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

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

Fibre optic broadband is now widely available in the UK (Getty Images)

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. Nowthat money will be given to small businesses in the form of vouchers to pay forinstalling faster broadband.

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

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

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

"The aim is to provide the step change in connectivitythat is needed for the UK to remain competitive in the 21st century digitalmarketplace. As part of that we are determined that the voucher scheme shouldgenerate maximum competition amongst ISPs to provide the connectivity solutionsthat businesses need." One part of the scheme will remain intact however, with new public wi-fihotspots to be set up across the country aiming to reach three million people.

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

Malcolm Corbett from the Independent Networks Co-operative Association said: "The voucher scheme could be useful, but it will notcreate the sort of transformational digital infrastructure that ministers andthe cities wanted and that our economy needs."

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