BT has not been awarded a £35m contract for the second-stage delivery of broadband in Devon and Somerset after concerns were raised that the deal did not offer value for money.
The decision was made by the Connecting Devon and Somerset (CDS) programme which said that, despite discussions with BT, it believed that the funding would not guarantee 95 percent coverage in the counties by 2017.
CDS has already raised £94m in funding as part of the first stage to deliver broadband to 90 percent of premises by the end of 2015.
This comprised £32m from the government's Broadband Delivery UK (BDUK) agency, £10m from the Somerset and Devon councils and £41m from BT.
Second-stage funding saw another £22.75m awarded by BDUK, while the councils combined to match this, putting almost £46m up for grabs to bring broadband to the final 10 percent of the rural counties' populations.
However, allocating £35m of this funding to BT was not signed off by CDS leaders as they said it did not offer value for money with regards to the timeline and scale of BT's proposals.
Councillor David Hall, cabinet member for Somerset County Council, said it was a huge disappointment and that BT had “let the councils down”.
“They have also let the CDS partnership down, and worst of all they have let residents, communities and businesses in Somerset and Devon down,” he added.
Councillor Andrew Leadbetter of Devon County Council also criticised BT, saying that, while ensuring broadband for all is vital, the deal on the table was just not worth the cost.
“I am only too well aware of how important good broadband connections are to our rural businesses and residents. But we're committed to delivering value for money for our residents in everything we do. In all conscience we couldn't sign up to this new deal because it just didn't deliver," he said.
The councils will now enter an open procurement phase, creating the possibility for another provider to step in and finish the project. This would be one of the few times that a company other than BT has secured BDUK funding.
BT said in response that its offer when the terrain and layout of the counties is considered is a strong proposal and will benefit many more thousands of homes and businesses.
"A huge engineering operation would be required, including the laying of thousands of kilometres of fibre optic cable and the installation of over 1,000 fibre broadband cabinets and other structures. It is estimated that it would take more than 15 years for BT to get a return on its investment," the firm said.
"Our offer would mean that an additional 34,400 households and businesses in the two counties would have access to superfast broadband by the middle of 2020."
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