Money being redeployed from BDUK schemes with higher subscription rates than anticipated should be put to competitive tender according to Malcolm Corbett, CEO of INCA, the Independent Networks Co-operative Association.
So far around £130m has been earmarked for reallocation, but rather than giving the money back to BT, INCA is urging local authorities to seek competitive responses from BT and a range of alternative suppliers.
As the collective voice of more than 55 alternative broadband suppliers INCA has first-hand knowledge of the sheer value for money that these providers are delivering.
Malcolm Corbett, CEO of INCA, said: "INCA represents a wide range of alternative suppliers, and many are already making excellent progress delivering super and ultrafast broadband services in urban and rural areas.
"Increasingly, government and BDUK see these suppliers as forming an important part of the mix for maximising coverage and achieving the best possible value for money for local broadband schemes.
"More often than not, investment from altnets requires less public subsidy than telcos, for example, 50% rather than 85%, and regularly requires no public funding at all.
"This is in part due to their local knowledge of the community and geography, as well as the fact that they can be far more flexible in their approach and commit private investment to areas that BT finds challenging.
"In many of our towns, cities and rural areas, alternative suppliers are building new ultrafast and superfast networks with great success, creating the digital infrastructure necessary to help our businesses and economy thrive.
"Often they work in partnership with other providers and with community schemes, for example B4RN, Fibre GarDen and Cybermoor. It is unacceptable that many urban areas, in addition to the well-publicised rural notspots, still suffer from poor broadband.
"It is the alternative providers that are often willing to invest in digitally deprived areas when others would prefer to wait for a subsidy to materialise."
A recent survey among INCA's membership reinforced the fact that these providers are gaining momentum and significant traction. It revealed that more than 1 million premises can already connect to infrastructure built, owned and managed by the firms that responded, a figure set to rise to 10 million over the next few years.
The success of the sector brings extra capacity and investment to assist the Government in reaching its rural broadband targets and supports the emerging 'ultrafast' agenda outlined in the Digital Communications Infrastructure Strategy.
Corbett continued: "Partnerships between alternative providers, local authorities and community schemes can often pay real dividends. For instance the London Borough of Hammersmith and Fulham has struck a deal with ITS Technology to run fibre optic cable through the existing CCTV ducts on a concession basis.
"This means that not only are the costs and disruption of digging in a busy area dramatically reduced, but citizens and businesses get access to dedicated, ultrafast digital infrastructure, and the local authority will generate new revenues from an under-utilised asset.
"INCA is providing a platform for these alternative providers to collaborate and strike up partnerships that will improve the UK's digital infrastructure, and in turn help improve the UK's economic performance.
"It is by engaging the independent, competitive sector that coverage can be extended further and more quickly, with the maximum value for taxpayers' and investors' money, and to the benefit of the end user."