Virgin Media Keeping a Close Eye on the BT and BDUK Broadband Rollout

Cable operator Virgin Media has told ISPreview.co.uk that they’re keeping a close eye upon the state aid supported BT and Broadband Delivery UK (BDUK) roll-out of superfast broadband (FTTC/P) services, which focuses upon areas that have been left neglected by private sector investment, to ensure that no overbuilding takes place.

The operator notes that postcodes, which appear in many projects to be the primary currency for defining network coverage, can cover a wide area and there may be instances where Virgin Media’s network does reach certain areas/streets but not others within a given location.

Europe’s state aid rules effectively prohibit one Next Generation Access (NGA) network from overbuilding another (i.e. it would be a waste of tax payers money and could risk distorting competition). In other words, Openreach’s FTTC and Virgin’s FTTN/DOCSIS3 solution are considered comparable enough that BT/BDUK’s investment should not be used to upgrade an area where Virgin has already gone.

Part of the rule states, “where in the target area a significant proportion of citizens and business users are already adequately served, it has to be ensured that the public intervention does not lead to an undue overbuilt of the existing infrastructure.” But some allowances are made for alternatives like the separate Connection Vouchers scheme in UK cities.

Daniel Butler, VM’s Head of Public Affairs, told ISPreview.co.uk:

“We are working closely with councils up and down the country to help ensure public money supports areas where the market has not and has no plans to provide services. There is no need or value for the taxpayer in using public funds to build networks where they already exist.”

At present most councils adopt an Open Market Review (OMR) process in order to establish what areas are covered and which aren’t. But some speculate that OMR’s, which are only very occasionally conducted (i.e. not real-time maps), aren’t always an exact science or even reliable (example) and they might thus still leave some limited scope for overlap at the edges of a network. Not to mention that BDUK often tends to shun fixed wireless providers, irrespective of whether or not they can offer superfast connections.

Some recent roll-out updates for BDUK projects have also included locations where Virgin Media’s network is already present, often significantly so. For example, the Better Broadband for Oxfordshire programme recently listed the Oxford suburb of Summertown as being part of its plan (Virgin has a lot of cable there). Likewise Cleethorpes, Waltham and Humberston under the North Lincolnshire scheme are listed but already reasonable well covered by Virgin Media (note: not 100% though).

Meanwhile the Superfast West Yorkshire scheme appears to include Ilkley as one of its targeted areas for infill via FTTC, which is interesting because many of the viable street cabinets in that area (e.g. 18, 30, 31, 32, PE1, PE2 and PE5) cross over into partial coverage by Virgin Media and most locals already receive good ADSL2+ speeds. However it should be said that BDUK/BT also build new street cabinets, so it’s not just a matter of upgrading old ones and the new ones can also be placed in different locations.

A BT Spokesperson told ISPreview.co.uk:

“Local bodies map out the areas already covered and hold a public consultation so that all stakeholders have an opportunity to point out in detail their existing coverage and future deployment plans. This allows the local bodies to identify the intervention area where the roll-out of superfast fibre broadband is to be targeted following a competitive tender.

The whole process is set out in detail in the European Commission’s January 2013 guidelines on State aid and in accordance with BDUK’s published guidance.

In response to the various tenders, BT has designed a solution to provide the most extensive coverage to the current unserved premises in accordance with the local bodies’ bid criteria, across each local body’s intervention area, in the most cost effective way.

Each project has been assessed by BDUK to ensure compatibility with the applicable legal framework and has subsequently been approved. Local bodies continue to monitor their intervention areas and maintain dialogue with stakeholders about deployment questions.”

The fears about overbuilding are unlikely to go away anytime soon but we would like to think that public money is, for the most part, being used sensibly. At the same time modern networks are so complex that avoiding some overlap would be extremely difficult at infrastructure level, but hopefully if this does occur then it is kept to a bare minimum (EU rules do reflect this and seem to allow for some limited overlap).

But it’s also important to afford particular care to the use of public money in areas where alternative networks are clearly already going. In these instances the OMR process may not always be effective enough, which places the responsibility back on the council to ensure that public money is being spent to maximise coverage and not to compete with a rival.

It is not enough to simply say “the OMR said [town/village/street] was clear of other networks“, especially when a person’s own eyes might reveal otherwise. As ever the best way to police this is for consumers to report when BDUK money has been used to extend FTTC/P into an area where you live and know (first hand) that cable or another service was already available, which is of course easier said than done when most ordinary folk aren’t familiar with the underlying infrastructure situation.