BT IRELAND has withdrawn from the Government's scheme providing a subsidy for the provision of broadband in areas of the country where it is not deemed to be economically viable, writes John Collins.

The contract for the National Broadband Scheme (NBS), which has been beset by delays and a legal challenge, is due to be announced in October. The Department of Communications stated yesterday that "roll-out is due to commence very quickly thereafter". The remaining bidders are Eircom and 3 Ireland.

BT will maintain an involvement in the scheme as it is a subcontractor to 3, providing it with network infrastructure.

A BT spokeswoman confirmed yesterday that it had withdrawn "due to the lack of spectrum being made available" for the scheme.

BT planned to provide coverage using a wireless technology called WiMax. Industry sources said that 10Mhz of radio spectrum was being made available for the NBS.

Following a technical analysis, BT found this was not sufficient as it would have required a large number of base stations to provide the broadband speeds required by the Department of Communications.

As a result the bid would not have been economically viable.

Last night the Department of Communications issued a statement to The Irish Times on BT's withdrawal which said that BT's proposals "have been evolving since May 2007 with much fluidity around the technologies to be used in their proposed solution".

It confirmed that BT requested additional spectrum last March and requested that ComReg reopen a July 2007 decision on spectrum for the NBS.

"While considering BT's request, the department was mindful that the July 2007 decision by ComReg was taken after a period of industry consultation," the department said in its statement. "It was open to all service providers interested in the NBS to comment on the ComReg proposal to set aside spectrum for the NBS.

"Additionally, the department was mindful that each bidder, not the department, is responsible for ensuring that it has the resources, including spectrum, which it requires for its bid."

The BT spokeswomen said the company would "focus on supporting the [3 Ireland] bid".

She added: "Although we are disappointed to withdraw our consortium, we are fully supportive of the goals and objectives of the National Broadband Scheme."

The NBS was the subject of a legal challenge earlier this year by satellite broadband provider National Broadband. It wanted satellite providers to be included on the maps the department drew up which show where broadband is currently available. Mr Justice Brian McGovern dismissed the challenge earlier this month.

It is understood that the department has now finalised those maps. A subsidy will be available to the winning bidder to make broadband available in the approximately 15 per cent of the country where it is not currently available.

The NBS is just one part of a broader €435 million Government broadband strategy revealed earlier this month. The goal of the scheme is to ensure there is universal access to broadband in Ireland by early 2010.