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

Monday, March 10th, 2014 (1:54 am) - Score 2,979

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.

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Mark Jackson
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 Twitter, , Facebook and Linkedin.
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7 Responses
  1. Avatar tonyp says:

    Is competition a good thing? More than one supplier of FTTC/FTTP ought to keep end user costs lower(?). Personally I would love provider diversity but that ain’t going to happen.

    Apart from all too frequent power outages, I am in an area which is not likley to get FTTC from Openreach until at least 2015 yet there is a Virgin trunk cable (marked Nynex on the traps) passing through the locality (poss 10 metres from my door). However Virgin do not have any plans to provide their service (and their ADSL is pointless) in my locality. I am wondering if the Herts and Bucks BDUK (blogs passim) will finally provide decent service to my area though I don’t think the latest list covers it. Mobile coverage is poor here partly due to topography. And this less than 60Km from London central!

  2. Mark Jackson Mark Jackson says:

    Competition is a good thing but not if it’s created through a market distortion via public funding, especially when we’re talking about predominantly urban areas where Virgin are present and the case for public money even less. But hopefully all parties are staying vigilant.

  3. Avatar Raindrops says:

    If Virgin and others like B4RN who it also looks like have BT building in their back yard are smart they will sit back let BT do their thing (IE stupidity) over build in their area and then launch a joint case against them and take it all the way to the EU.

    I hope parties like Virgin and B4RN are reading and reach out to each other, you have a far better chance of taking down an evil overlord with an army rather than as individuals.

  4. Avatar Bob says:

    Duplicating the Local Loop is not a viable option. What is really needed is full separation of the Local loop from BT. This totally removes the conflict of interest within the BT group

    If the local loop is not owned by BT or is at least a totally separate BT group company the ball game changes because you have a business that rather than trying to keep competition out will be actively trying to get companies using the local loop. It will be the case of the more the merrier as it is more revenues

  5. Avatar JNeuhoff says:

    @Bob: Actually, the local loops have to be replaced, they mostly still consist of old copper wires, thus are not fit for tomorrow;s requirements. Would separating BT Openrech from the BT Group really make a difference and speed up the process of replacements?

  6. Avatar Ignitionnet says:

    I believe PE cabinets are new cabinets that are being built as part of network rearrangement to deliver FTTC to EO lines.

    Quite an expensive start to the programme.

  7. Avatar Mark says:

    In our area (West Yorkshire) it would appear that most of the areas being covered by the BDUK funding already have internet access above 2Mb. A lot of areas are being gap filled where residents have 16Mb plus in speeds.

    We languish on 300Kb speeds only 5 miles from the centre of Leeds with what looks like no hope of upgrade because our cabinet only has 110 homes on it and as such is not commercially viable. Even though we have had the fastest take up of fibre in the country to another 2 cabinets on our estate.

    The problem is that the BDUK funding is not being rolled out according to need, it is being rolled out to a political agenda.

    We really should have a completely impartial ombudsman look at the planned spending/deployment/roll out of this and ensure that it is actually being done fairly for all.

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