Member Article

North East telecoms boss criticises Government's "ill-advised" broadband project

The boss of North East telecommunications firm Odyssey Systems has said the Government is to blame for costing the tax-payer £1.2bn by mismanaging the roll out of superfast broadband.

Mike Odysseas, Founder and Managing Director of Odyssey Systems, has defended BT and echoed today’s (Sept 26) Parliament’s Public Accounts Committee (PAC) ruling that it was the Government’s poor management of the project which resulted in telecoms provider BT investing just £356m in the superfast rural roll out, but gaining in return assets paid from the public purse worth £1.2bn.

In a blistering report, the PAC criticised the project, saying customers would get a “raw deal” because ministers had put BT into a “quasi-monopolistic position.”

It also said the project would fail to supply 10 per cent of rural locations with superfast broadband, despite running two years behind schedule.

Margaret Hodge, the committee’s chair, said: “The consumer is failing to get the benefits of healthy competition and BT will end up owning assets created from £1.2bn of public money. The taxpayer is getting a raw deal despite the generous public subsidy.”

The Government’s plans saw private firms given the right to bid for installing superfast broadband across 44 rural areas by 2015. The Department for Culture, Media and Sport estimated that suppliers would contribute £563m to the capital costs of the programme, while local authorities and central Government would each contribute around £500m.

But the PAC said the department had set the scheme up in manner that “reduced competition” and allowed BT to become the only company bidding for contracts.

Mike Odysseas, managing director of Odyssey Systems, said: “The whole project was doomed from the beginning, the bidding process made it all but impossible for anyone other than BT to bid. To then criticise BT for accepting free money is a little late now.

“Ministers need to talk to internet service providers in order to gain a better understanding of this very complex and fast moving industry. The BDUK project was ill advised by an army of external consultants when the industry was happy to help for free.

“However, the Government is starting to listen and is now inviting internet service providers such as myself to meetings at Parliament to help structure these projects so these almighty errors are avoided.”

This was posted in Bdaily's Members' News section by Mike Odysseas .