Virgin Media UK Sue Durham Council Over Fibre Optic Rollout Costs UPDATE

Cable broadband ISP Virgin Media has taken the unusual decision to sue Durham County Council (England) in the hope that doing so will enable them to lay new fibre optic cable along grass verges and without having to pay “hefty” fees per metre. The case will test the recently revised Electronic Communications Code (ECC).

At present Virgin Media are deep into their £3bn Project Lightning expansion, which is working to extend their Hybrid Fibre Coax (HFC) and Fibre-to-the-Premises (FTTP) based EuroDOCSIS ultrafast broadband and TV network to an additional 4 million premises by around the end of 2019 (possibly 2020). Once completed it should extend their UK coverage to roughly 60% of premises (1.2 million premises have already been reached).

Meanwhile the revised ECC, which formed part of the 2017 Digital Economy Act, has been designed to make it easier and cheaper for mobile and broadband operators’ to deploy new infrastructure (masts, cables etc.) on public or private land (details). On top of that it should now be possible for telecoms firms to reach rental agreements that would see them paying about the same as utility providers (gas, water etc.), who often pay less.

This law will now face its first test in Durham. Last year Virgin Media announced that an extra 16,000 homes and businesses in the county would be the next in line for their deployment, which was due to complete by the end of 2019. Unfortunately the operator claims that the council’s fees for land access have effectively put up a “broadband blockade” that is “holding [their] rollout to ransom.”

Virgin told ISPreview.co.uk that the local build was “initially smooth with good support from the Council“. However, the rollout hit an impasse at the beginning of 2018 when the Council wanted to charge to access grass verges that run alongside public pathways. This is needed so that they can lay fibre optic cables while minimising any disruption caused to residents.

Tom Mockridge, CEO of Virgin Media, said:

“We are disappointed to be taking this action against a Council with whom we initially had a good working relationship. By demanding money for land access Durham County Council is now putting up a broadband blockade to thousands of homes and businesses across the county.

This significant planned investment by Virgin Media will boost the local economy and provide consumers with a real alternative to BT’s Openreach network. With Virgin Media offering speeds 13 times faster than the local average, holding this fibre rollout to ransom over land fees risks leaving areas of Durham in the broadband slow lane.

Durham has no basis for imposing any kind of a land levy in these circumstances and its attitude runs counter to that we have faced from more forward-thinking councils. … It’s time rhetoric was put into action to truly break down the barriers to building broadband.”

The operator also hinted that this issue goes wider than Durham and that “haggling over land access” was slowing down the broadband rollout and thus deterring investment. Tom also noted that challenges like this are creating an “impediment” to the Government and Ofcom’s ambition to both increase the availability of fibre optic infrastructure and network competition to BT.

Unfortunately Durham Council has not yet responded to Virgin Media’s attempt to “break down the barriers to building broadband” and so we don’t have their side of the story, which might have helped to provide some useful context. Some of Virgin’s contractors have not exactly built the best reputation of late (here) and so it’s possible that Durham may have sought a safety-net via charges.

One key principle behind the ECC is that no-one should be unreasonably denied access to an electronic communications network. The ECC envisages parties reaching an agreement for rights of access over land. However, in the absence of such agreement, there is a provision to allow for such rights to be imposed by the Upper Tribunal (Lands Chamber). Virgin Media will now seek these rights to be imposed by the Tribunal.

The Upper Tribunal will balance the impact of installation to the landowner against the benefit to the end user of the services being installed – in this case the residents of County Durham.

UPDATE 9:16am

The response from Durham Council’s press office email contact leaves much to be desired (the only other press contact is by snail mail): “The recipient’s mailbox is full and can’t accept messages now.”

UPDATE 5:04pm

We finally have a comment from the council.

Stuart Timmiss, Head of Planning at Durham Council, said:

“We are extremely disappointed that Virgin Media has decided to take this course of action as we were under the impression we had a good constructive dialogue and that we were awaiting further information that we had requested from them.

Many meetings have been held over recent months, mostly to deal with the poor performance by Virgin Media in our communities. Earlier this year, we took the unusual step of serving the company with an improvement notice due to a significant number of complaints received from residents on the streets in which they were operating. This included poor reinstatement that is yet to be resolved, drives being blocked over long periods of time as well as damage to property. Virgin has been proactive in resolving these issues having terminated their contracts with contractors on site. However, these issues are not uncommon and we are not the only local authority who has been forced to take such action.

Having said that, the roll out of superfast broadband across our county is very important to us and we will continue to work with all providers in finding the best way to achieve this. Our work through the Digital Durham programme is rolling out fibre based broadband right across the county ensuring all households have access to superfast broadband. Providers such as Virgin Media only provide broadband services to certain areas within the county which they deem to be commercially viable.”