One UK Village’s Roller-Coaster Ride of USO Broadband Costs

The long running saga of trying to get a new Fibre-to-the-Premises (FTTP) broadband service installed across the village of Pandy in Wales is one step closer to a solution. But its plight also helps to highlight how difficult it’s been for some areas to harness the new 10Mbps Universal Service Obligation (USO).

Recently the 10Mbps USO has been in the news quite a bit and for all the wrong reasons. In theory it was supposed to make it possible for those in poorly served communities (i.e. those in the final 2% of the UK with sub-10Mbps speeds) to request that a new service be installed via BT (or KCOM in Hull), which could deliver a download speed of at least 10Mbps+ (1Mbps upload).

Most of the USO can be catered for by using 4G (mobile broadband) connectivity, which leaves around 180,000 premises where a fixed line solution may be the only option for now (usually delivered via FTTP since slower FTTC no longer fits with today’s focus on gigabit speeds). However, it’s always been the case that tens of thousands of premises may be too expensive for even the USO to tackle (i.e. costing many times more than the USO’s per property cost threshold of £3,400).

One such community is Pandy in the Ceiriog Valley area of North Wales (note: there are several areas with the same name in Wales), which in March 2020 saw the USO as a potential solution to their plight.

Confusing Quotes for Fibre

Initially the community found that 11 properties were each being quoted figures that ranged from between £11,000 and up to £30,000 (total of around £170K). At the time BT was still being unclear about whether or not everybody had to pay the total of all quotes combined or just the cheapest quote (BT confirmed the latter during our USO investigation in August). Residents also couldn’t understand why two properties, which were 2km closer to the nearest fibre than the others, were conversely being quoted the highest £30K figure.

Locals also sought a quote from Openreach’s separate Community Fibre Partnership (CFP) scheme and this, by comparison, returned a single quote of £205K for 58 properties. Residents noted that many of those 58 properties were miles away up in the hills, on completely different circuits (often also with good 4G), and others did not even exist (i.e. just plots or old sheds).

After some effort they were eventually able to have Openreach correct their data, but at £105K the final quote was still too expensive.

Bob Savage, Pandy Resident, told ISPreview.co.uk:

“Not to be thwarted, and as a result of exposure on BBC Wales news and concerted efforts here in Pandy early on in the first lock down, we got the copper infrastructure rebuilt at the end of July.

[Openreach also] took the opportunity to run fibre through our village, [and] at the same time through to the next village Tregeiriog. They then enabled Tregeiriog and they are now able to get FTTP, even though they did not take part in our efforts, and to our knowledge, not one of them applied for USO and they already had a faster speed!

Back on July 3rd our MP Simon Baynes, along with the agent, Wrexham County communications officer Mike Dugine, and local councillor Trevor Bates, all personally visited … and said that it was all sorted and that we would get FTTP before Christmas. All we would have to do was re-apply for the USO once the infrastructure was in place later in July and the cost would be within the £3,400 threshold.”

By Friday the 10th of July, the work was done, but upon applying for a new USO quote another resident, whose first quote was around £12K, was shocked to find that the cost of delivery had suddenly shot up to over £85K! Heaven help anybody who has to try and make sense of this and BT’s seemingly disjointed approach.

The quote also included a particularly confusing explanation for the change in value, which made precious little sense given the recent deployment of a new fibre spine through the village, and the connection of nearby Tregeiriog.

BT’s USO Quote Statement

“We’re sorry that you’re unhappy with the charge to build or upgrade the network to your premises. I understand that the original quote was given for £11,782.80 Inc. VAT. The increased quotation build costs are due to intervention area changes to the UK Government (BDUK) fibre broadband rollout plans that have occurred since the first quote was provided.

Essentially, the element of the project that Openreach might have expected to be funded by the UK Government now will not be. This has substantially increased the costs that must now, as per the USO rules, be covered by the end user for the relevant network build to go ahead.”

As Bob said, “It seems illogical and really unfair that we, here in Pandy, who have done all the ‘spade work’ both now and back in 2017, have enabled FTTP in the villages either side us (Glyn Ceiriog and Tregeiriog), while we have missed out on both occasions.” Fair point indeed Bob.

After getting nowhere ISPreview.co.uk decided to take another look at Pandy and raised their case through BT’s USO team. The bad news is that, after a review, locals in Pandy still won’t be able to get FTTP via the USO at no extra cost, despite all of their efforts over the past few years, but the good news is that the operator expects to get the total cost down to under £10,000.

A BT Spokesperson told ISPreview.co.uk

“Openreach has reviewed the costs for the area and been able to bring it down to under £10,000 for the whole build connecting 44 premises. This is due to some of the Building Digital UK work being partially built which has a significant impact on reducing the total cost.

We’ll look into next steps for contacting eligible residents in the area about this change. We’re also working through how best to provide the option for communities to split the cost of an USO connection build between them.”

BT does acknowledge that, under the original plan, they expected the local BDUK build to a nearby area would enable these USO-eligible premises to be built at no extra cost to local residents. However, as sometimes does happen, the build plan changed because the costs were higher than expected (this is why one property ended up with a quote for £85K as it failed to properly account for the new fibre).

However, BT has now corrected for the presence of the new spine fibre that runs into the north of the Pandy area, which while only partially complete, can still be used to help bring down the cost to £10K. The result may not be ideal but at that price it is much more affordable than most of the complaints we see about USO quotes with excess costs applied.

Anybody familiar with the quotes from Openreach’s FTTP-on-Demand product will already be familiar with the challenges of securing accurate costings, which have perhaps inevitably found their way into the USO process. The good news is that Ofcom have now launched an investigation into all of this (here), which we hope will result in some improvements and a better way of handling the delivery costs.

On the other hand, and much as we’ve said before, Ofcom’s probe will not produce a magic fix for the fact that it remains far too expensive to connect up some USO eligible communities. Even the Government’s future £5bn investment in gigabit broadband, which is focused on the final 20% of hardest to reach premises, recognises that those in the final 1% may be unviable due to high costs (here).

Meanwhile, if you are one of those who has the misfortune to receive a huge USO quote, then today’s lesson is simple – don’t give up! BT can get these things wrong, but it often takes a lot of effort by the community to check and correct for that.