BT, Virgin unhappy with EC decision to give Birmingham broadband funding

Move could hurt culture minister’s decision to roll out superfast broadband across the country

BT and Virgin Media have asked the European Commission to rethink its decision to give Birmingham £10 million of government money to invest in the city’s broadband infrastructure as part of a move to become one of the country’s 10 ‘super-connected cities’, fearing that this will impact investment in their commercial rollouts.

According to a BT spokesman: “This is an unusual step for us to take but we believe the decision was substantially flawed. It would have discouraged commercial investment in high speed networks at precisely the time when such investment is required.”

Sir Albert Bore, leader of Birmingham City Council had hoped that the money would “put Birmingham at the forefront of the race to deliver public services in new and innovative ‘Smart’ ways.”

This move could potentially hurt culture minister Maria Miller’s decision to roll out superfast broadband quickly across the country – the government wants to have the best broadband network in Europe by 2015, and has committed a minimum of £830 million up until 2015 to support the rollout.

Research has shown that the UK has the lowest penetration of fibre-to-the-home in Europe and a report from the House of Lords Communications Committee is sceptical of the government’s success in increasing competition in the broadband marketplace, which has seen a number of ISPs pull out of the bidding process, with only BT winning public funds.

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