Feeds

BT and Virgin sue over £10m state-funded Birmingham broadband

Telcos: 'New broadband service is a dangerous precedent'

Beginner's guide to SSL certificates

BT and Virgin Media have thrown another legal block in front of a £10m investment in Birmingham's broadband infrastructure.

The two telcos are dragging Birmingham City Council back to the European Commission by challenging a decision to allow the City council to improve broadband pipes. It means that the £10m investment plan in Birmingham's broadband will be delayed, if not dropped.

Virgin and BT allege that that public money will skew the private market and undercut their own investment in Birmingham.

The £10m that the council planned to plough into Birmingham's broadband comes from a £150m pot that George Osborne set aside to fund broadband in 20 cities across the UK, part of his "super-connected cities" initiative. In Birmingham the cash was intended in particular to help small biz in the Digbeth, Eastside and The Jewellery Quarter areas of the city by providing them with affordable high speed broadband.

Birmingham City Council accused BT and Virgin Media of standing in the way of 1,000 new jobs and an estimated £200m yearly benefit that the service would create.

Councillor James McKay said he was "extremely disappointed" by Virgin's new lawsuit, because the Council had consulted extensively with VM to prove that the market alone couldn't provide the service:

The city has worked in a very positive and collaborative way with them over the last few years to help inform and develop our business case and we are surprised that they have now chosen to appeal at such a late stage.

We developed a robust State Aid case, based heavily on evidence that Virgin Media and others provided to us that clearly demonstrates a strong market failure.

BT said that the decision to allow government money into a private market is "substantially flawed":

It would have discouraged commercial investment in high speed networks at precisely the time when such investment is required. It would also have set a dangerous precedent. We hope an alternative solution can be found as soon as possible so that companies such as BT can invest further in Britain’s cities.

Virgin Media spokespeople argued that the planned investment was being made in the wrong place:

We fully support the Urban Broadband Fund and government ambitions to bring superfast broadband to areas not currently served by existing fibre networks. So it’s disappointing that Birmingham City Council has put forward a scheme which is not in the interests of local people and we believe, as a result, the European Commission has made a decision based on inaccurate and misleading information which could waste public money.

Birmingham Council got the go-ahead from the EC last month, the challenge by BT and Virgin was decided last week and has come to light today.

The ruling could affect other cities in line for a broadband handout - including Belfast, Manchester and Bristol. ®

Intelligent flash storage arrays

More from The Register

next story
Consumers agree to give up first-born child for free Wi-Fi – survey
This Herod network's ace – but crap reception in bullrushes
TEEN RAMPAGE: Kids in iPhone 6 'Will it bend' YouTube 'prank'
iPhones bent in Norwich? As if the place wasn't weird enough
Crouching tiger, FAST ASLEEP dragon: Smugglers can't shift iPhone 6s
China's grey market reports 'sluggish' sales of Apple mobe
Sea-Me-We 5 construction starts
New sub cable to go live 2016
EE coughs to BROKEN data usage metrics BLUNDER that short-changes customers
Carrier apologises for 'inflated' measurements cockup
Comcast: Help, help, FCC. Netflix and pals are EXTORTIONISTS
The others guys are being mean so therefore ... monopoly all good, yeah?
Surprise: if you work from home you need the Internet
Buffer-rage sends Aussies out to experience road rage
EE buys 58 Phones 4u stores for £2.5m after picking over carcass
Operator says it will safeguard 359 jobs, plans lick of paint
prev story

Whitepapers

A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.