Wednesday, May 23, 2012

UK - Virgin Media argues that BDUK is propping up the BT monopoly

The Guardian reports that:
A total of £980m has been earmarked for improving Britain's broadband network, including £530m during this parliament to get a basic 2Mbps broadband service to Britain's hardest to reach areas. But rivals fear most of the money will go to BT.
It quotes Virgin Media chief operating officer, Andrew Barron as writing in its letters column that:
The noble ambition of locally procured rural broadband networks is protracted and likely to favour the incumbent, freezing out new entrants

The outcome of current government policy is likely to be the subsidy of already dominant infrastructure in areas where we are not, to the sum of hundreds of millions of pounds of public money."

The BT response was that:
BT would be more than happy to compete directly with Virgin for BDUK funds but we doubt that will happen. 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. Fujitsu have announced their intention to bid for funds and so there will be a competitive process. We are already seeing this in several part of the UK.

The BBC reports that the Labour Party spokesman saw HMG "sleepwalking into another monopoly".

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