State aid challenge to Birmingham over ultrafast broadband roll-out
Birmingham City Council is pressing the European Commission to treat a legal challenge to its superfast broadband scheme as a test case.
The Council has responded with extreme disappointment to the news that BT and Virgin Media have appealed against a state aid ruling which allowed the city to develop its own ultrafast infrastructure.
In June this year the council reported that it had “been given the green-light from Europe to invest £10 million to bring ultrafast broadband to the city as part of its Smart City programme – leading to better connectivity, falling charges and faster internet speeds”. A state aid decision from the EC was needed as Birmingham was planning to intervene in the existing telecommunications market, with the collaboration of a delivery partner, and to use £10 million from the government’s Urban Broadband Fund which was announced in 2011 to help create ‘Super Connected Cities’.
Virgin Media and BT have, however, made a complaint to the Commission, arguing that the Birmingham project will overlap with their own networks.
Other cities will be watching the case with interest. Those eligible to access the Urban Broadband Fund include London, Edinburgh, Cardiff and Belfast.
Cllr James McKay, Cabinet Member for a Green, Safe and Smart city at Birmingham City Council said: “Birmingham is extremely disappointed in Virgin Media’s decision to appeal this landmark ruling.
“The city has worked in a very positive and collaborative way with them over the last few years to help inform and develop our business case and we are surprised that they have now chosen to appeal at such a late stage.
“We developed a robust state aid case, based heavily on evidence that Virgin Media and others provided to us that clearly demonstrates a strong market failure.
“We have proven that it is an imperfect market and have presented to the Commission a case that the majority of SMEs in Digbeth, Eastside and The Jewellery Quarter areas cannot receive affordable high speed broadband.” The challenge has the potential to “damage the creation of 1,000 new jobs”, added Cllr McKay.
Neasa MacErlean
