Ofcom and BT Adopt Changes to Help 10Mbps Broadband USO
Ofcom has today finalized the changes that were first confirmed in July to improve how BT handles delivery of the UK’s Universal Service Obligation (USO), which aims to bring faster broadband ISP speeds to those who can’t yet receive a 10Mbps+ capable download speed and aren’t planned to do so in the near future.
We’ve already covered this topic and the changes extensively before (summary), so on this occasion, we’ll just cut right to the chase. In short, some of those who applied to request a USO connection from BT have faced a number of problems with poor communication, unreliable cost quotes, and others were also asked to pay materially higher amounts than they should have been (e.g. some of those who initially requested the USO were footing a big chunk of the bill for everybody else).
Back in May 2021, BT revealed that they’d moved to improve their processes and communication. Furthermore, they also introduced a new cost-sharing “option” for their USO quotes (here), which enabled communities to “crowdfund and share the excess cost of a broadband network upgrade“ (preferable to lumping all the costs onto the first accepted quotes/homes).
In addition, if more than 70% of premises in a cluster register their interest, a contribution of an “additional £3,400 per premise” was included, thus lowering the excess costs that a community might have to pay (it’s very tricky to get this kind of thing right). On top of that, the 4G solution that BT shipped in response to most other USO requests was upgraded to include unlimited data (some people can also get an external antenna installed, if necessary).
Ofcom’s proposals in July largely put what BT had already done – to improve how the costs of USO connections are calculated and or shared between properties – into the rules. But it also made a few other clarifications and changes too, which have today been formally adopted.
The regulator recognized that BT had agreed to change its approach for quotes where the cost of connecting a property is not significantly above the £3,400 threshold. BT also agreed to refund affected customers and re-issue quotes it has previously provided.
Crucially, this won’t solve all of the much more complicated underlying problems with areas that are simply far too expensive to resolve via the USO (e.g. some people have been quoted hundreds of thousands, even millions of pounds). At a certain point, the value for money side goes well out of the window and keeps on running.
Like it or not, the cost of deploying Fibre-to-the-Premises (FTTP) infrastructure into some extremely remote rural areas can be insane, which is an unavoidable reality. Such barriers cannot easily be swept aside by good intentions or small tweaks. Indeed, in some cases, it would literally be cheaper to build somebody a new house, in a better-connected area, than to run a new fibre line.
Nevertheless, the changes that BT and Ofcom have made should still result in a number of customers receiving lower quotes in the future. Meanwhile, the Government’s £5bn Project Gigabit program has similarly warned that those in the final 0.3% would be prohibitively expensive to reach (here) and they’re consulting on how to solve this (we expect new wireless networks and LEO satellites to be options).
On the other hand, BT may find the new approach to be quite challenging. Likewise, there is a risk that the new approach to shared costs could cause some confusion for those who apply for the USO after the fiber has been run down a street or lane, following the first customer request (i.e. some of those who apply later might not realize that they still have to pay their share of the USO cost for delivery, which could be hefty).
Ultimately, time will tell how much of a difference this makes, and Ofcom has pledged to continue monitoring BT in order to ensure that the original concerns are addressed.
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