BT broadband advances rebuffed by government

The government has reacted coolly to the suggestion that it should work in partnership with BT to drive the rollout of broadband across the UK.

On Thursday, Ben Verwaayen, BT's chief executive, said he was keen for BT's rollout of ADSL to be more closely linked with the government's drive to broadband-enable the public sector.

Verwaayen explained that if ADSL was used to bring broadband to public sector organisations across the UK it would help to lower the cost of upgrading local exchanges and speed up the rollout of high-speed internet services in remote and rural areas.

"Broadband coverage is a key issue for the government," Verwaayen told journalists. "If every hospital and GP's surgery were in an enabled situation, it would be a great help in getting our trigger levels down."

Verwaayen added that although the government has committed some £30m to stimulate the UK's broadband market, only £1m had been spent on infrastructure with the lion's share going on encouraging demand. BT is keen for the government to give more of a boost to the physical rollout of broadband networks.

"We've presented the government with five models, showing how they can help broadband rollout in rural areas," explained Verwaayen.

The prime minister, Tony Blair, announced last November that £1bn would be spent over the next few years to give every school, hospital and GP's surgery a broadband connection.

Precise details as to how this commitment will be delivered are not yet available - to the concern of MPs such as Sir George Young - but the government does not seem keen to leap into bed with BT by linking its plan closely to ADSL rollout.

A Department of Trade and Industry spokeswoman confirmed that ecommerce minister Stephen Timms had been shown five scenarios of future broadband coverage by BT, but explained that the government's strategy on this issue is both technology and company neutral.

"We're interested in listening to what all the operators have to say, but our aim is to deliver the right kind of broadband in every region, so that people have access to the technology that's most suitable to them," the spokeswoman said.

As Timms told parliament last week, competition is a key part of the government's broadband strategy. Although BT has the vast majority of the wholesale ADSL market, there is a flourishing retail sector with over 100 ISPs reselling its products, while NTL and Telewest between them have more broadband customers than BT.

Insiders suggest it is unlikely that the government would want to endanger its competition credentials by throwing its lot in with BT.

On Thursday, BT also announced substantial cuts in the price of its business broadband packages, and a smaller reduction in the cost of consumer ADSL. Several ISPs have welcomed this move and cut their own prices in response, but others have been less impressed.

One BT rival, network operator Thus, has already asked Oftel to investigate these changes, claiming that they are anti-competitive.

Graeme Wearden writes for ZDNet UK