Conservative party’s tax baandoned broadband pledge gives BT a wide berth

With the UK's Conservative party's abandonment of a manifesto tax pledge, BT's position as the dominant provider of next-generation broadband via fibre-optic cable in the country is virtually assured as it makes it prohibitively expensive for rivals to compete in laying new cable that can be charged thousands of times more in tax than BT is.

According to BT, it would carry out a "nationwide survey" to establish the demand among communities for high-speed broadband based on fibre-optic cable. According to analysts this would set areas in competition against one another, with the prize being an upgrade to faster net connectivity.

The company would run the survey as a competition, which would continue till the year end.

According to BT the survey would "enable communities to express their desire for the service''. With this BT would be able to identify 'hot spots' of high demand and influence the company's future deployment plans. So far, 4 million premises are "within reach" of BT's fibre broadband, but this would need to exceed 16 million for BT to reach its target of delivering high-speed fibre-optic broadband to two thirds of the UK by 2015.

However, according to analysts the upshot of the abandonment of the Conservatives' manifesto tax pledge, would be to strengthen the telecoms operator's monopoly in the provision of next-generation broadband. This is due to the manner in which rivals would be charged for laying new fibre-optic cable.

They add that the company's move seems to be calculated to encourage adoption of, and interest in, its fibre-optic broadband so as to avoid forced deregulation by the coalition government. The Conservative party, in its technology manifesto published March had, promised to drive the adoption of "superfast broadband" having connection speeds of up to 100 megabits per second (Mbps)- with the breaking of BT's "local loop monopoly".