Virgin Media: Ultrafast Broadband Doesn’t Need To Be ‘Regulated Into Existence’

Virgin Media says the £3 billion expansion of its cable network and investments by other companies show there is no need for Ofcom to over regulate and disproportionately favour fibre to the premise (FTTP) over other technologies.

“We view competition in the UK telecoms market quite optimistically indeed,” Dan Butler, Virgin Media’s head of public affairs and policy told a Westminster eForum in London, claiming competition was strong and prices low, and noted that his company offered a 200Mbps service to consumers and 300Mbps to businesses.

“All this proves is ultrafast broadband, using Ofcom’s novel threshold [of 300Mbps], is not something that needs to be regulated into existence.

To FTTP or not to FTTP?

“Of greater concern to us, and [Ofcom’s director of strategy Clive Carter] has helped alleviate some of this, is that when I read [Ofcom’s initial findings] is that Ofcom has a new found zeal for FTTP. Ultrafast broadband is not reliant on FTTP. It would be of serious concern if [Ofcom’s review] marked the moment Ofcom saw FTTP leadership as essential.”

Ofcom has said it is concerned that the UK has less than two percent FTTP coverage and wants to encourage investment in networks that can support ultrafast speeds of 300Mbps and above. It maintains it is “technologically neutral” but says the reality is that more fibre will have to be laid.

Sky and TalkTalk are among those who believe investment in FTTP isn’t possible while Openreach is part of BT and want the two to be separated.

They argue Openreach’s decisions are unduly influenced by its parent company, which has so far pursued a copper-heavy superfast broadband strategy, and that it is not economically viable to build a nationwide FTTP network when it would be unable to compete for the wholesale contract for BT’s retail business.

Openreach view

Virgin Media opposed any move to breakup BT and Openreach and Butler welcomed Ofcom’s decision not to pursue that option, claiming it would have “sent a chilling signal to network investors like ourselves.” His firm is an opponent of government subsidies and urged any intervention to be limited to rural areas, not urban notspots, because companies like Virgin Media would cover them “eventually”.

Similarly, he said it would be a mistake to rule out non-fixed technologies such as satellite in the delivery of a proposed new universal service obligation (USO) of 10Mbps. It doesn’t believe this standard should be increased frequently over time as it says data compression technologies will make networks more efficient and the new USO would be capable of supporting a family of four.

Of course these subsidies would aid competitors to Virgin, whose network expansion plans are mainly limited to areas already served by Openreach. BT has already declared its interest in helping deliver the new USO, having won the lions’ share of government finding available from Broadband Delivery UK.

“The biggest job for government is to define the scope of intervention,” said Butler.

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