Outgoing Virgin Media boss Neil Berkett has spoken out against “clumsy” government intervention in the rollout of high-speed broadband, warning that it could prove detrimental to competition.
Berkett, who is due to step down from Virgin Media in the coming months when Liberty Global closes its planned buyout of the UK operator, used a keynote speech at Cable Congress to warn that though politicians may be tempted to write cheques to speed up broadband rollout, this “can often do more harm that it will good.”
“Few disagree that even in times of austerity, and perhaps particularly in this tough economic period, that investment and infrastructure is a wise thing to do,” said Berkett, admitting that there was a case for helping to connect rural communities and for investing in digital infrastructure, which he called “a 21st century essential.”
However, he added that “the closer you get to areas where genuine competition exists, the more you risk even a modest amount of public money scaring off the investors all together.
“Any cable company should be comfortable with the idea of competing. But the point at which those competitors enjoy help from the tax payer is the point at which our investors become less confident and the investment in our infrastructure disappears,” he said.
In a pointed attack at the UK government, which alongside its commitment to bring high speed broadband to rural communities has pledged £150m for an Urban Broadband Fund to create ‘super-connected cities’, Berkett said: “Don’t focus on short-term projects or areas where the market is already delivering. Instead, do more to boost the long-term skill and capabilities necessary to ensure businesses take advantages of the opportunities of the digital age.”
He added that “competitive markets in big infrastructure-heavy businesses such as ours, are difficult to build and actually easy to break.”
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