Monday, September 19, 2016

Virgin Media Makes the Best Argument for Openreach Separation, as it Opposes Separation

Image result for cable telco internet speeds
source: FCC National Broadband Plan
Sometimes competitors line up on the same side of an argument. Often, the issue is what that means.

Consider that Virgin Media supports Openreach remaining integrated with BT, even while other customers of Openreach want the business completely separated.

There is a straightforward reason why Virgin Media, which operates on it own infrastructure, might support BT keeping Openreach, the unit of BT that supplies wholesale Internet access to other Internet service providers.

And that reason tends to support the arguments for full separation of Openreach from BT. Simply, Virgin Media apparently believes BT keeping Openreach will limit the wholesale unit’s investments in faster speeds, which benefits Virgin Media.

Already the leader in consumer access speeds, Virgin Media apparently believes a separated Openreach will invest faster in access speeds used by virtually all other ISPs in the United Kingdom.

And that would allow all those competitors to better position their offers in relationship to Virgin Media, which has been the market leader in terms of speed for several years.

Oddly enough, Virgin Media’s support of keeping BT Openreach part of BT supports the notion that full separation would lead to more investment in faster speeds by the access wholesaler.

In the U.S. market, where cable operators lead the market in terms of subscriber share and access speeds, the leadership in speed has been clear for more than a decade.

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