainly rural, where commercial broadband infrastructure providers currently have no plans to invest.

"Since our hearing in July last year, when 26 of the 44 contracts to deliver this were with BT, all remaining contracts have now also gone to BT. Despite our warnings last September, the Department for Culture, Media and Sport has allowed poor cost transparency and the lack of detailed broadband rollout plans to create conditions whereby alternative suppliers may be crowded out."

The PAC found there is still a dearth of information being published about planned rural broadband coverage and speed which makes it difficult for potential alternative suppliers seeking to plug the gaps.

The committee said it was "still not good enough that, despite £1.2bn of public money being spent, it is taking so long to get this information out there".

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