BT And Virgin Media Warn Ofcom About Business Broadband Regulation

Steve McCaskill is editor of TechWeekEurope and ChannelBiz. He joined as a reporter in 2011 and covers all areas of IT, with a particular interest in telecommunications, mobile and networking, along with sports technology.

Follow on: Google +

BT and Virgin Media say giving rivals greater access to their business broadband networks will increase prices and damage service quality

BT and Virgin Media have warned Ofcom that any move to provide rivals with greater access to their business broadband networks or to allow competitors to deploy their own dark fibre would damage the UK market.

Both firms operate their own business networks across the UK, with BT providing access to the likes of TalkTalk and Sky on a wholesale basis through Openreach.

However these companies argue that BT’s dominant position has given it an unfair advantage and that its poor record in repairing faults to the network stifles innovation. They want to be able to lay their own fibre and control BT cables when connecting customers.

BT fibre access

packetfrontAccording to the Financial Times, the two companies and Hull-based service provider Kcom have sent a “strongly worded letter” arguing that any change in regulation would reduce returns on existing investments and remove any incentive to spend more money on their networks.

BT also argues that allowing more people to access the physical network to conduct repairs would actually cause more service faults.

The company confirmed to TechWeekEurope that it sent the letter to the communications regulator and dismisses claims the business broadband market is anti-competitive.

“The UK has a vibrant wholesale business connectivity market, with strong competition and innovation amongst a large number of providers,” said a company spokesperson. “In fact, Ofcom’s latest data [published on 8 October] clearly shows growing competition, which if anything supports the case for further deregulation.

Opposition

“We believe that forcing Openreach to offer access to its ducts or dark fibre would increase costs and add extra complexity to way UK businesses are served. Regarding service, Openreach is voluntarily publishing our service performance and this reflects our commitment to improving service.”

Ofcom recently announced plans to launch the first major communications review in ten years, with many speculating whether it would separate BT and Openreach in light of the former’s pending acquisition of BT. The regulator has already stated that BT must maintain a minimum margin for its consumer broadband products.

Virgin Media has been a vocal opponent of further regulation in the superfast broadband market. It recently announced a £3 billion expansion to its cable network and said it would not welcome any intervention that might impede the rollout.

“With £3 billion of additional private investment, millions more homes and businesses will soon be able to benefit for the first time from ultrafast broadband thanks to Virgin Media,” said a spokesperson. “A stable and proportionate regulatory environment is a pre-requisite for ensuring continued investment.”

What do you know about fibre broadband? Take our quiz!

Read also :