BT and Virgin Media spar over rural broadband cash

BT has rebuffed concerns raised by its cable rival Virgin Media, which suggested a government broadband scheme could end up cementing BT's dominance of the UK's fibre network.

BT has rejected the concerns of its rival, Virgin Media, that rural broadband funds could end up supporting BT's dominance of the UK's fibre network. Photo credit: Ell Brown/Flickr

Earlier this week, Virgin's chief executive told the Financial Times he feared the allocation of funds under the Broadband Delivery UK (BDUK) scheme would leave BT as the sole owners of rural broadband cable infrastructure. He argued that while there is fierce competition between ISPs in urban areas, there are no other fibre owners in the countryside that can compete with BT.

The BDUK scheme gives cash to regional councils to spend on improving infrastructure in areas underserved for broadband. The scheme is part of the government's push to bring super-fast fibre broadband to 90 percent of the UK, and a minimum of 2Mbps to all business and residential subscribers.

On Friday, BT responded to Virgin chief Neil Berkett's comments, saying its presence in rural areas is a result of its stronger commitment to serving those areas.

"Virgin Media is in no position to lecture BT on rural broadband. BT has brought copper broadband within reach of 99 percent of UK homes, whilst Virgin have cherry-picked over the years and ignored rural areas," a BT spokesman told ZDNet UK.

BT has brought copper broadband within reach of 99 percent of UK homes, whilst Virgin have cherry-picked over the years and ignored rural areas.

– BT

"We believe that Openreach is well placed to secure many of the funds that are being made available, but that is because it operates a network that is open to other companies on an equivalent basis and so we bring competition with us," he added.

BT was forced to open up access to its fibre infrastructure by a European Commission-backed Ofcom proposal, designed to prevent a monopoly by the company on fibre broadband services. Before that, Ofcom's predecessor Oftel had compelled the telecoms incumbent to allow other companies to install their own equipment in its telephone exchanges.

"Virgin Media on the other hand provide no such access to their network, which is a shame, as such access could help to improve the broadband market," BT said.

Private investment

However, Virgin noted on Friday that it has made billions of pounds of private investment to create a fibre-optic network that acts as a competitive spur to BT. This is in contrast to its rival, which did not have to draw on non-public funding to establish its infrastructure, it added.

"We have a once-in-a-lifetime opportunity to make the ambition of a fully digitally-enabled society a reality beyond the country's cities and towns," Virgin told ZDNet UK. "So it's disappointing BT continues to attempt to talk about where we are, while others are trying to find a solution to the delivery of quality broadband to the 'final third' — rural areas where there is no other infrastructure except BT's government-gifted ducts and poles."

Virgin said although it is expanding its reach in urban areas, there is still little-to-no competition to BT in rural locations. This has resulted in a widening divide between town and country when it comes to next-generation broadband.

"It is absolutely right to focus efforts — and precious public funding — in areas where the market is failing," Virgin said. "However it is vital that it does so in a way in that creates a truly competitive investment dynamic, rather than effectively replicating a past monopoly that will require further regulation in future."

BT is due to publish the cost of accessing its poles and ducts "in the coming weeks", according to the company's spokesman. Until that point, other broadband providers do not know how viable it will be for them to pay to access the infrastructure.

Japanese technology giant Fujitsu has said it will spend up to £2bn building a fibre network for rural areas of the UK, which would be open to all ISPs — including BT — in order for them to resell the services to end users. However, the scheme relies on Fujitsu securing public funding, as well as obtaining agreeable terms from BT over access to its ducts, which would be used to lay the cable.