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BT reinvests £129 million into public funding for superfast broadband

BT plans to pay back £127 million of the £1.7 billion government contract to local councils, as part of a “claw-back” clause in the contract. The “claw-back” clause is initiated when BT reaches over 20 per cent adoption rate for broadband in the areas specified.

The goal of the contract is to deliver superfast broadband to 95 per cent of all customers in the UK by 2017. BT was awarded the contract in 2014, and is reportedly aiming for 30 per cent uptake with a sweeping success in most areas.

“It's fantastic to see that the roll-out of superfast broadband is delivering for customers and for the taxpayer,” said John Whittingdale, secretary of state for culture, media and sport. “The government was clear from the start that, as levels of people taking up superfast broadband went beyond our expectations in areas where we invested public money, BT would re-imburse the taxpayer for re-investing into further coverage across the UK. This now means that BT will be providing up to £129m cashback for some of the most hard to reach areas.”

“Our £1.7bn superfast broadband programme is on track to reach at least 95 per cent of the UK by 2017, and it is great to see homes and businesses making the most of everything that superfast speeds have to offer.”

2.5 million people now have access to superfast broadband who didn’t before the programme started. BT claims this will reach three million by August 2015 and potentially five million by the end of the year.

“We are delighted to be able to share that success by making up to £129m available to extend the roll-out to more BDUK homes and businesses, earlier than planned and at no extra cost to the taxpayer,” said CEO of BT, Gavin Patterson. "BT will work with local bodies over the coming months to identify where these funds can be provided early to enable the local bodies to invest in increased fibre coverage sooner than would previously have been the case."

BT is not the only communications company working on reaching the 95 per cent goal. Mobile operators EE, Vodafone and O2 are all working on providing 3G mobile data to most of the UK by 2017.

The government programme was started after several studies found little to no broadband or mobile investment in rural villages and towns around the UK. Many of these villages were seen as cut off from the rest of the UK, incapable of gaining the benefits others found on the Internet.

For farmers, the lack of broadband hurt their business, as they were not able to compete on global markets to sell crops and animals. This rural investment hopes to fix most of the issues around the country, and make more people adopt the Internet in some form.

David has been a technology journalist for over six years, covering a wide range of sectors. He currently researches apps, app sectors and app markets for Business of Apps, and has written for ITProPortal, RTInsights, ReadWrite, and Digital Trends.