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Virgin Media worries over development of rural broadband

# 30 August 2011, 06:14 by Chris T

Virgin Media worries that it may get left behind in the battle to secure Government funding for the development of super-fast rural broadband services.

It claims that BT stands to become the only large-scale owner of rural infrastructure because of the way Government subsidies are being distributed, and because of the prices BT wants to charge rivals for access to its own ducts and poles.

Neil Berkett, Virgin Media’s chief executive, believes the distribution process, via English county councils and the devolved administrations in Wales and Scotland, is too fragmented. He claims this gives BT an advantage when councils and local enterprise partnerships go looking for an infrastructure provider to build a network for them.

He told the Financial Times: “I’m really concerned that you will not get infrastructure competition in [rural areas], so that means you’ll have BT as the only infrastructure wholesaling in fibre to other players. That will not, in my view, stimulate the growth and development in a way which you would if you had two infrastructure players.”

Meanwhile BT plans to issue new prices in November for competitors’ access to its ducts and poles after its initial draft pricing met with loud complaints from rivals, including both Fujitsu, which wants to build a rural broadband network utilising Government grants and BT ducts, and Virgin Media, which wants to buy capacity on the Fujitsu network.

But Berkett has expressed doubts that even the new prices will be acceptable, claiming that the initial pricing was four to five times higher than BT’s underlying costs in providing access to its infrastructure.

Ofcom’s chief executive, Ed Richards, warned in May that the regulator would be forced to intervene if BT and its rivals could not agree the price for infrastructure access. Such a move would delay the setting of prices still further.

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