Virgin Media in plea to modify internet fund

AN OVERHAUL of the government’s multi-million pound superfast broadband initiative could be on the cards under Maria Miller, the new culture secretary.

Virgin Media is today writing to Miller with a list of recommendations for the government’s criticised £150m urban broadband fund – which was set up by George Osborne to boost internet speeds for small businesses – ahead of Wednesday’s Autumn Statement.

The money is currently earmarked for building new city networks that could compete with commercial ones from the likes of Virgin Media and BT, but industry sources say that in her short tenure so far, Miller has been more open than her predecessor, Jeremy Hunt, to consider industry input on how else to spend the money.

Virgin Media’s recommendations include challenging authorities that want to spend the money to prove that there is un-met demand for superfast networks, and using the cash to teach businesses about how to improve speeds, rather than building new networks. The company claims that, rather than there being a lack of broadband capacity in some urban areas, small businesses not being aware of the technology that allows them to use networks to their full potential is a bigger obstacle.

The recommendations follow a recent meeting between Virgin Media and communications minister Ed Vaizey, described by insiders as productive. Individuals at the company believe that while it is too late to affect the Autumn Statement, it may be able to influence government policy in future.

Plans to build new urban networks are a challenge to the likes of Virgin Media, creating additional competition.

BT and Virgin Media are taking legal action against Birmingham City Council over using the first £10m of the fund to build a network they say would compete with their own.

A spokesperson for Virgin Media said: “The funding of super connected cities needs a major overhaul if the government is to help drive small business growth and unlock the promised revenue and productivity benefits. Public funds should be focused on where they’re needed most, investing in skills, access and training to drive usage and enable small businesses to take full advantage of existing next generation networks.”