Published: 26th Sep 2013
The government's programme to improve rural broadband has been poorly handled, according to the results of a new enquiry.
A study by the Public Accounts Committee (PAC) found the scheme - which aims to establish 90 per cent super-fast internet coverage across the UK - has been mismanaged and allowed BT to establish a monopoly.
Each of the 26 rural broadband contracts handed out by the government up to June were awarded to BT and the PAC claimed the remaining 18 are likely to go to the company as well.
Margaret Hodge, MP and PAC chair, commented: "The programme to extend super-fast broadband to rural areas has been mismanaged by the Department for Culture, Media and Sport."
"The sole provider BT has been placed in a quasi-monopolistic position which it is exploiting by restricting access to cost and roll-out information," she added.
Ms Hodge claimed consumers are unable to receive the benefits of competition as a result of the programme and warned the scheme will allow BT to own significant assets that have been funded by £1.2 billion of public money.
The PAC said the company is currently preventing local authorities from releasing details of the areas that will be covered by the scheme, which means other internet service providers and local communities are unable to identify other means of improving their broadband service.
One such alternative is satellite broadband, which can provide high-speeds anywhere in the UK and is available immediately.
When combined with the fact the government project has been delayed by two years and is not expected to be completed until 2017, the PAC claimed "consumers are getting a raw deal despite the generous public subsidy".
According to the committee, local councils have already contributed £230 million more to the rural broadband programme than was originally expected, while BT has provided over £200 million less.
The PAC concluded the government should not invest any more public money in the project until it can secure "proper competition and value for money".
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