”A proposed £600m deal between the Government and BT’s network subsidiary Openreach to deliver superfast broadband to 1.4 million rural homes faces legal hurdles.
It is understood that legal advisers have raised concerns that a voluntary offer from Openreach could be challenged in the courts as unfair state support.
Talks between officials and the company are ongoing in the hope of finding a solution, but sources said discussions towards a voluntary investment by Openreach were proving “very challenging”. In some areas the upgrade would come on top of £1.2bn in subsidies that funded upgrades for easier-to-reach rural homes.
The Government has the option of imposing new regulations that would force Openreach to upgrade rural broadband lines when requested, but both sides would prefer a deal that they say would deliver quicker results. Ministers are keen for the final 5pc of homes that cannot receive a 10 megabits per second connection to be upgraded by 2022 at the latest.
New regulation would be welcomed by BT’s rivals, however, who fear that Openreach would be able to dictate the technological and financial terms of a negotiated deal. …”