BT acting like a 'vampire death-squid' in rural broadband market

Telecoms giant accused of monopolistic tactics by rivals

BT has been criticised by industry rivals for using vampire-esque bullying tactics in a bid to monopolise the supply of broadband to rural areas.

At a House of Commons Public Accounts Committee (PAC) hearing, Malcolm Corbett, CEO of the Independent Networks Co-operative Association, slammed the telecoms giant for withholding information on the last 10 per cent of rural broadband projects.

BT, which has been given £1.2bn in public funds after winning all of the Broadband Delivery UK (BDUK) contracts, aims to provide broadband to 90 per cent of the country, with the other 10 per cent to be covered by smaller companies that can work on local projects. But it has yet to reveal the areas where these smaller providers can operate without the threat of competition from the telecoms giant.

"There are many future proof networks today that are trying to provide broadband [to areas that could be part of that remaining 10 per cent], such as the community organisation B4RN. All of those face being overbuilt with BT turning up with public funding," Corbett said.

"For those providers, BT does not look like the big, friendly, cuddly giant British Telecoms that we all know, it looks more akin to a predatory organisation going after them - it is much more like they are facing a vampire death squid waiting to gobble them up and destroy them," he added.

Corbett said many local authorities are getting fed up with BT as a result.

"They get fed up with the bullying tactics, they tell us in private. Many of the projects have stalled because BT will not tell them where the final 10 per cent is," he explained.

BT's group director of strategy, policy and portfolio, Sean Williams, was quizzed by PAC chairwoman Margaret Hodge on why its broadband investment was significantly lower than had been suggested earlier.

"You said you were willing to spend £1bn in June 2012, where is that £1bn," Hodge asked.

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BT acting like a 'vampire death-squid' in rural broadband market

Telecoms giant accused of monopolistic tactics by rivals

This was on the back of a National Audit Office (NAO) report thatclaimed that BT would only contribute £356m to the project.

Williams said that BT's current estimate is that it would be spending over £700m, and that the NAO report did not factor in operational costs.

But Hodge hit back stating she would only acknowledge cap-ex figures.

"You're getting £1.2bn of capital assets for free from the state - that's our money, not your money," she said.

Hodge then asked Williams whether BT was exploiting its monopolistic position to charge whatever it wants to rivals to access BT's infrastructure.

TalkTalk's CEO, Dido Harding, had earlier stated that BT is behaving and running like a "very intelligent monopolist". She said that BT has a natural monopoly of digging up roads in the country, claiming that there isn't a village in Britain that does not have Openreach engineers.

"The problem is that however the BDUK rules were designed, BT would have ended up winning the vast majority of the bids, and without firm scrutiny it is not our tax money well spent," she said.

She said that BT wants an unregulated market for as long as possible so it can charge what it wants, and this has resulted in TalkTalk launching a competition complaint to regulator Ofcom.

In response to several of the comments, a BT spokesperson said that the company is "investing billions of pounds to radically improve the UK's broadband network whilst ensuring all companies have access to it on an equal basis".

The spokesperson added: "We are therefore shocked and mystified by some of the ill-informed comments played back by members of the committee yesterday. Deploying fibre broadband is a complex long-term investment but that was ignored yesterday as MPs prioritised sound bites over analysis".