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Government Detail Final 10Mbps For All UK Broadband USO Design UPDATE

Wednesday, March 28th, 2018 (12:01 am) - Score 3,433
10Mbps UK Broadband USO

As promised the Government has today set out their chosen design for the new Universal Service Obligation (USO), which pledges to give everybody in the United Kingdom the “legal right” to request a 10Mbps+ capable “high speed broadband” connection from 2020, but challenges remain.

The new measure was part of the wider Digital Economy Act 2017 and goes beyond the current USO, which is offered 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). In practice even a slow dial-up line would qualify under the existing USO.

At present around 95%+ of the UK can already order a fixed “superfast broadband” (24Mbps+) connection and by 2020 this is expected to reach around 98%, which means that the new USO will be primarily focused upon helping to cater for those in the final 2%; estimated to be somewhere around 300,000 to 500,000 premises in 2020 (or c.1 million if you were to deploy it last year).

Margot James, UK Digital Minister, said:

“In the 21st century, accessing the internet is a necessity not a luxury. We are building a Britain that is fit for the future, and we’re now putting high speed broadband on a similar footing as other essential services like water and phone lines.”

The Government believes that only a regulatory USO offers sufficient certainty and the legal enforceability that is required to ensure high speed broadband access for the whole of the UK by 2020. 95% of the UK already has access to superfast broadband, and the USO will provide a “digital safety net” for those in the most remote and hardest to reach places.”

Initially BT (Openreach) had made a voluntary proposal to invest up to £600m on delivering a softer commitment (here), although various legal threats from rival ISPs and competition concerns contributed to this option being rejected (here). However, the decision to proceed with a legally binding USO does leave the Government with some difficult questions to answer, not least with respect to funding.

Estimates from Ofcom and the BSG have noted that the 10Mbps USO could cost anything from around £200m and all the way up to £1bn (here), depending upon its design and coverage. Until now the government has only suggested that the costs could be met by industry through a cost-sharing mechanism (e.g. a small levy on subscribers), which would need to be established by Ofcom.

The 10Mbps USO Design

* A minimum download speed of at least 10Mbps (Megabits per second).

* A minimum upload speed of at least 1Mbps.

* Quality requirements for responsiveness of connections: A medium response time with end to end latency of no more than 200ms for speech applications, a maximum sharing between customers (contention ratio of 50:1) and a 100GB minimum data allowance. NOTE: Ofcom’s data revealed (here) that the average ‘mean’ broadband connection already uses 190GB of data a month (this will be even higher by 2020), but the figure drops to 84GB as a ‘median’ average and slower connections also tend to gobble less data.

* The USO can be delivered by a range of fixed line and / or wireless technologies (FTTC, FTTP, Mobile Broadband etc.).

* The USO must be funded by industry rather than public funding.

* Uniform pricing for upfront and ongoing charges. You should pay the same for the service no matter where you live in the country (e.g. rural or urban).

* A cost threshold of £3,400 per eligible property (same level as the current USO), enabling coverage to around 99.8% of premises. If a deployment costs more than this then the customer will be expected to either pay any excess costs (plus a standard connection charge), choose a Satellite service (final 0.2% of premises), try to aggregate demand (see below) or reject the offer. This is necessary to stop costs getting wildly out of control (e.g. spending £200k to connect one house up a mountain).

* A requirement for demand aggregation, so that people within an area can combine their per premise cost thresholds, to ensure that as many people who want to get connected do get connected.

* Service on request. The 10Mbps USO will adopt the same “on request” approach as the original one, which means that users who want it will need to upgrade to a relevant USO supporting service in order to benefit (note: faster services tend to cost a little more but then there’s no such thing as a free lunch). The competitive market also means that an “on request” approach is largely unavoidable.

* The Digital Economy Act included a power for the Government to direct Ofcom to review the USO at any time, after consulting the regulator, and for a specific requirement that once 75% of all premises take-up 30Mbps broadband the minimum speed would be reviewed. In practice it will be a fair few years before the USO speed is raised again.

* To help minimise the risk of overbuild and market distortion, and the imposition of costs on industry that might divert market investment and reduce competition, only premises who do not have a connection which meets the USO specification, or are unlikely to be connected under publicly funded procurements which meet the minimum specification, will be eligible to be connected.

The Government and Ofcom are now “working to put in place a number of processes to implement the USO as quickly as possible” (we believe secondary legislation will be needed), which they say includes the “running of a process to designate the universal service provider(s) who will be required to offer the service, giving both small and large providers a chance to put their names forward for consideration“.

Remaining Challenges

On the selection of a supplier(s), it’s worth nothing that only BT and KCOM have shown serious interest in supporting the USO, while other ISPs have largely rejected any notion of taking on the not insignificant legal and financial burden (example). We wouldn’t be too surprised if there aren’t many takers when Ofcom asks again but apparently there have recently been “expressions of interest from some smaller market players” in being designated as Universal Service Providers (USPs).

At this point some readers may understandably complain that the speed of 10Mbps, which Ofcom views as being enough to meet the requirements of an “average family“, is too slow. As such any forthcoming debate over new secondary legislation may reignite the battle for a 30Mbps USO. At this stage it’s worth remembering that the 10Mbps USO is only a “minimum” and most should get something far faster.

The problem with setting the USO at 30Mbps is that it would be considerably more expensive (up to £1.4bn according to the BSG) and could also risk damaging competition in the alternative network market, which would make it difficult to deliver in the current environment without causing further upset (particularly if BT were selected as the primary / only UK supplier).

In the end it’s likely that the primary responsibility will still fall on BT (UK) to deliver the USO, which in practice means that the national operator might still need to conduct much of the same deployment as it planned under the voluntary proposal. Either that or the whole roll-out could become very tedious, especially if masses of people request the USO service during early 2020.

On this point it’s worth noting that even BT’s voluntary proposal suggested that they wouldn’t have been able to fully implement the USO via fixed lines until December 2022 (this left 0.3% of premises to suffer Satellite, with an unspecified fixed wireless solution being used to meet the earlier 2020 deadline). None of this is going to magically change while the Government debates legislation.

Meanwhile ISPs will be keen to know details of precisely how the industry will be expected to help pay for all this, which tends to be an unpopular topic since no provider likes to raise their prices and forcing all customers to help pay for better connectivity in remote communities can be contentious.

It’s also worth pointing out again that other EU countries which have adopted a similar USO do not go as high as 10Mbps (e.g. Spain, Belgium and Croatia use 1Mbps, while Finland opted for 2Mbps and Malta is on 4Mbps) and many don’t even have one for broadband, although that could change (here).

Finally, the various regional governments will need to take care so as to align their respective non-binding broadband policies with the new legally binding USO. Both Wales and Scotland are aiming to achieve near universal coverage of 30Mbps+ broadband speeds by around the end of 2020 or 2021 and this could create some complicated problems if not correctly managed (duplicating investment etc.).

UPDATE 10:09am

Made a small tweak to clarify that Ofcom’s 190GB average is a ‘mean’, which falls to 84GB when using a ‘median’ average. Slower connections also tend to gobble less data, while Ofcom’s figure also factors all connections (including superfast and ultrafast etc.).

UPDATE 11:31am

Full details of the Government’s response to the USO design consultation are now online (here). Interestingly this states that “there have been expressions of interest from some smaller market players in being designated as Universal Service Providers (USP),” which would be a first and we’ll keep an eye out to see which are serious.

UPDATE 12:28pm

A comment has come in from the landowners association for England and Wales.

Tim Breitmeyer, CLA President, said:

“This commitment to universal broadband has been government policy for some time but it is still satisfying to see the enacting legislation laid. It means that the principle is now enshrined in law that no home or business should be left behind in the modern economy.

However, our campaign continues because although this commitment is right for now, technology advances at such a speed that is is essential for this law to evolve with the times. Whilst a minimum 10 Mbps download speed is adequate for now, that will change in the relatively near future.

Fixed broadband connections are only one part of the connectivity challenge. We have a long way to go to establish universal access to mobile data coverage that is equally important for people living and working in our countryside.

There are still technical issues to be resolved between now and the end of 2020 but the fundamentals are clear. As our right to the delivery of a letter was enshrined in law many decades ago, our access to digital connectivity will follow suit.

The CLA will work with Ofcom, the Department for Digital, Culture, Media & Sport and the wider industry to make sure the USO delivers the step change in consumer accountability that is promised.”

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Mark Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he is also the founder of ISPreview since 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
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28 Responses
  1. Gadget

    I’m sure this will be the start of some interesting discussions and debates.

    What interests me is the inclusion of the 100Gb allowance which can only be in the domain of the ISP and not really the infrastructure provider.

    • I wouldn’t worry too much about that 100GB minimum since most ISPs are already able to offer a much larger allowance than that and at affordable pricing.

      The main problem area would be Satellite packages, which tend to charge extremely high prices for that sort of allowance (10-30GB is more common among them for homes). But by 2020 there will be some new Satellite’s that should be able to offer 100GB at a more affordable level.

    • Guy Cashmore

      By 2020 a monthly allowance of 100GB will be nearly as useless as my 2 Mbps EO line is now. If this data cap remains, the USO will deliver nothing useful to rural areas, a few extra EE 4G masts and BT will claim USO compliance.

    • >[…] most ISPs are already able to offer a much larger allowance than that and at affordable pricing.

      Don’t they only offer unlimited these days?

      Thankfully they’re not like the Americans in that regard.

    • Guy Cashmore

      None of the 4G suppliers currently offer ‘unlimited’ packages suitable for use as home or office broadband.

  2. lyndon

    Is the 10Mbps+ speed based on your throughput speed or connection rate?

  3. Davek

    The USO is going to achieve nothing. Like USC pointless. All that will happen is you will be told to piss off and get satellite,.
    We all know that the final 2% are in the the most difficult to reach areas. My nearest neighbor is 500M away, I don’t live up a mountain, but just out of reach for FTTC so how is £3400 going to help me.

    • Guy Cashmore

      Unfortunately Davek I agree with you, for isolated rural like us USO will deliver nothing useful, we will be pointed to 4G or satellite which are already available. My 4G contract now is double the USO offer in terms of monthly data volume, 100GB/month is out of date already!

    • NGA for all

      I have seen connectorised FTTP units as low as two mounted on poles. There are folk getting FTTP delivered in very rural areas. The planning rules remain a bit and miss. Perhaps BT folk can comment on n indicative 500m o/h drop wire cost, but if the poles are in usable, £2-£3 a metre was being quoted in old FoD prices.

      How far from your neighbour to the re-usable infrastructure at the FTTC cabinet, from where BT can decide to use or decide to run more fibre to an aggregation node?

      There are now too many examples available to say it cannot be done. It is a matter of estimating a cost band and a time to deliver. The latter is more problematic.

    • Also too many examples of people repeating their own view that is at odds with how things are actually delivered.

      For Openreach Fibre on Demand it is distance to the aggregation node that matters not distance to the VDSL2 cabinet. So no decide to use applies, FTTP DOES NOT COME OFF OF A FIBRE INSIDE A VDSL2 CABINET

      Also cost bands on FoD are so 2016.

    • 3G Infinity (now 4G going on 5G)

      Think ‘difficult to reach’ needs to be put into perspective. The islands of Newfoundland and Labdrador are just putting in the last of the fibre for 99% coverage. First fibre delivered in 2006, using telegraph poles, worked well except when down at -40C and weight of ice did break a few fibres – answer was to put in a secondary microwave backbone to key properties, eg hospital, school and GP surgeries so that service was maintained until crews came out to patch in some more fibre.

    • Joe

      I do find the remorseless negativity slightly tiresome Guy. USO won’t solve every problem but it will mean many more people on FTTP/FTTC etc (down from ~3%->0.2% or so) and even that may yet be conservative. Regional/local bodies may still be will to grant subsidies on top of those extant to bridge fibr out further and reduce those numbers.

    • h42422

      @3G:

      Newfoundland has a population of 478.139 according to Wikipedia. Doing a quick survey on Google Earth, 98% of it seems to be uninhabited. Aiming for 99% there may not be exactly a challenge of similar magnitude than connecting 99,8% of the UK (65 million), where there are few vast, empty areas.

      UK has also a slightly different approach to land ownership. We have heard of several broadband projects running into problems because of this. Landowners do not generally want masts and they have the right to refuse them. Many do not even want cables dug through their lands. Connecting properties in English countryside using only public land is even more complicated. We have also heard of challenges to erecting masts to public areas because of aesthetic concerns, and all these need to be processed, appeals to higher authorities and courts processed and so forth.

      “Difficult to reach” does not always indicate a remote mountain top. Difficulties do not need to be physical. There is much more to it than just laying cable and everyone being happy. And many very remote locations within their countries (Newfoundland is a good example of this) are not actually too challenging as people tend to live around a few settlements instead of being scattered evenly around the remote region. The amount of infrastructure needed may not be massive, and to remote areas there are usually central government grants and subsidies to help finance the projects.

    • PC

      FTTP may be an option or wireless.

  4. Steve Jones

    The critical question of how this is to be funded is surely the biggest question here. The telephone USO is easy in that respect. Hull & Kingston apart, Openreach are expected to fund it (up to the threshold amount) and it’s recovered from the wholesale charges for all lines in the OR network. It’s a cross-subsidy model with urban areas effectively subsidising more rural ones. As it’s all in OR’s books, then it’s easy to administer.

    With this one, and especially with demand aggregation (not something that applies to the telephone USO), the amounts of money involved could get very serious. It would also be interesting to know if network operators can be compelled to provide the service and whether they will be required to cross-subsidise it from their own network revenues or if there really will be an industry wide fund (who will administer that – will there be some government or local authority body to decide on the operator – will there be a default operator compelled to fulfill the USO where no other operator will do it?).

    There’s a lot to sort out, and plenty of potential rows.

    • Joe

      ” It would also be interesting to know if network operators can be compelled to provide the service and whether they will be required to cross-subsidise it from their own network revenues or if there really will be an industry wide fund (who will administer that – will there be some government or local authority body to decide on the operator – will there be a default operator compelled to fulfill the USO where no other operator will do it?).”

      Yes, indirectly, yes, yes regionally (Ofcom perhaps) and yes

  5. occasionally factual

    I wonder if Tim Breitmeyer of the CLA would get all his members to offer, in perpetuity, free access(and free of any rent/way leaves) to their land for Openreach to install the necessary ducting for the USO?
    That should make it easier to roll out a workable solution.

    • Steve Jones

      I must admit I find the CLA’s relentless demand to have broadband and mobile provision to their rural havens subsidised by the rest of us whilst simultaneously demanding substantial payments for way leaves more than slightly annoying.

    • Joe

      Given the extra hastle caused to farmers by poles in fields (when plowing) or in hedges when cutting or quite imbecilic placement of poles/cables such as to obstruct gateways I don’t blame them for being wanting some compensation and being generally suspitious of proposals to give OR more freedom to place poles.

      Now if they were objecting to underground cables I’d take a different view.

    • Steve Jones

      @Joe

      Really? That just sounds like anecdote to me. Any evidence that this is widespread, or are you just taking a few examples and exaggerating them out of all proportion?

      In any event, this isn’t about compensation, it’s about the use of wayleave rentals as a source of income.

      Incidentally, “plowing” is an American abomination.

  6. Minor point but shouldn’t that be a white on blue circle?

  7. Brian Heslop

    Just come across this. The main problem is with £3400 not buying much with openreach’s high mark ups. 14 years ago it was £4500 to install a phone line with 650m of cable we buried ourselves.
    I’m currently on ADSLmax (no ADSL2+), 4km from the exchange and the primary cabinet 200m from the exchange, 3km from an infill cabinet. I’m told I’m very remote, when the median ADSL line length is 3.3km.
    The usage allowance is a joke, I’ve seen the usage on my slow adsl line. It’s pointless going to a faster system such as 4G when the cost would rise so sharply, or you would have to limit your data usage so drastically.

  8. Philip

    What a lot of bunkum! There is no such thing as a Universal Minimum Speed cos everyone’s phone lines are different. Different sizes, different ages. Your speed through the phone line depends on the condition of your phone line and distance to the exchange. Your line defines your speed. How do you get this minimum speed then? Open reach don’t change telephone lines unless a fault with phone calls. We don’t all get the same speeds! You can’t set a minimum cos we all get different speeds! There is no such thing as ‘universal’ broadband. We don’t all access it universally. Wake up!

  9. Matey1

    Just one problem! Broadband isn’t actually universal! No one ever said it was!

  10. Matey1

    “You must get something”! No we don’t! I don’t actually get universal home broadband. I’m typing this on a public network, cos I don’t get any at home! There is no such thing as ‘universal’ broadband! Its a misconception! Broadband isn’t universal!

  11. Ace1

    As an 8 bit computer user I should point out we use different methods for computer communication. Broadband isn’t universal! We don’t all use broadband on our phone lines. I use tape software on Mini Office 2 to communicate. Why are you thinking everyone has broadband? !! We are a friendly rival computer world! We dont all receive broadband!

  12. Philip

    We shouldn’t have to ALL request a fibre optic! We should be getting the universal minimum speed through our fixed lines! That’s the whole point! We all get the same minimym speed! Else its not a minimum is it!

  13. Flower

    I thought everybody got the minimum speed, not just those that can afford a fibre optic. That’s disgusting.

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