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Virgin Media vs BT: Broadband UK funds should help BT’s competition

Virgin has called on the government to use Broadband UK cash to encourage BT’s competitors in rural areas, expand public WiFi and boost 4G mobile broadband.

Virgin Media's 2010 rural telegraph poles trialAndrew Barron, Virgin Media’s chief executive, said the scheme should encourage competition to BT instead of bankrolling its upgrade.

Barron’s letter to The Guardian came a day before he was due to speak on broadband policy to the House of Lords communications committee.

“Where there is cable in Britain, the market has seen aggressive competition drive up speeds at the same time that prices have roughly halved in five years,” Barron said.

“The outcome of current government policy is likely to be the subsidy of already dominant infrastructure in areas where we are not to the sum of hundreds of millions of pounds of public money.

“If we agree competition is the best way to encourage further sustainable investment, and that embedding dominance in markets is bad for consumers, we must also accept that providing the vast majority of available public funding to an incumbent is not in the UK’s best interests.”

Barron will line up at the House of Lords alongside Steve Robertson, former chief executive of BT Openreach, and Chi Onwurah, Labour’s communications infrastructure spokesperson.

He will call on the government to target the £1.3billion earmarked for broadband expansion towards ‘areas where competition is currently limited, to promote better and, crucially, alternative infrastructures’.

He also wants a national framework for public WiFi and a push to make sure next-generation 4G mobile broadband is available in areas where there is only one broadband provider.

Barron also takes a potshot at Sky’s control of sports, film and premium TV rights, warning that a lack of choice will encourage piracy.

He adds: “People expect this and, as we’ve seen with music, when legal models don’t exist or are priced prohibitively they find other ways to get what they want, even if it’s illegal.

“There are many politically, legally and morally difficult judgments to be made around whether and to what extent the internet is to be regulated.

“We need holistic leadership from government, the courts, consumer groups and the whole industry to build clarity and consensus around all our rights and responsibilities.”

The Lords’ hearing on Broadband for the Nation will be webcast live from 3.15pm today on