BT and Virgin Media obstruct government plans for 'ultrafast' broadband

Creation of 22 "super-connected" cities stutters after legal objection from telecoms

A government scheme to provide superfast broadband to 22 cities is under fire after the Independent Networks Co-operative Association described changes to the plan as ‘watering down’ its content.

The scheme has been recently championed by George Osborne, who pledged £150m to create 22 “super-connected” cities across the country. Now that money will be given to small businesses in the form of vouchers to pay for installing faster broadband.

The change has come about after Virgin Media and BT lodged legal objections. The two telecoms companies complained that Birmingham City Council (one of the first cities to make plans for the allotted money) would be unfairly threatening their businesses if it went ahead with installing a proposed 100+ Mbps fibre optic network.

The original plans had promised to reach 1.7 million households and 200,000 premises by 2015. Now there will be £90m worth of vouchers available to companies with less than 250 employees, though the promised speeds of these upgrades will only be “over 30Mbps”, far less than in the original plans.

"The voucher will work with the market, will be technology neutral and therefore put the choice of connectivity into the hands of the businesses that can benefit from them,” said culture minister Ed Vaizey.

"The aim is to provide the step change in connectivity that is needed for the UK to remain competitive in the 21st century digital marketplace. As part of that we are determined that the voucher scheme should generate maximum competition amongst ISPs to provide the connectivity solutions that businesses need."

One part of the scheme will remain intact however, with new public wi-fi hotspots to be set up across the country aiming to reach three million people.

Both BT and Virgin Media both welcomed the changes with Virgin commenting that "where companies are already investing in world-class connections, government has recognised public money should not be used to build more networks.”

Malcolm Corbett from the Independent Networks Co-operative Association said: "The voucher scheme could be useful, but it will not create the sort of transformational digital infrastructure that ministers and the cities wanted and that our economy needs."

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