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UPDATE BT and Gov Propose £600m 10Mbps Broadband USO Universal Service

Sunday, July 30th, 2017 (8:18 am) - Score 5,177

After a lot of negotiation the Government and BT have today proposed a deal that could see the operator fund a new Universal Service Obligation (USO), which will aim to ensure that everybody can request a broadband download speed of at least 10Mbps by 2020. Now for the caveats.

At present fixed line “superfast broadband” (24Mbps+) connections are already estimated to cover around 93% of homes and businesses in the United Kingdom and the Government’s Broadband Delivery UK programme predicts that this could reach 97% by 2020, which leaves around 3% of premises in predominantly rural areas (plus some disadvantaged urban spots) to suffer from slow connectivity; this is where the USO will focus.

Catering for the final 3% by delivering universal fixed line coverage of “superfast broadband” would be hugely expensive (the BSG estimated up to £1.4bn) and so the cash-strapped Government initially proposed a slower Universal Service Obligation (USO) to fill the gap, which pledged to provide an “affordable” connection that can deliver Internet speeds of at least 10Mbps (estimated to cost anything from £180m and up to £1bn).

The proposal was a significant step up from the current USO, which is delivered exclusively via fixed lines and only requires KCOM (Hull only) or BT (Openreach) to deliver, following the “reasonable request of any End-user” (i.e. demand-led), a telephone service that includes the ability to offer “data rates that are sufficient to permit functional internet access” (here); this was such a low bar that even slow dial-up lines could hit it.

The new rule forms part of the Government’s Digital Economy Act 2017 and we’ve included an extract from that below.

DEAct 2017 Extract

(2A) The provision made under subsection (1) is referred to as “the universal service order”.

(2B) The universal service order may in particular say that broadband connections and services must be provided to any extent, but may not do so unless—

—— (a) it specifies the minimum download speed that must be provided by those connections and services, and

—— (b) the speed so specified is at least 10 megabits per second.

(2C) The universal service order may contain—

—— (a) guidance about matters relating to the speed or other characteristics of broadband connections or services that it says must be provided (as well as or, except in the case of the minimum download speed, instead of setting out any of those characteristics); and

—— (b) guidance about any other matters relating to those connections or services.

Oddly the Government has chosen Sunday to launch a major consultation on the USO design, which is perhaps a reaction to yesterday’s cross-party Broadbad 2.0 report from Grant Shapps MP (here). As part of today’s announcement the Government has also confirmed that BT have offered to voluntarily fund the 10Mbps USO and the operator claims this would involve an estimated investment of £450m – £600m (depending on the final technology solution).

The new USO would be considered a minimum performance level that BT, upon request from an end-user, must deliver (i.e. most properties will get much faster speeds than 10Mbps). BT proposes that they would fund this investment and recover its costs through the charges for products providing access to its local access networks, albeit only if Ofcom factors this in when setting future regulation (i.e. Ofcom’s plan to cut the cost of Openreach’s 40Mbps [10Mbps upload] FTTC product (here) may need to be softened).

Gavin Patterson, BT’s CEO, said:

“We are pleased to make a voluntary offer to deliver the Government’s goal for universal broadband access at minimum speeds of 10Mbps.

This would involve an estimated investment of £450m – £600m depending on the final technology solution.

This investment will reinforce the UK’s status as the leading digital economy in the G20. We already expect 95% of homes and businesses to have access to superfast broadband speeds of 24Mbps or faster by the end of 2017. Our latest initiative aims to ensure that all UK premises can get faster broadband, even in the hardest to reach parts of the UK.”

BT is expected to reach most of those in the final 3% by using their modified Fibre-to-the-Cabinet (FTTC / VDSL2) technology, which is called Long Reach VDSL (details here, here and here); this would be sold like normal FTTC packages via ISPs. Other technology solutions like FTTP, FTTrN, WTTC and G.fast may also have a role to play.

Openreach has previously indicated that LR-VDSL could enable their “fibre broadband” network to cover 99%+ of homes in the United Kingdom by the end of 2020 (i.e. the 99% figure is likely to support speeds of 24Mbps+), but that would still leave a question mark over the final 1% and this is where the deal includes a few caveats.

The USO Caveats

* BT expects to complete the build of this fixed network by either December 2021 or December 2022 depending on the mix of technologies used, some of which are subject to trial and industry consultation. This is obviously later than the 2020 date and so a few changes are required (see below).

* BT plans to launch the fixed wireless broadband service so that the UK will have 10Mbps coverage to around 99% by the end of 2020. Fixed wireless will be made available at an affordable price for hard to reach premises. At this stage it’s unclear whether BT will harness EE’s 4G network for this (makes the most sense) or adopt a different approach, such as White Space wireless (they trialled it some years ago).

* The expectation is that around 0.3% of UK premises will still be un-served by a 10Mbps fixed line USO come 2022 and so inferior Satellite technology will be used to cater for these, which is unlikely to go down well with those affected.

* All of these technologies will come with quality standards and requirements to minimise delays from contention and latency, although sadly upload speeds would only be required to deliver a minimum performance of 1Mbps and that is already starting to look very slow by modern standards.

* The Government also appears to be considering data cap of at least 100GB per month for their USO (Ofcom’s data from 2016 suggested that the average broadband connection already uses 153GB and this will no doubt be a lot higher by 2020).

The other catch is that Openreach’s LR-VDSL technology works best when older ADSL broadband services are disabled, which complicates the roll-out because ISPs then need to be convinced to play ball and vested interests can make that tricky. Encouraging consumers to swap from ADSL to LR-VDSL lines could also be made more difficult if Ofcom is required to soften their proposal for a cheaper 40Mbps FTTC tier (see our earlier comment).

On the upside the new deal won’t require the Government to commit any additional public investment towards the USO and they won’t need to force a complicated industry levy upon fixed line connections, which are already suffering under a weight of new regulations and associated implementation costs.

However the Government are keen to stress that they have yet to make a decision on whether or not to adopt BT’s “voluntary” USO proposal or enforce one of their own and they promise to “work with BT to develop its proposal over the coming months,” which suggests that they have yet to reach full agreement on some details (this may be a reference to the demands that BT are making of Ofcom and / or other issues).

Karen Bradley MP, UK Culture Secretary, said:

“The government is taking action to ensure that people everywhere in the UK can get a decent broadband connection as soon as possible. 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.”

We should point out that what the Government are proposing broadly appears to reflect Scenario 2 in Ofcom’s earlier USO cost analysis (here). The cost of serving the most expensive premises is estimated to be around £45,000 in all three of their scenarios and as a result Ofcom suggested that a Reasonable Cost Threshold (RCT) be introduced “to limit the upper bound of the costs“.

The Government’s consultation notes that the final USO proposal will include a cost threshold of £3,400 per premise. We note that the existing USO, which only caters for basic copper telephone lines, already has a cost threshold of £3,400 but this should not be used as a comparison because, as the Broadband Stakeholders Group said, “the benefits derived from network use for voice and for broadband are different.”

Whatever the decision, the Government has confirmed that in all cases they will expect that “costs should be met by industry through a cost- sharing mechanism which will be established by Ofcom once the specification for the USO has been set in secondary legislation.” The cost threshold will also support demand aggregation, which means that several home owners could demand the USO and the cost threshold would have to adapt (rise) accordingly (this creates more flexibility to deploy better infrastructure).

The new USO is also expected to include a review clause, which would enable the performance level to be revised in the future as networks improve. At this point it’s worth remembering that USO’s are intended to define the minimum level of service, not a maximum. Critics of today’s proposal will no doubt call for a faster minimum than 10Mbps (Labour and the Liberal Democrats both wanted a 30Mbps USO), although this would cost significantly more.

The closing date for responses is 9th October 2017.

UPDATE 31st July 2017 (8am)

We’ve had a few emails asking (i.e. raising concern) about a related report in one of the newspapers, which suggests that broadband bills could rise by £20 if the proposed USO were introduced. However the figure of £20 appears to be an oversimplification with regards to how the cost of BT’s USO might be apportioned or managed and it doesn’t consider a time-scale for balancing that cost.

Assuming the figure of £20 is even correct (looks like a rough guesstimate) then it’s obviously not a monthly increase and instead the cost is more likely to be recouped over a number of years, which could easily be conducted via one-off setup fees for new services or smaller increases / changes in any number of different areas at wholesale.

By the sounds of it BT appear to be using their proposal as more of a bargaining chip to reduce the expected impact from some of Ofcom’s recent proposals, such as the forthcoming reduction (charge control) to 40Mbps FTTC prices at wholesale (see above). Assuming the regulator were to compromise then it’s conceivable that end-users may not see any increase above the usual level of annual price rises.

UPDATE 31st July 2017 (11:01am)

The Country Land and Business Association, which represents 30,000+ land owners and rural businesses from across England and Wales, has vowed to fight any attempt to water down the USO by BT and the Government. However so far the USO is still in a design stage and so technically nothing has been watered down, yet.

Ross Murray, CLA President, said:

“We will fight any attempt to water down the hard won legal right to broadband for rural homes and businesses. For too long, rural areas have been at the back of the queue when it comes to investment in infrastructure and that is why this legal principle is not something to compromise on.

The Universal Service Obligation is necessary because it creates an inalienable right that can be enforced by the premise owner. It cannot be replaced by a cosy deal with just one company allowing it to deliver connection how it sees fit.

Accountability for delivering the rollout of broadband has been a closed shop discussion between the industry and the regulator for too long. It is this that the USO would end, making the consumer the enforcer. It’s no wonder BT Group doesn’t want that.”

The CLA suggests that the USO “cannot be replaced by a cosy deal with just one company allowing it to deliver connection how it sees fit.” On the other hand Ofcom’s earlier consultation found that nobody else (ISPs) wanted to take on the financial and legal responsibility of a USO and indeed Openreach controls the biggest national network, so there isn’t a magic multi-operator fix for this one.

On top of that the USO deal proposed by BT probably wouldn’t cover the Hull area of East Yorkshire, where we’d expect KCOM to continue holding responsibility unless Openreach plan to over-build their network.

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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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50 Responses
  1. Patrick Cosgrove says:

    I wonder where that leaves fixed wireless networks. Will they hold up in the face of BT’s creeping roll-out? What about the large FW contracts that are just starting up? Which would consumers choose – 10Mb fixed line with BT and poor service or 30 Mb FW but a bit more prone to disruption e.g. weather

    1. Mark Jackson says:

      Fixed Wireless operators do need to keep pace with changing demands too, nobody in this market can ever afford to sit still. So if BT pushes superslow areas to at least 10Mbps then those wireless providers can’t afford to sit still and will need to offer something significantly faster and more flexible. Many are already doing this.

  2. Peter says:

    Interesting effect this would have on places like mine.
    BT/BDUK did not upgrade any of the 3 village cabinets.
    Gigaclear came in and provided the superfast service instead.
    BT have done nothing to improve their service so its all still on ADSL2…..but you wont get 10Mbps out of it due to distance: more like 5 or 6.

    So under the proposed USO by 2020 it looks like BT will be forced to fix this area’s telephone line based broadband…..for the few people still using BT broadband rather than Gigaclear.

    1. Gadget says:

      I would not get your hope up – if you already have access to the Gigaclear service I’d suspect that you would not be covered for a USO service, but the devil will be in any agreement’s detail

    2. Lee says:

      I doubt it.

      As long as there’s a choice of a connection that is over 10meg then no one would be forced to do anything.

    3. 125uS says:

      Only if those people demand a 10Mbps service from BT I think – I read it as saying you have the right to ask for and be provided with a 10M service, but that having one isn’t mandatory.

      If no-one orders one, why would a supplier install the kit to do it?

  3. Rick dawson says:

    “Broadbad 2.0”

    nice typo

    1. Rick dawson says:

      hah… just followed the link and found that is purposely spelled that way… :O

  4. Ultraspeedy says:

    Satellite and Wireless is not the solution, even if you can deliver that to the most remote location you can not provided it to a building if it is listed without listed building consent. Which clearly states permission is needed for any antenna, depending on the building and its listed cat. that can be as good as impossible to get.

    Similar goes for buildings in a heritage or conservation site. Different permission needed but still need permission first. Buildings even in an area of significant heritage will be denied.

    RE-VDSL is not the answer either, one of the stories in the link show a property still with less that 10Mb after RE-VDSL.

    FTTP will do it but obviously that for how little is going to be spent is not going to be serving many if any. Same for G.Fast.

    FTTrN could do it, IF BT change their mind and run it to the pole and not a sidepod on a cabinet still 1000’s of metres away from the rural property.

    All in all pretty weak. It reads like ‘oh no the time is here, we have run out of time to plan and think about this properly so lets just throw some crap together and hope for the best’.

    A shame really, this was a good opportunity for our government and BT to show many countries what can be done when you put in the effort and thought.

  5. NGA for all says:

    The Government USO thinking reads well, it may need to find a way to prioritise future proofed solutions over interim solutions but that should be do-able within the way it is outlined.
    In-sufficient discussion on just far the remaining £500m, +underspends (£200m) + LA investment account balances (?) + BT Capital Deferral (£463m) will go but that can be improved.

    Where can we see this BT £600m offer? Is this the money they already owe or is it new money on top? BDUK rural last quarter was only £25m of effort, so there is years of effort already tied up in the capital deferral owed.

    There is a real gap emerging between rural as in BDUK/GOV and the ambition in the Ofcom WLA consultation which unless it is re-consulted kicks any uplift in FTTP into a post 2021 market review. Even if addressed the resource issue will be the biggest stumbling block.

    1. Steve Jones says:

      The capital deferral is simply what BT have set asides in the books for grant money that they expect to repay to BDUK projects (hopefully for reinvestment by those local projects).

      It can’t be spent twice. It’s already earmarked.

    2. NGA for all says:

      Steve, Only £130m has been released and not all of this has been contracted, so there is another £330m stuck in theory till 2023, + underspends and investment account balances which the latter includes any BT capital outstanding. We saw reference to £400k in Leicestershire.

      If the £300-£600m is new money, then this should be made public. £600m across 1.5m remaining customers is £400 each. Amazing and fantastic if true, given BT FTTC contributions at most if handed over is about £75-£80 per premise passed.

      How do we correlate what is now a BDUK programme of £25m of BT receipts a quarter with the vast sums owed and being referenced. Their appears a fundamental gap in the resource to deliver against the funds available to provide a comprehensive fix.

    3. Steve Jones says:


      It’s irrelevant how much of that money been released to date as that’s wholly down to the rate at which BDUK projects decide to reinvest and place contracts which, necessarily, involves some planning. The money has to be paid back at some point in the future and that’s why it’s deferred. It simply can’t be used for something else. Indeed it’s on the books as a liability, not an asset.

      Your claims get ever more bizarre.

    4. Steve Jones says:

      I should also add that your statement that BT has only contributed about £80 per BDUK enabled line would, at around 4.5m superfast enabled lines, mean about £350m. That’s clearly nuts as the deferrals alone amount to £100 per customer and is hence now booked as BT expenditure (to balance out the liability).

      The actual numbers are confidential, but what we do know is that OR capital expenditure has actually risen as BDUK has proceeded even as the commercial roll-out came to an end.

      So just how you come up with a figure of £75-80, I’ve no idea, but it looks like extremely dodgy guesswork to support your own particular narrative. If you have evidence, might I suggest (yet again) that you present it to your MP to get the NAO to investigate. It is, after all, their job.

    5. NGA for all says:

      Steve, you cannot divorce BT’s commitment to do 100% FoD in Wales (PAC WALES Sept 2016), the Scots plan for 100% coverage which is well funded and the £150m now allocated to finish the job in Northern Ireland.

      What is bizarre is OR evidence to Ofcom (Vol 1 WLA) showing by 2013 their commercial had peaked and accumulated to £1bn.

      So this notion of £600m for the final 2-5% needs should be subject to public scrutiny.

    6. NGA for all says:

      Steve, you have already accepted BT’s investment of £1.5bn (not £2.5bn) and Ofcom point to 18.5m passed which £80 per premise passed. So what is the mystery?
      Given the flow of £1bn in subsidies so far, it is likely that the BT ‘investment’ will need to be tapered in at the end of phase 1 and 2 or lodged in the investment account, and we have seen some of this in Leicestershire. BT capital contribution certainly was not used or needed to deliver phase 1.

      Phase 2 contracts take to 95% ish so all that deferral, underspends and any capital balances can be applied to the remaining problem.

      In this context, this BT offer of £600m needs explaining.

    7. Steve Jones says:


      So where have I said that OR have invested just £1.3bn on BB (by which I mean the GEA-FTTC & GEA-FTTP product sets). I certainly don’t recall quoting any such figure. Perhaps you can supply a link. I’d certainly be interested to know when I was rash enough to make such a statement.

      If I was to hazard a guess myself, then I would suspect that the OR investment to date on the GEA product set (including their part of the BDUK capex) is going to be more like £3.5bn over about eight years. That’s also roughly in line with third party estimates.

    8. NGA for all says:

      Steve, I am not going to dig out the discourse such as it is, but’s OR response Vol2 to WLA consultation references a accumulated capital of c£1bn by 2012/13. BT have pointed to 47,000 cabinets, the rest are subsidised apart from capacity cabs. It has been mostly £1bn of public expenditure since then. There is no public audited record yet of BT contribution but it may be appearing in the investment account balances or increased reported underspends.

      It is more essential the nature of this £600m offer is understood, particularly as the quarterly effort on BDUK is now £25m worth. (last qtr as per BTplc gross state aid receipts)

    9. Steve Jones says:


      The total net grant funding on BT’s books, for the period 2012-17 totals £600m. The amount deferred is now £446m. That £446m is now a recognised future liability and, as is noted in the accounts, this deferral is offset by a corresponding capex increase (which increases BT’s total capital invested by exactly the right amount to balance the recognition of a liability).

      So the net public subsidy to the end of 2017 is £600m, not £1bn, albeit that £600m will increase should the local BDUK projects decide to reinvest it rather than withdraw the funds at the end of the contract period. That £600m net amounts to about £130 per property passed at SF speeds).

      A reasonable interpretation of that £446m is that it is (in effect) currently treated as a loan rather than a grant, until such time as it is either reinvested (in which case it’s back to being grant money) or it is recovered by the project. I also seem to recall that gainshare fund is meant to earn interest, but that may only be at the contractual review periods and not BT’s accelerated process. In any event, interest rates are rather low so that’s a relatively small adjustment.

      This is the (net) grant recognised in the last 5 years in BT’s books.

      Net Grant
      2016-17 £ 28
      2015-16 £109
      2014-15 £378
      2013-14 £126
      2012-13 £ 15

      So those figures previously quoted by various Parliamentary bodies that BT has received £1.78bn of public funding are way off (even if the

      However, it seems to me that there’s a fairly large sum available for reinvestment by BDUK as there isn’t only the gainshare money recognised, there is underspend due to savings and, very probably more gainshare to come over what is already recognised.

      As far as the whether the quoted USO £600m is all new money or not, it hardly matters. The USO would be a legal requirement to provide that minimum service (subject to cost caps) and as it would involve no public money, then it’s not particularly important what the amount would be. BT (or OR) would be obliged to fund it.

      If BDUK does eventually get the UK to 97% superfast coverage and another 1% or so would be able to hit 10mbps from enabled cabinets (and it will be more with LR-VDSL) then the number of properties below 10mbps might be as few as 500,000.

    10. Steve Jones says:

      I lost a minus sign – the 2016-17 period should have read -£28m (negative, as the increased deferral exceeded the gross grant received for the period).

    11. NGA for all says:

      Steve, but BT has received £1bn in funding and benefitted from that cash flow.

    12. Steve Jones says:


      Do you have trouble understanding accounts? Yes, BT have received about £1bn of funding, but only £600m is recognised as grant money. The remaining £465m is being treated for accounting purposes as a loan which has to be paid back (it’s on the books as a liability). BT’s capex contribution has increased by £465m to match that recognition.

      Now, in reality the great majority, if not all, that £465m will be re-invested on BDUK extensions (several announcements made) and it will return to the books as grant money. However, that’s not guaranteed and for accounting purposes as of the end the 2016-17 period, only £600m of subsidy is recognised.

      So the figure remains – there has been £600m of grant money and (in accounting terms) a £456m “loan” until such time as it is reinvested or recovered.

      In particular, those 4.5m BDUK premises passed with SF capability have received £600m in subsidy. The rest of it is sitting in a type of virtual escrow account until reinvested or repayed.

  6. alonso says:

    Satellite guaranteeing you which are the most difficult to reach 10Mb, unless….

    1 there is a tree or other obstruction in the way of where the dish needs to point
    2 nerds say it will spoil the building
    3 there is nowhere to mount the dish on the side of your property or land which points to the satellite without complicated permission seeking
    4 you live up on high ground subject to gale force winds on a near daily basis at times in the year and a satellite even when firmly mounted will move (or more like have a vibrating/oscillating effect moving around by as little as a few millimetres back and forth) during the gales leading to a connection which cuts in and out, similar to what happens to satellite TV in the same areas.
    5 Connection rates vary to the satellite on an hourly basis

    Perfect! Great thinking as usual. Problem sooooooo solved now (sarcasm off)

    1. …and what many people forget about satellite is the latency, the time taken for the signal to go from your house to a geostationary satellite about 36,000km above the equator and back down to a satellite earth station. This latency knocks out many applications and severely disrupts real-time bi-directional applications such as Skype and video conferencing.

  7. Ultraspeedy says:

    “At this stage it’s unclear whether BT will harness EE’s 4G network for this (makes the most sense) or adopt a different approach, such as White Space wireless (they trialled it some years ago).”

    Assuming this is correct, which it should be as they do detailed mapping for many countries and networks…
    Then good luck is all i can say to the 4G will solve it idea.

    “The expectation is that around 0.3% of UK premises will still be un-served by a 10Mbps fixed line USO come 2022 and so inferior Satellite technology will be used to cater for these, which is unlikely to go down well with those affected.”

    I have just thought about satellite solution a bit more..

    Do BT have a satellite product currently for internet? If they do could a BT expert link to more details about it as personally im not aware of the product and it would be interesting to read costs and capability.

    If they do not then i wonder will they lease in some manner from another organisation or less likely be launching their own satellite well before 2022 to ensure its ready to provide?

    Is there even any satellite solution that allows the touted 100GB a month?

    So many questions. Or rather unanswered questions from the government and BT. Hopefully it will not be the last minute things/plans are explained in more detail (though obviously it will be).

  8. Max360 says:

    I currently only get 5Mb via my ADSL line. Does that mean, I would be able to get 10Mb or more by 2020?

    1. Steve Jones says:

      The implication is that, if the BT offer is accepted, BT would have to provide a service capable of 10mbps available subject to a cost cap of £3,400 (to BT that is). It does not mean that they can make and ADSL line work at that speed. If you are on an FTTC enabled cabinet, that might mean making use of LR-VDSL.

      There also seems to be talk of possible fixed wireless options.

      There will be a long tail of awkward legacy issues, like EO lines, many of which would require expensive line re-arrangement exercises, new cabinets being built, FTTP solutions and so on. However, the devil is in the detail. However, one thing that can be ruled out is making existing ADSL services run faster.

    2. Alan says:

      Do BT have a satellite option available, if not how are they going to provide that option?

    3. Steve Jones says:

      The solution is as yet undefined, but it is highly unlikely to be satellite. There are a whole range of options from full fibre, to new cabinets, to enabling existing ones to network re-alignment and so on. Fixed wireless is also (apparently) an option. I’m not a network planner, but presumably there will be a process which will asses the situation and solutions and, especially, if there are a number of nearby properties with the same issues. Unfortunately single remote properties are the least likely to get solutions which fit within the proposed cost-cap of £3,400 per property.

    4. Alan says:

      But the USO caveats state…
      The expectation is that around 0.3% of UK premises will still be un-served by a 10Mbps fixed line USO come 2022 and so inferior Satellite technology will be used to cater for these, which is unlikely to go down well with those affected.

  9. Gary says:

    Most likely not, These timescales will slide further out, same as the Scottish last 5% ones have.

    My BB has dropped from an almost 2meg connection and usable even for online gaming to on average a 1meg synch and unusable for all but email and laggy web surfing over the last 5 years so I don’t see it getting better anytime soon.. ie in the next 2.5 years.

  10. DevOps says:

    Like I have said in previous posts, BS10 7NE and surrounding postcodes are only on 2MB connection with no indications from BT or Openreach that we will be upgraded at all. So this minimum speed seems unlikely to happen in my oppion. BT have also raised my bill to around £35 per month for this shocking service and an exit fee to find something cheaper is over £400 so I’m told by BT. I should have never placed an order as I would have been better off with using messages on a pigeons foot!

    1. TheFacts says:

      You should be asking why the South Gloucestershire scheme has missed you out.

    2. fastman says:

      developer built around homes on copper only — requested voice only your community could co fund this cab with openreach relatively reasonably especially if conversations took place with the business locally

  11. Began says:

    Rural NI resident here, stuck on 1mb… just wondering how this “investment” by BT will sit/conflict with the governments promise of £150m toward NI broadband development as part of the DUP/Tory deal? Should the £150m in itself achieve the USO requirement in NI, if not even faster?

    1. NGA for all says:

      The £150m is more than enough to agree a means to deliver FTTP to those not benefitting from >30Mbps or >24Mpbs – some 70-80k NI properties.
      Work to date, some 1,800 subsidised cabinets and some 12,000+ FTTP connections (to 2018) will be delivered using £64m of subsidies.
      This £600m offer from BT needs to treated with some caution as the £2.5bn became £1.5bn, and the 2/3 commercial coverage was less than 50% in Northern Ireland – 1,200 cabs.

      BT currently owe Gov some £464m in the form of capital deferral for rural, so the nature of this £600m needs to be understood. There are also underspends and investment account balances. See D.Simpson(DUP) and M Ritchie(SDLP) active in the last EFRA select committee (March 2016) on this matter batting for NI customers.

  12. New_Londoner says:

    Mike, rather than repeatedly posting essentially the same thing against multiple stories on multiple sites, can you please just finish and submit your long-overdue document with your analysis to the relevant authorities so that they can investigate.

    In my view your analysis is deeply flawed, exhibits a fundamental misunderstanding of accounting, contracts, public spending, networks etc. However you clearly feel strongly that the many sets of auditors have all missed something. It is pointless and frankly irritating to keep regurgitating the same thing at the drop of a hat.

    In short, I think it’s high time you either put up …

    1. NGA for all says:

      Several submissions in with Ofcom and audits will keep coming. I apologise for the irritation but many in rural will feel even more irritated when so much money is in BT’s accounts which was set aside for a more complete upgrade. There is substance to every number and this latest play on the USO is another episode.

      Perhaps you can reconcile the new offer of £600m with the monies owed back to BT UK.

    2. New_Londoner says:

      There is no need to reconcile monies from unrelated contracts with any commercial investment. If monies are owed then they are due to the contracting party in each case, can’t be spent elsewhere – both contract law and state aid rules would prevent this from happening. So there is no need to reconcile these two unrelated items.

      By asking the question it suggests a lack of understanding of the subject. No criticism intended in that, but it highlights the nativity of your analysis and flawed conclusions that flow from it.

      And it is wrong to suggest that there is substance behind each of your numbers. Many you’ve shared previously are built on many assumptions so are really estimates and guesswork, often undermined by you lack of subject matter knowledge.

      Sorry to be blunt but I think you’re wrong. Regardless of that though, why not wait to lsee what the authorities conclude rather than repeatedly posting misleading comments on this and other sites? I’d rather find out what other people think, read things that are broadly on topic.

    3. NGA for all says:

      Yes I am afraid there is a need to challenge. Monies are owed which were intended for coverage and denied to rural communities are now resting in BT’s accounts some until 2023. This should not now be subject to another round of PR without a clarification and reconciliation being provided.
      LA and central Gov are compelled to accept some of the nonsense as this all they have to work with.
      If your casting aspirations, can you please reference the numbers you are challenging and I will provide the references that now exist in the public domain.

    4. Steve Jones says:


      The deferral money is, of course, sitting on BT’s accounts, but it cannot be used until the local BDUK project decide whether to reinvest it or wait until the contract period is up and reclaim the balance. BT simply can’t pre-empt whatever the local BDUK project (and their political masters) have decided to do. They might, for instance, priorities business parks over residential, or tackle the true not-spots first, or maybe go for the most properties at the least costs approach. So that money is there to extend coverage as you say, but it can only happen by due process involving the local BDUK projects.

      Apart from the deferral money (which is essentially an accelerated gainshare), there is nothing owing, short of a systemic error or fraud which, given there are auditors, an Oxera and NAO reports, doesn’t seem very likely.

    5. New_Londoner says:

      Agree with your comments, would add that the local authorities may decide to spend the money on social care, schools or libraries rather than on broadband. That’s partly why I think Mike’s comments that the monies he believes are owed might simply be recycled to fund the USO is nonsense, contracts don’t give the supplier the ability to do that. Well, not unless the client is totally incompetent!

      No casting aspersions, just reminding you that you’ve previously confirmed your methodology relies on your own estimates and extrapolations. That being the case, there is a fair margin of error in your workings.

      Where numbers are more certain, your main weaknesses are understanding accounting practices and not making allowances for items such as the operating costs through the life of each contract. Both points have been made multiple times by various posters here and on other sites.

      I’m not intending this to read like I’m trolling you, I’m just politely suggesting that you let those people with better knowledge and access to data investigate your assertions. In the meantime, repeatedly posting them is getting boring, is misleading others and often diverts discussion way off topic.

      Ultimately it’s your call (plus the various admins on each site). Will leave it at that.

    6. Steve Jones says:


      So is the suspected Mike in question, Mike Keily, who in 2013 was claiming that BT had inflated the cost of cabinets to between £61,814 and £80,278 and that amounted to a per cabinet subsidy of “of about £47,596”? (I love the caveat “about” for a figure quoted to 5 significant figures.)


      This is wildly at odds with the per-cabinet costs that BT quoted to a cross-party inquiry on British broadband in March 2016 where an average of £27,500 was quoted. Even if, as I suspect, that the net cost to the BDUK projects, and not the all-in cost with BT contributions, then that’s still a big difference from about £47,000 subsidy.


      If it was an all-in figure then it is, of course, a fraction of the Mike Keily numbers. However, I doubt it as that surely is a commercially sensitive cost whilst the net cost per cabinet to the public purse really ought not to be.

      It would be nice to have some summarised figures on all the BDUK projects (including the Scottish and Welsh projects) specifying the number of cabinets enabled as well as FTTP lines. It wouldn’t be perfect, but it would allow for some more informed estimates. Unfortunately BDUK don’t seem to collate such stats in a readily available public form.

    7. Gadget says:

      Steve I seem to remember that at one Accounts Committee hearing BT (I think it was Sean Williams) stated that as the contracts specified that BT could only charge the same rates as it does for the other rollouts That made the costs commercially confidential.

    8. NGA for all says:

      New_L, Steve, good blagging and the story has improved for the taxpayer and will continue to do so. If the totality of the funds within the process was appreciated (underspends, investment account balances and the capital deferral), the ambition ought not be limited by the shortcomings of LR-VDSL. The offer being made should be published, and why investing £600m now (£400 a customer for 1.5m customers) is somehow consistent with the NAO identified £358m for c4.2m phase 1 customers. With the underspends it unlikely the £358m was used to plan phase 1.
      It is boring but so is the constant effort to deny parts of the UK the full potential of upgraded connectivity by continually gaming costs and capital.

    9. Steve Jones says:


      The outlines of the offer have been published, and £600m figure has been mentioned, but, and this is very, very important, it is not an offer to spend a defined amount of money on network investment. It’s an offer (within the cost cap of £3,400 per properrty) to accept a Universal Service Obligation. Just what the solution will be in each case is another matter. Where every customer might be is another. Much of this will depend on the gap left after BDUK finally finishes (which will support much

      So that £600m is mentioned as an estimate, and probably intended so that Ofcom take into account expected levels of cross-subsidy in calculating regulated prices for the GEA product set.

      I think by the time BDUK winds down, the percentage of properties unable to reach 10mbps will be a substantially less than 1.5m. If BDUK does reach a 97% SF coverage figure (which looks attainable if underspend and current and future gainshare) that leaves only about 800,000 properties. Then there are those properties (like my mother’s house) just outside the SF area for FTTC, but still able to get over 10mbps. I’m sure that would reduce the gap to perhaps 2%. If LR-VDSL is selectively enabled, that will reduce the gap even more. That could easily reduce down to less than half a million properties (albeit particularly expensive to deal with).

      A 20mbps USO would change things again, but that isn’t the offer on the table.

      So you should view the offer as one to accept a USO of 10mbps subject to defined cost caveats and not one for a fixed sum of money. The amount of money required to facilitate a USO is open ended in that respect.

    10. NGA for all says:

      Steve.. Your final comment is helpful and insightful. An even more constructive approach would be the cost of supporting a demand led fibre on demand (GPON) service as already promised in Wales over a variety of timeframes using all the funds available, new funds and the balances that exist. More full fibre as opposed to more copper gain is more likely to allow for more flexibility on cost recovery.

    11. NGA for all says:

      N-L and Steve, It is the imposition of limits which I find a little galling. Upload on LR-VDSL makes it look very tactical – almost unusable for anyone wishing to upload. Fibre is the one infrastructure where nature allows more for less, a very special case. While BT will always struggle with this where it does have total control, it does show that Pubic funding can be used to force a breakthrough. The relative cheapness of the BDUK effort to date should not be now be contained by copper gain based proposals, but use the underspends/clawback to regain an ambition for more and full fibre.

      I fully confess to being a little sensitive on this point as the original funding (£1.7bn) was estimating the need for in-fill at double digit % for FTTP on top of 30,000-35,000 cabinets This remains outstanding, hence the budgets and underspends.

    12. New_Londoner says:

      “the original funding (£1.7bn) was estimating the need for in-fill at double digit % for FTTP on top of 30,000-35,000 cabinets”

      I think that sentence encapsulates at least part of the problem. The BDUK funding was to deliver 24Mbps+ download speeds to a specified number of premises. It was buying coverage not a network technology. That it has been done at less cost than expected is a good thing.

      Whether the underspend is reinvested in more coverage is a matter for each of the local authorities, the days of spending up to the available budget irrespective of value for money considerations are thankfully long gone. Remember this is our tax money, there are plenty of other demands on local authorities, broadband is important but plenty of other things are too.

    13. NGA for all says:

      New-L The only significance of more than 24Mbps, is that it was not ADSL2 it was pushing fibre deep as possible as far as possible. Re-read the goals and the comments of Williams(BT) and the then Perm Sec Sir Jonathan at the 2013 PAC.
      It did not include the diversion of perhaps 1/3 of Phase 1 funds for urban in-fill. This can be recovered and goals met if the ambition is there. The contracts were always a minimum not a maximum. The maximum was to be dictated by the funds available.
      We can begin to see this as the USO-B numbers shrink. Hopefully the UK can aim to do better and spend the money available on the network as intended.
      Better Broadband is relatively cheap way of contributing to delivering better care services if we use the connectivity. Ditto for re-generation. Perhaps it is better it is paid by subsidies so prices can be kept low.

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