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UK Councils Seek Cheap 10Mbps Broadband Tariff for Low Income Users

Thursday, October 20th, 2016 (7:42 am) - Score 1,235

The Local Government Association, which supports councils from all over England and Wales, has called for the proposed 10Mbps broadband Universal Service Obligation (USO) to include a subsidised “social tariff” so that those who are unemployed or on low incomes can get an affordable service.

The importance of affordability was also reflected in the Government’s March 2016 USO consultation (here), which noted: “The rationale of a USO is to act as a ‘safety net’ where market forces alone do not deliver affordable access to basic services for people, particularly those in remote areas or those with low incomes or disabilities. USOs aim to ensure that a minimum set of communications services are available to everyone at a fixed location, upon reasonable request, and at an affordable price, irrespective of where they live, in order to prevent social exclusion.”

One of the key strands of the existing legally-binding USO is the requirement on BT and KCOM (Hull) to ensure that all customers can afford to obtain and retain a telephone service, which must be able to support “functional internet access” (i.e. slow dialup speeds). This includes provisions for those who might otherwise struggle to afford such a service.

On BT this tariff is called BT Basic, which costs just £15.30 every 3 months for line rental and that comes with a quarterly call allowance (users get up to 60 mins of free weekend calls to 0845 and 0870 numbers). This can optionally be taken with a special 10GB capped ADSL broadband service and, with BT Basic line rental included, the total cost is £29.85 every 3 months.

Under the existing USO suppliers are not forced to offer the cut price broadband option. However the LGA wants to see this measure being extended from line rental and made to apply to the 10Mbps broadband service so that people, on any USO approved supplier, can take a “subsidised broadband service should they face undue hardship in paying a market rate.

Mark Hawthorne, Chairman of the LGA’s People and Places Board, said:

“Good digital connectivity is a vital element of everyday life for residents and can help them cut household bills, shop online for cheaper goods, stay in touch with distant relatives, access their bank accounts and even run their own businesses.

As central and local government services become more digital, the USO will need to provide faster and more reliable speeds and, for our most vulnerable residents, a subsided connection at an affordable price.

The quality of digital connectivity can be markedly different from area to area with some households being able to access superfast broadband speeds whilst others can only achieve substantially less. Councils want to see a social tariff enabling all people to be able to access a subsidised broadband service.”

Some form of subsidised connection looks highly likely, although it’s worth pointing out that the broadband side of Internet connectivity is already a very low margins business where making a profit can be hard. The move to adopt all-inclusive-pricing (broadband and line rental combined) may also create an additional complication when setting such tariffs, although it also makes it easier to communicate to consumers via simplified prices.

As usual there’s bound to be plenty of complexity around this point, such as the question how big the usage allowance must be and whether or not Traffic Management measures should be applied in any way, shape or form. Social tariffs are generally only designed to support basic needs, rather than deliver everything you could want.

No doubt others would perhaps argue that there are already plenty of cheap broadband options around and as such the social tariff should remain tied to the line rental side, but that rather assumes that the only way a USO can be delivered is via fixed lines. The Government are currently considering all of the options, such as satellite, fixed wireless access, Mobile Broadband (3G / 4G) and pure fibre optic ISPs, almost none of which come attached to a traditional copper line.

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By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
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9 Responses
  1. wirelesspacman says:

    “and as such the social tariff should remain tied to the line rental side”

    I might be wrong, but I think that the existing social tariff would not allow you to “add on” broadband from another supplier – really on the grounds that it goes beyond basic needs etc.

    1. Mark Jackson says:

      So far as I’m aware if you have BT Basic line rental then you can take ADSL2+ based broadband from another ISP, so long as the broadband provider doesn’t need you to take their own phone service. I’ve also heard of people with BT Basic for line rental and Plusnet’s “fibre” (FTTC) for broadband.

    2. Steve Jones says:

      That is indeed the case. The argument has always been that if you can afford an expensive add-on to the social tariff, then you really shouldn’t be qualified to have the social tariff in the first place. The system used to be gamed in several ways (it was common to use the scheme on second homes). There are a number of checks and qualifiers, such as the customer being on some form of benefit, but they aren’t foolproof. There’s also the issue that a 10GB cap might be fine for functional Internet use for email, shopping, accessing government services and so on, but the sort of services that might be used on a 10mbps service, such as video streaming, are going to eat that up very quickly.

      In any event, the bit in the article that talks about the move to inclusive pricing being an issue is simply not under this model.

      nb. there will be an interesting issue should BT Retail be legally split from OR and that is where USOs like this will fall in future are there surely won’t be any case for landing the responsibility on BT Retail alone (for that matter, I think they also have to run phoneboxes and a few other things).

    3. Steve Jones says:

      Perhaps I was thinking about the old BT Light User scheme which I seem to recall did have restrictions.

    4. timeless says:

      Mark is indeed correct, l was at one point a BT Basic customer, and l was able to use broadband through it..

      there was limitations in credit on the landline part of the package, but the main limitation with regards to internet connectivity was that you were limited to only BT based services, any you couldnt use an ISP that took control of your phone line..

      and on that note if you decided to switch you have to remove BT Basic first because it blocks providers from taking over the line until you move to a normal package.

    5. cyclope says:

      I some time ago asked BT about their BT basic and Broadband FTTC from another provider, i was told that is is allowed , and why shouldn’t it be? If you consider that a customer may have been made redundant recently or retired they may be still in an existing contract for the FTTC the line rental for many is seen as a rip off

  2. DTMark says:

    Isn’t the solution for broadband potentially a mobile broadband dongle.. I don’t think I’ve ever seen less than 10 down 20 up on 4G anywhere.

    I thought we’d reached and moved beyond the tipping point, and that if it’s “phone” you want, you’re better off with a mobile than a landline anyway (call set up charges, line rental etc.)

    1. Chris P says:

      @DTMark
      i agree, i can get a sim only contract for £5 per month with 500mb data and at least 250 mins of calls with free calls to 0800 numbers. cheapest line rental is ~£17 and only freephone numbers or local weekend calls are free.

      i’ve heard of health organisations giving free mobiles phones to vulnerable people so they can reach or track them if need be, at £5 per month its cheaper than sending people out to look for them.

    2. timeless says:

      actually having been with BT Basic myself before, from what l remember the line rental was £14 every three months which included £4 credit per month.. which l didnt use as l only needed an internet connection.

      things may have changed since however because lm quoting my experiences from a good 4 or so years ago.

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