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UK ISPs Welcome Broadband Funding Approval But Seek More Competition

Thursday, Nov 22nd, 2012 (8:41 am) - Score 408

Internet service providers have today given a broad welcome to the European Commission’s (EC) recent decision to grant final approval for the release of State Aid funding to help 90% of UK people gain access to superfast broadband ISP services by spring 2015. But privately many continued to express competition concerns.

ISPreview.co.uk canvassed all of the markets major broadband ISPs for their thoughts on this week’s decision by Europe and found that publicly everybody was pleased with the news (we’re still waiting for a few responses). But privately some major operators, such as Virgin Media, felt it was a shame that the money appeared “unlikely” to be used to create “credible” and long term infrastructure competition elsewhere. The similar need for a strong regulatory framework was also expressed by others.

Virgin Media in particular, alongside TalkTalk, supported Fujitsu’s somewhat failed ambition to build an ultrafast 1Gbps capable FTTH fibre optic broadband network (using BT’s PIA cable ducts), that could have reached 5 Million UK premises in rural areas by 2016 and rivalled BT in those areas. But it needed at least 1 million homes and businesses to break even and later fell out of favour with the government because of its past IT contracts.

Nick Lansman, Secretary General of the UK ISPA, told ISPreview.co.uk:

ISPA welcomes clarity from BDUK and industry on getting more of the UK connected to superfast broadband. ISPA members are bringing faster and better quality broadband to customers. It is important that the right regulatory framework is in place to ensure continued investment.”

A BTOpenreach Spokesperson said:

We are pleased to hear the European Commission has approved the use of state funds for BDUK projects. This decision is very welcome as it will give an important boost to plans to bring fibre broadband to rural parts of the UK. We can now commence work in areas where we have contracts in place and it should also make it easier for those counties who are yet to sign deals with the private sector. It is now full speed ahead.”

A Virgin Media Spokesperson said:

We fully support the Government’s ambitions to bring superfast broadband to areas not currently served by existing fibre networks.”

A Sky Broadband Spokesperson said:

We support efforts to extend the reach and penetration of fast broadband. And where new networks are built at tax payers’ expense, we look forward to appropriate wholesale access delivering consumers choice, competition and innovation.”

Most ordinary consumers don’t pay too much attention to the wider competition concerns, which tend to stem from BT being the only major operator seemingly able to win the related Broadband Delivery UK (BDUK) supported contracts. Indeed the vast majority will probably just be happy to have access to a superfast broadband service, irrespective of whether it almost all comes over BT’s infrastructure (and Virgin Media in urban areas).

But the prices we pay and services we receive are still very much influenced by competitive, which is highlighted by the success of unbundled (LLU) broadband services. At the infrastructure level BT, outside of urban areas, is still the dominant player and the EC’s approval means that BDUK funding is unlikely to change that and could even strengthen their position.

In the future this could result in more calls for a greater separation of BTOpenreach, which manages access to BT’s national UK telecoms infrastructure, from the wider BT group. But Ofcom have shown no signs of pursuing this and are instead set to focus on the development of more competition within the current model by improving access and control over BT’s own services (FTTC, FTTP etc.).

By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on X (Twitter), Mastodon, Facebook and .
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