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Virgin Media monopoly 'increasingly anomalous'

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Sky has called on the government and regulators to open up Virgin Media's infrastructure to competitors, claiming it will speed roll-out of high speed broadband services.

In its response to Lord Carter's interim Digital Britain Report, Sky said it was "increasingly anomalous" that the cable network is closed to competition while BT's infrastructure is not.

In particular, Sky said the physical ducts should be opened up to allow other firms to lay fibre while avoiding the massive civil engineering costs of digging new trenches. "It would offer the opportunity for competition between end-to-end infrastructure with all of the benefits in terms of innovation and differentiation that this type of competition typically brings," it wrote.

Sky has made a big impact in the ISP market since it bought Easynet in 2005. It now has almost two million subscribers, and all its domestic broadband customers also subscribe to satellite TV services.

In its Digital Britain response, Sky also said regulators should look at compelling Virgin Media to offer wholesale broadband services via its own fibre. "If there is concern over the lack of retail competition leading to slow take-up, then introducing competition on that network is a solution that should be explored," Sky said.

Today Virgin Media told The Register it is not necessarily opposed to the idea of creating a wholesale cable market, but that it was not a priority. "It's something we're cognisant of, but we're focussed on developing our own products at the moment," a spokesman said.

Virgin Media recently launched an up to 50Mbit/s service, the UK's fastest mass market broadband offering.

Ofcom has been broadly supportive of the idea of duct sharing, and is examining the details of how it might work. Regulators have in the past however rejected calls for a wholesale cable broadband market. Last year they said Virgin Media lacked the market power that prompted the enforced separation of BT in 2002.

BT meanwhile will this year begin to deploy fibre to the cabinet, capable of speeds of about 40Mbit/s. It plans its first commercial products based on the technology in London and Wales next year, with 40 per cent of the UK scheduled to be covered by 2012.

Sky cautioned Lord Carter against public subsidies to speed national roll out. "While commercial companies are testing the economics of NGA, there is a real danger that the deployment of public money could distort incentives and be wasted funding investments that would otherwise shortly be made by the private sector," it wrote.

At the launch of the Digital Britain Review, Lord Carter appeared to reject the findings of the earlier Caio Review on the economics of next generation internet access. Last year former Cabel and Wireless chief Francesco Caio came out against any public money for fibre deployments. But Carter said he plans to reexamine the possibility and report back later this year.

Sky's lobbying to the Digital Britain Review has been published here. ®

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