UPD BT Make Use of 2Mb USC Subsidy to Rollout Rural FTTC Broadband

Earlier this year we reported on how people in the Cheshire village of Ollerton were ready to pay BTOpenreach £35,000 to get a “fibre broadband” (FTTC/P) service installed (here). Today we learn that BT has made use of the Government’s 2Mbps rural USC subsidy to help pay for the roll-out.

So far the Government’s £60m Universal Service Commitment (USC) linked ‘Better Broadband Subsidy Scheme’, which was revealed at the end of 2015 (here) and aims to help an estimated 300,000 premises that might not benefit from the Broadband Delivery UK roll-out of “superfast broadband” (24Mbps+) services, has tended to only be used by alternative network providers (fixed wireless and Satellite etc).

Broadly it offers grants worth up to around £350 to areas where broadband speeds tend to be slower than 2Mbps and these are designed to help reduce the initial cost of having a faster broadband connection installed, although uptake has been low.

However today BT has confirmed that they too have been able to harness the subsidy in order to bring their ‘up to’ 80Mbps capable Fibre-to-the-Cabinet (FTTC) technology to 65 houses in the rural community around School Lane (Ollerton). Funnily enough BT was originally intended to be the main recipient of the USC, before the Government tweaked its approach to be more technology neutral.

Apparently the entire cost of bringing FTTC to residents in and around School Lane has been covered by the scheme and Openreach’s investment.

George Osborne, MP for Tatton, said:

“As your local MP, I fight for every community here in Cheshire – no matter how large or small. I’ve been working hard with local residents in Ollerton and BT to find a way to get superfast broadband to the village. That’s because this broadband is essential to modern life – and I don’t want Cheshire to miss out. Far from Ollerton missing out, it has become the very first village in the country to benefit from this new national scheme that the government I was part of set up. That’s great news and I hope it’s just a start in connecting up the most rural parts of Cheshire.”

Bill Murphy, BT’s MD for NGA Broadband, said:

“We have been working closely with the people of Ollerton and the Government to agree this new funding solution to bring superfast fibre to the local community and it’s fabulous news that the contract has now been signed. This is a significant first for our Community Fibre programme and we’re keen to have conversations with other communities who might be able to benefit from this approach.”

One challenge with the USC fund has always been with the idea that £60m would be enough to deliver 2Mbps+ via fixed lines to every property in the United Kingdom, which is partly why Satellite was initially favoured as the quick-fix of choice.

However the legally-binding 10Mbps Universal Service Obligation (USO) is likely to make the USC less relevant in the near future and so the Government appears to be opening up the fund to a wider range of connectivity solutions, including BT’s traditionally more expensive fixed line FTTC/P approaches.

It will be interesting to see how many communities follow Ollerton’s lead and what BT’s rivals will think about today’s news.

UPDATE 8th November 2016

A similar subsidy deal has just been struck with BT for 200 homes in the town of Bishopbriggs, which makes it the first one in Scotland to benefit from the USC linked scheme and also the 150th contract to be signed as part of BT’s UK-wide Community Fibre Partnerships programme. We expect many more to follow, but obviously won’t be reporting on all of them.