Virgin: Government broadband funding favours BT

 

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By Nicole Kobie

Posted on 22 May 2012 at 08:42

Virgin Media has complained that rival BT is picking up the bulk of Government broadband funding.

The Government has set aside £530m during this parliament to fund rural broadband and boost networks in cities, but much of that money is going to BT - often the last firm left bidding in rural roll outs.

Ahead of an inquiry in the House of Lords today to discuss the topic of broadband funding, Virgin Media's chief operating officer Andrew Barron wrote to The Guardian saying it was a mistake to hand "the vast majority" of public broadband funding to "an incumbent" - Barron's letter never mentions BT by name.

He said Government must take a "national approach", as its current regional focus means the "noble ambition of locally procured rural broadband networks is protracted and likely to favour the incumbent, freezing out new entrants".

"If we agree competition is the best way to encourage further sustainable investment, and that embedding dominance in markets is bad for consumers, we must also accept that providing the vast majority of available public funding to an incumbent is not in the UK's best interests," Barron argues.

The Broadband Development UK (BDUK) framework originally had nine possible suppliers, but is now down to only two - BT and Fujitsu, with the latter only bidding in select areas. Virgin itself hasn't bid for any public money, instead focusing on its own largely urban fibre network, although the company has said it could work with Fujitsu in the future.

Barron called for the Government to focus funding in areas where competition is currently limited and promote "alternatives" to copper - including public Wi-Fi and 4G.

BT countered that Virgin could join the bidding process, if it opened up its own networks.

“BT would be more than happy to compete directly with Virgin for BDUK funds but we doubt that will happen," a BT spokesperson said. "That is because Virgin have steadfastly refused to provide open wholesale access to their network – a key BDUK requirement – and because they have shown no interest to date in supplying rural areas with broadband."

"This is in contrast to BT who offer broadband services on a wholesale basis to 99% of UK premises," BT added. "Fujitsu have announced their intention to bid for funds and so there will be a competitive process. We are already seeing this in several parts of the UK.”

Legal alternatives

Virgin also called for better tactics to battle piracy, saying people need to be given better access to content. The ISP was earlier this month forced by court order to block The Pirate Bay, subsequently falling victim to a retaliatory DDoS attack from Anonymous.

"People expect this and, as we've seen with music, when legal models don't exist or are priced prohibitively they find other ways to get what they want, even if it's illegal."

Barron called for caution around internet regulation. "Issues such as automatic website blocking, net neutrality and protection of privacy are reverberating around the world, with deep misunderstanding around what current technologies can and cannot actually deliver," he said.