Written evidence submitted by Virgin Media (DCS0093)

Virgin Media is delighted to respond to the House of Commons Scottish Affairs Select Committee inquiry into Digital Connectivity.

This response seeks to answer the questions posed by the inquiry, setting out Virgin Media’s views on what can best help Scotland maximise the benefits of better connectivity.

1. Summary of Virgin Media and investment in Scotland

Virgin Media has a strong presence in Scotland, employing 1,700 people, and passing one million premises with our ultrafast broadband, phone line and television services across the country. Virgin Media has invested significantly in Scotland in recent years and, due in part to the positive relationship we have formed with the Scottish Government and Scottish Local Authorities, have committed to further investment.

Project Lightning will see Virgin Media build to thousands more homes and businesses across the country, growing our network significantly and building on the current rollout in areas such as Ayrshire, Edinburgh, Fife, Glasgow, Midlothian, West Lothian and smaller communities such as Kirknewton, Kilmacolm, Houston and Bridge of Weir. This completely privately funded investment will connect thousands more homes and businesses to our ultrafast fibre optic broadband network, bringing real choice to consumers and enabling residents and businesses to access speeds which are eight times faster than the UK average. 

Virgin Media’s infrastructure is completely separate to that of Openreach and the other providers which provide retail services over that copper-based infrastructure (such as TalkTalk, Sky and Plusnet). At present, our Hybrid Fibre Coaxial (HFC) network combines optical fibre (to the street cabinet) and coaxial cable (to the home or business), powered by DOCSIS 3 technology to offer superior speeds and reliability.

Our ultrafast network permits Virgin Media to offer the fastest widely available speeds in Scotland, of 300mbps for residents and 350mps for small businesses. This enables residents to connect to the digital economy and businesses to reach their potential by delivering better, more efficient and more visible products and services, with greater capacity.

2. Importance of better digital connectivity

Virgin Media believes that ultrafast broadband and the increased digital connectivity it brings can act as a real catalyst for economic growth. Our investment alone is expected to boost the UK economy by £8 billion (GVA) and will create 6,000 new direct jobs, including 1,000 new apprentices. Ultrafast broadband is increasingly becoming critical for business growth as reinforced by recent reports from the Confederation of British Industry (CBI), Institute of Directors (IoD) and Federation of Small Businesses (FSB); broadband is vital to help businesses to start up, market and promote their products and services, increase exportability and drive productivity and growth, as well as for areas to attract investors.

A Virgin Media Business report published in January 2016 revealed that small businesses said slow internet speeds were their biggest time waster and that if businesses can take advantage of the digital age, this could add £92bn to the UK economy. Virgin Media provides unrivalled connectivity through a dedicated 1GB SME proposition in major city centres to support the growth of tech clusters in multi-tenanted buildings, including, most recently, in Glasgow.

We believe the power of connectivity can be a positive force, making good things happen for people, communities and society. Better broadband has a significant social impact; increasing job prospects for young people and those socially excluded (a study by O2 found that businesses are rating digital skills on a par with business development abilities), raising skills levels, promoting learning (many schools now rely upon good connectivity for lessons and lesson planning) and joining residents and communities together. 

Furthermore, the rollout of ultrafast broadband has been shown to reduce social and digital exclusion, boosting digital participation and the ability of residents to access pubic services and shop online to reduce bills and access the digital economy. Today broadband is a key decision when moving home; 2016 research found that one in five of us sort out broadband before water supply and two thirds have not bought a house because of poor broadband.

In its 2015 Digital Communications Review, Ofcom held infrastructure competition as the gold standard for telecommunications regulation and set an objective of achieving competition between three or more networks in around 40% of the UK.

“The best driver for investment and innovation is network based competition: and this is at the heart of our future strategy. We believe competition between different networks (including those built from scratch or built using duct and poles owned by others) is the best way to drive investment in high quality, innovative services for consumers.”

Virgin Media whole-heartedly supported this strategic priority. There is a compelling body of academic opinion and empirical evidence that demonstrates how competition between independent networks produces the following effects.

Firstly, the incumbent is forced to respond to investments by new entrants in superior technology with its own network upgrades; on average, incumbents invest 8% more of their revenues on network upgrade where there is strong cable penetration and BT’s FTTC, G.Fast and FTTP upgrade programmes have each followed advances in technology, coverage and speed by Virgin Media. Secondly, competition fosters greater penetration of high speed services; there is a strong correlation between the presence of cable infrastructure and both the presence of VDSL and increased broadband access speeds. Furthermore, Solon Consultancy finds that, in Western European markets, superfast penetration is on average 30% higher where the cable operator has greater than 20% market share[1]. By contrast, research has found that “intra-platform competition” across the incumbent platform alone (for instance, local loop unbundling in the UK), has no discernible impact on overall broadband penetration[2].

3. Summary

We fully support the aims of the Scotland Digital Strategy and the ambitious targets set for rollout. We believe the best way to achieve this is through stimulating the market to invest, lowering barriers to entry, exploring innovative collaborative solutions with the private sector and then intervening in those areas of true market failure.

We strongly welcome the view of the Digital Strategy that such public intervention “is likely to have a different focus in future” with an “’outside-in’ approach” that prioritises “future public investment on our hardest to reach rural areas,” while encouraging “commercial suppliers to address remaining gaps in urban Scotland.” We would encourage the Scottish Government to go further and help maximise investment by the private sector by removing obstacles to network rollout and working with across a number of areas, including;

• Delivering ambitious wayleaves reform to ensure that landowners cannot hold back infrastructure deployment by demanding ransom payments;
• Encouraging local authorities to work flexibly with infrastructure investors on conditions on the ground, particularly on our innovative narrow trenching technique that allows us to deploy fibre further, faster and with less disruption;
• Ensure that no further regulatory hurdles, in terms of extended guarantee periods for our work, are put in place as these will negatively impact future investment;
• Ensuring ultrafast connectivity and competition is a key requirement for new developments through the planning system, particularly the Planning Bill;
• Working with the market to remove any other barriers to deployment and to explore innovative mechanisms, such as government investment in trunk routes and community-led solutions

All of these actions can create a supportive investment environment to help drive further digital infrastructure rollout in Scotland, boost digital participation and, as the Digital Strategy explains, realise “Scotland’s full potential in a digital world.”

4. Answers to the questions posted by the inquiry

1. What level and standard of mobile and broadband coverage does Scotland need to achieve to maximise the economic and social benefits of greater connectivity? To what extent do current plans for the rollout of broadband and mobile coverage in Scotland meet those needs?

We concur with the Scottish Government’s ambition that everyone should be entitled to a good level of broadband coverage; we think that networks which are capable of delivering ultrafast speeds offer the best opportunity to future proof Scotland’s economy and strengthen its reputation as a place to invest, live, work, learn and visit. Digital contributed over £10bn to the Scottish economy last year and, with 82% of firms providing significantly more digital content than they were three years ago, the importance of an environment that supports private investment in broadband rollout is clear.

UK operators are investing in a variety of different ultrafast network architectures, including full fibre. Each of these ultrafast variants has the capacity to remain substantially ahead of mass market bandwidth demand for the foreseeable future. Frontier Economics’ recent analysis for the National Infrastructure Commission shows that the existing mixed infrastructure model - in which the capacity of ultrafast-capable networks is incrementally upgraded in parallel with new FTTP deployment - is sufficient, and arguably preferable, to support UK digital growth. The analysis finds that each of a number of future use cases for bandwidth-intensive services is met by DOCSIS and G.Fast technologies[3].

The report concludes: “based on the use cases in the moderate evolution scenario, there does not appear to be a strong demand side case to invest widely in FTTP infrastructure”. Two advantages are presented in favour of an incrementalist approach. First, additional economic output is realised more quickly than under a 100% FTTP strategy wherein existing ultrafast infrastructure is replaced. The lag resulting from a 100% FTTP strategy reduces the present value of direct economic output and cost savings by £3.3 billion[4]. Second, since broadband investment has high sunk costs and demand for higher speed services remains uncertain, the risk of over-investment is also high. Frontier observes that “there could be value in waiting for more information, even if the central case suggested there were benefits in investing now”.

Frontier’s analysis also doubts that any reliability advantage that FTTP has over copper-based networks will translate to increased value added if the UK transitions to 100% FTTP. The report notes that “a household’s experience of reliability depends on more factors than the access technology (for example…the household’s equipment, Wi-Fi interference etc)”.  This leads Frontier to assume that network reliability does not have any significant impact on the difference on the economic impact of different variants of ultrafast broadband networks. 

This is not to dismiss the case for investment in FTTP, but simply to demonstrate that policy makers’ objective of stimulating further growth in the digital economy can be supported by multiple technologies. Virgin Media has built one million premises to date under Project Lightning, with either FTTP or hybrid fibre coaxial (HFC) architecture. We expect that full fibre will constitute at least 50% of Project Lightning build.

In Virgin Media’s case, the economics of full fibre broaden the potential reach of the cable network, making it more commercially rational to invest to unserved areas, as opposed to replacing HFC in dense urban areas[5]. This is for three reasons. First, the civils’ costs of full fibre deployment can be substantially lower than deployment of HFC technology. This has resulted in FTTP rollout being cost effective where HFC build would not be viable. The most remote conurbations served by our network are connected using FTTP. Second, there are no legacy assets that would require significant investment to make compatible with FTTP technology – as is the case in areas where Virgin Media has HFC cabinets and hub sites. Third, based on current market evidence customers are not yet willing to pay a substantial premium for higher speeds. Therefore it is hard to envisage a scenario where replacement of existing coaxial assets with FTTP would be a better use of capital than serving new areas with FTTP.

Our HFC architecture operates with DOCSIS technology. The DOCSIS 3.0 standard was developed in the mid-2000s and led to dramatic increases in available bandwidth per household. Virgin Media introduced the first superfast broadband product to the UK market in 2008 and has since delivered a ten-fold increase in top-tier download speeds over the same technology[6].  As the UK’s mass market ultrafast leader, speed has undeniably played a role in attracting new customers to Virgin Media and encouraging existing customers to stay. As a result, our investment in higher speed services has stimulated a commercial response from Openreach. Ofcom summarised this effect in its Digital Communications Review Initial Conclusions, February 2016:

“…it has historically been competition from cable that has played a greater part in driving network upgrades. In the early 2000s, one of the factors that drove BT to increase the performance of its initial broadband service was the availability of cable broadband. Similarly, BT announced its rollout of superfast broadband shortly after Virgin Media’s upgrade to DOCSIS 3.0. BT’s recent announcement of G.Fast investment plans was in the context of Virgin Media offering a maximum service speed of 200Mbit/s compared to a maximum of 80Mbit/s available from Openreach for VULA.”[7]

Infrastructure competition has therefore underpinned the increase in average actual download speeds across the entire market from 5.2Mbps to 36.2Mbps since the start of the decade[8]. The same dynamics can be seen in Openreach’s commitment to deploy FTTP following Virgin Media’s announcement that at least half of Project Lightning build would be full fibre.

DOCSIS has an upgrade path to gigabit download speeds. Virgin Media has already demonstrated this in trials of the existing DOCSIS 3.0 generation and will trial the next iteration – 3.1 – in 2018. The latter will have sufficient capacity to ensure that HFC can continue to offer the same consumer proposition as our FTTP should mass market demand for gigabit download speeds emerge.

Our investment is contingent on the UK and Scottish Governments’ and Ofcom’s continued efforts to create the best environment for private investment in broadband and we feel we are working positively and constructively with the Scottish Government to stimulate and incentivise such investment in Scotland. For instance, Scotland is at the cutting edge of new innovative fibre deployment techniques, precipitating Virgin Media’s announcement in 2017 that Scotland will benefit from the first large scale rollout of ultrafast fibre broadband connected directly to homes and businesses.

With superfast coverage already available to 93.4% of Scotland’s premises, and the Universal Service Obligation of 10mbps available for the hardest to reach areas, Virgin Media sees the key contribution that policy makers can make is to lower barriers to private investment in competing broadband networks. By 2020, the existing market structure and policy framework will have delivered ultrafast broadband networks, offering speeds of 300Mbps or more, to a substantial majority of UK consumers.  In the light of the intensity of private investment, we believe that the requirement for public subsidy in order to secure comprehensive coverage of private networks is now diminished.

Approaching 17 million premises will be passed by cable infrastructure by 2020, 12 - 13 million premises will be served by Openreach’s G.Fast and FTTP[9], one million premises will be reached by Cityfibre, 350,000 premises are served today by Hyperoptic, 150,000 by Gigaclear, and 40,000 by TalkTalk. These networks will overlap with each other and with Openreach’s FTTC network and bring the benefits of choice and competition to a majority of UK consumers.

These private ultrafast investments – in aggregate amounting to more than £5 billion[10] – indicate that there is capital available for UK operators seeking to build. If market and regulatory conditions are conducive, it is highly likely that additional private investment will result in rollout substantially beyond these existing commitments:

• Virgin Media has identified an additional six million premises that are viable within broadly the same economic parameters as the business model for the current phase of Project Lightning. This would see the cable network reach 23 million premises.
• BT Openreach is consulting with its wholesale customers on plans to deliver FTTP via a Passive Optical Network (PON) to 10 million premises.
• Former CEO of TalkTalk Dido Harding stated when in post that TalkTalk could extend FTTP to 10 million premises.
• CityFibre and Vodafone’s agreement has the option to extend to five million premises by 2025 depending on the success of the first one million[11].
• Hyperoptic has outlined plans to extend its network to five million premises by 2025[12].

If these investments come to fruition, 80% or more of the UK could conceivably have access to gigabit-capable networks by the mid-2020s.

Where assumptions are made about the limits of our potential investment, the adverse consequence is the overbuild – or stymieing – of private investment by public subsidy. The types of communities we are building to in Scotland, both large conurbations and more rural areas, are clear evidence of how Virgin Media can build robust business cases in diverse areas using efficient and innovative deployment techniques, such as narrow trenching and Passive Infrastructure Access (PIA).

We are actively exploring accessing Openreach’s duct and pole network, using PIA, which can help create a better business case to reach some outlying communities.  We are also investigating the use of wireless broadband for more remote or difficult to build areas and would encourage Scottish influencers to make the case for more innovative solutions for broadband delivery for the harder to reach areas in urban Scotland.

2. What are the barriers (economic, technical, regulatory, other) to delivering superfast broadband and improved mobile coverage in Scotland? What steps could be taken to overcome these challenges?

We believe that the focus of the UK and Scottish Governments should be on removing those obstacles that are preventing the private sector from being able to rollout infrastructure quickly, efficiently and cost-effectively, and help us to build demand. We are engaging with the Scottish Government and Digital Scotland with the aim of creating the most conducive environment possible to further expand our ultrafast broadband network and play our part in ensuring Scotland reaches 100% coverage by 2021. We would like to see the Scottish Government deliver on the intent as set out in the Digital Strategy to “encourage commercial suppliers to address remaining gaps in urban Scotland” and explore solutions for harder to reach areas.

Working in partnership with central and local authorities is vital for us to ensure we are investing in the right places, minimising disruption and maximising the economic and social impact outlined above. Key steps that can be taken to boost deployment of ultrafast broadband and overcome the barriers the inquiry describes are as follows:

Roads Cooperation and reducing regulatory risks

We want to continue to work with the Scottish Government, Local Authorities, the Scottish Road Authorities and Utilities Committee (RAUC) and Scottish Road Works Commissioner (SRWC) to coordinate our deployment. This includes proactively providing infrastructure in areas with planned public realm works, negotiating noticing mechanisms and allaying any concerns around narrow trenching. We comply fully with the New Roads and Streets Works Act (NRSWA) and the associated Specification for the Reinstatement of Openings in Roads (SROR) and have put a number of recent measures in place to engage early with local authorities on our plans, increase the level of supervision on the work and collaborate more closely.

Risks to our rollout plans in this regard are both regulatory and technical; the former through the potential extension of guarantee periods above the current two year timeframe, which would harm our business model and put in jeopardy further investment in Scotland; the latter through overzealous local authorities demanding full-width reinstatement or not allowing sufficient flexibility for what is an iterative and responsive privately-funded rollout plan.

UK Government wayleave reform

A further risk to our plans is gaining approval to deploy our network across or into privately owned land. In this regard, we believe that the UK Government reform of the Electronic Communications Code has not gone far enough to address the barrier obtaining wayleave permission represents to competing infrastructure deployments. Virgin Media is required to negotiate with third party landlords and landowners to gain permission to access premises to provide a connection. The UK Government needs to address one of the challenges investors face in negotiating with third parties to stop ransom fees being demanded in return for access. 

Government could remove this critical barrier to build if it changed the basis of wayleave agreement from a requirement to negotiate on the part of the Communications Operator, to a requirement to notify. Arrangements within the water industry provide a precedent for this approach. Landowners would of course have reasonable grounds for objection and a period in which to reject the notification. The interests of the landowner could be further protected by placing limitations on Operators to place their infrastructure within the existing easement strip used for telecommunications equipment, thereby ensuring that there could be no risk of diminishing the value of the land beyond what has already been agreed to under the existing wayleave.

Wayleave agreements with local authorities and Housing Associations

A major challenge for Virgin Media is how we work with local authority estates and housing teams, and Housing Associations, to provide digital connectivity to commercial tenants and residents in social housing without being held to ransom for crossing publicly owned land through the current wayleave system; we would encourage the Scottish Government to work with local authorities and infrastructure providers to agree a common approach to wayleaves, such as a standardised toolkit or bulk wayleave agreement.

Furthermore, Virgin Media would welcome measures by Scottish Land Registry to make its data more easily accessible and cheaper to obtain. It is far behind the English model which has recently made Commercial Landlord details free to obtain. It is also far easier to obtain Private Landlord data through the English and Wales Land Registry Portal. Obtaining such data in an easy and straight forward way would certainly help to make the investment case for further investment in Scotland.

Planning policy and new developments

Virgin Media would like to see ultrafast broadband included as a key element of planning policy and Local Development Plans for new housing and commercial developments. We would welcome the opportunity to ensure that planning policy in Scotland ensures that broadband connectivity is ‘built in’. Virgin Media have signed agreements with the Scottish House Builders Federation and launched a dedicated portal for developers, including free site surveys.  Virgin Media calls on the Scottish Government to create firmer requirements on new developers to make provision for competing broadband infrastructure.

The National Planning Framework (NPF) version 3 (2014) and Scottish Planning Policy (SPP) provide insufficient direction to local authorities on the type of connectivity requirements they should set through the planning process (and instil in their Local Development Plans). Virgin Media encourages the Scottish Government to use the opportunity of the recently published Planning Bill to consider more ambitious objectives within the National Planning Framework, which might include a direction on developers to make provision for multiple competing ultrafast or FTTP networks in planning applications.

Business rates

The Valuation Office has increased Virgin Media’s business rates liability by 300% in the rating period 2017-2022. By 2021, Virgin Media will pay £150 million per annum in business rates on our existing network assets as of March 2017. Government has failed to substantially off-set this exposure in the transitional relief package made available to those in upward transition, which was much less generous than previous transition offered during periods of far less consequential revaluation. It is therefore imperative that, through the Full Fibre Relief Scheme, the UK Government takes measures that ensure that this disproportionate increase does not impact the investment case for broadband.

Unless relief is properly applied, the increase in business rates will inflate the cost of every new premises connected to our network by £25 per annum. At nearly 5% of ARPU, this materially reduces the profitability of every new customer, directly undermining Government’s stated priority of incentivising new investment in digital infrastructure. As an indication, HSBC has estimated that a similar sized reduction in ARPU – resulting from Ofcom’s proposal to reduce fibre pricing in the WLA review – would reduce the number of premises connected under Virgin Media’s 4 million premises network expansion by 550,000 premises, assuming we maintain our existing ROI.

The Scottish Government has pledged to “match the UK Government’s rates relief on certain new fibre investment, subject to confirmation of the associated detail” - Virgin Media is urging Government to change the draft regulations for relief to ensure that it has a material effect in mitigating the disincentive to invest. We argue for three things which, if Westminster does not approve, we encourage the Scottish Government to reflect in their relief scheme:

1. Amend the definition of ‘plant and machinery’. Several of the costliest assets required to support a new fibre connection are missing from the list of assets in scope for relief but are nevertheless valued by the VO under the “Receipts and Expenditure” methodology applied to Virgin Media.  The relief should apply to all assets that are required to support new fibre infrastructure installed within the ‘hereditament’ – including buildings, cabinets, power, server capacity and other assets (a proposed amendment clause is included as an Annex). There is precedent for a more comprehensive definition in existing telecoms regulation (e.g., Rating and Valuation, England - The Central Rating List (England) Regulations 2005; Valuation for Rating (Plant and Machinery) (England) Regulations 2000).

2. Extend rate relief beyond 2022. Virgin Media’s network is likely to reach 65% of UK premises by the early 2020s. Virgin Media can expand further if the right incentives exist. Other investors with less network coverage today: CityFibre, Gigaclear, Hyperoptic, will have even greater headroom to expand. Failure to make provision beyond 2022 will result in a cliff-edge effect, wherein a large body of assets will move from receiving fibre relief to no relief in a single rating year. The payback period on capital intensive fibre asset deployment is greater than five years, yet under the envisaged approach those assets would be treated as profitable from year five onwards.

3. Include all ‘last mile’ infrastructure connecting fibre to a premises in the list of assets in scope for relief. Virgin Media’s last mile is a mix of coaxial and fibre depending on local topology and the cost per premises passed of network expansion. Both technologies are capable of delivering Gigabit download speeds.

As noted above, there are multiple network architectures capable of delivering Gigabit speeds that will continue to outstrip consumer bandwidth demand for the foreseeable future. We also note that private investment in ultrafast infrastructure will go on well beyond 2022. It is therefore our view that the technical parameters of relief and the timeframe should be extended beyond 2022. The Scottish Government may find an opportunity to offer incentives through a more generous relief package than that available in England, that could in itself be a powerful pull factor for investors.

Promoting best practice

We believe that deployment works best when we share our plans early with local authorities, allowing them time to plan. Our rollout in areas such as West Lothian and Fife are good examples of close collaboration, from the original planning stage through to liaison with the Council’s roads, economic development, business, estates and communications teams, providing a supportive, positive and pragmatic environment for our investment. Furthermore, we want to collaborate with local authorities to promote what can be achieved with the speeds and technology that our network offers, from application in telehealth and telemedicine to smart cities and the Internet of Things.

This best practice also applies in terms of identifying, stimulating and aggregating areas of demand to enable us to extend our network as far as possible; including informing residents and businesses of how they can register their interest with us, raising the visibility of Virgin Media’s expansion plans and services (for residents and businesses) and linking in to Town and Community Councils. We strongly support the use of business and residential vouchers to stimulate demand to make areas become commercially viable and work closely with local government on future residential and business development plans.

3. Is the level of funding for broadband and mobile phone coverage in Scotland sufficient given the geographic and demographic challenges Scotland faces?

We believe the private sector has key role to play in helping meet the R100 targets and wider ambition to create a digital Scotland. It should be Government’s role to reduce barriers to investment and market entry, provide incentives to sway negative business cases into positive viable solutions and invest in those areas where market failure is proven.

While we have not taken public subsidy and believe that this should be targeted on areas of market failure, we do believe there is a role for Government in exploring innovative solutions that reduce costs for private networks to make commercial decisions. Government should therefore work with industry and local communities to identify, pilot and fund innovative solutions, such as installing major digital trunk networks (the main body of cost for broadband deployment) or looking at community-build models, to incentivise private providers to get to hard to reach areas and providing much needed competition.

4. How well do the different stakeholders (UK Government, the Scottish Government, service providers) work together? Are there ways these relationships should be improved?

We believe that the best way to collaborate is through talking. Therefore, there is an opportunity here to create working groups or joint fora between the main operators, industry and Government to encourage collaboration and identify solutions to both move the debate forward and ensure that the ambitious targets set by the Scottish Government can be met.

5. What technology options are available to increase connectivity in rural, and other hard to reach, areas of Scotland? What support is needed to develop and deliver these solutions?

There are a number of options which could be explored in more detail (as mentioned above) to increase connectivity to harder to reach areas. These include Passive Infrastructure Access, the use of Openreach ducts and poles, 5G drops, point to point wireless, community build, community contribution models and the installation of trunk routes which would be open to all providers to install ducting, as mentioned above.

Community contribution models may be of particular interest to the Committee. It is often uneconomical for commercial broadband providers to expand their network upgrades into more rural communities, owing to high build costs.

In the Test Valley, a rural area of Hampshire, the local community were keen that they would not be left behind, lumbered with slow internet speeds.  They galvanised community support, with local campaigning and then approached Virgin Media, asking that we consider expanding our network into the area. As Virgin Media accepts no Government subsidy, it was important that, as a business, any project undertaken was economically viable.  To build a business case, local residents invested £300 per premises for the build, with the rest provided by Virgin Media.  This make up in shortfall allowed us to draw up plans for the expansion of our superfast network, all while working closely with the local community.

The project has had phenomenal support of not only the local community, but the local business community, MP, County and Borough Councils, all with the help of community champions who promote the works locally. Work has begun at the start of 2018, with expected completion by the end of 2019.  The build will take place in 2 phases so to minimise business risk and other commercial risks to the project.

In regard to Passive Infrastructure Access, Virgin Media sees real potential to minimise our rollout costs by making use of Ofcom’s PIA remedy. Ofcom expects that the remedy will result in 500,000 premises connected by the end of 2021. We have one trial underway and two planned. Our initial trial has identified improvements that will need to be made to make the remedy operational: better Openreach planning and ordering processes (including more up to date and detailed information on ducts and a more automated ordering process), a modification to the current product specification (to allow HFC to be laid in Openreach ducts) and new regulations (to allow VM to install a ‘Toby Box,’ or Swept Tee on top of Openreach’s duct at the boundary of the premise).

Initiatives such as these, and the other forward-thinking proposals mentioned above, could be actively explored through joint working groups involving central, devolved and local government in partnership with industry.

END

February 2018