Government launches consultation for universal service obligation for broadband but it might not be needed if BT alternative is accepted
BT has offered to deliver minimum speeds of 10Mbps to 99 percent of the UK as part of the government’s plans to introduce a ‘universal service obligation’ (USO) that would allow anyone in the UK to demand a certain standard of connectivity.
A consultation for the USO has just been launched by the Department for Digital, Culture, Media and Sport (DCMS), which will discuss the technology, specification and providers used, as well as the funding model and how the USO would be reviewed over time to ensure it is still relevant.
The consultation proposes legislation – one to enshrine the principle of a USO and another to increase the minimum speed over time. The House of Lords had wanted a 30Mbps minimum but dropped these demands so the Digital Economy Bill could be rushed through before the General Election last month.
Under BT’s proposals, Openreach will extend coverage using a mixture of fibre to the cabinet (FTTC), fibre to the premise (FTTP) and fixed wireless access (FWA) technologies so 99 percent of the UK has access to 10Mbps by 2020. It is however likely most will enjoy significantly higher speeds.
“This investment will reinforce the UK’s status as the leading digital economy in the G20. We already expect 95 percent of homes and businesses to have access to superfast broadband speeds of 24Mbps or faster by the end of 2017,” said BT CEO Gavin Patterson. “Our latest initiative aims to ensure that all UK premises can get faster broadband, even in the hardest to reach parts of the UK.
The advantages of BT’s plan are obvious. It would be a ‘proactive’ rather than ‘reactive’ rollout and BT would fund it entirely to the tune of between £400 million and £600 million. This means it would be faster than a regulatory approach and at no cost to the taxpayer.
However Openreach would recoup the cost by providing services and access to other providers and wants this to be considered as part of Ofcom’s ongoing Wholesale Local Access Review. This review will demand Openreach lower the cost of network access to BT’s rivals in exchange for looser regulation.
Silicon understands any deal with BT would be legally binding, although it could take the place of USO legislation, meaning it is unclear if there would be a mechanism to increase it in the future.
The government will now consider both options – a USO and BT’s voluntary agreement – and stresses no decision has been made.
“The government is taking action to ensure that people everywhere in the UK can get a decent broadband connection as soon as possible,” said Culture Secretary Karen Bradley. “We warmly welcome BT’s offer and now will look at whether this or a regulatory approach works better for homes and businesses.
“Whichever of the two approaches we go with in the end, the driving force behind our decision making will be making sure we get the best deal for consumers.”