Gov to Review UK Rural Broadband Options and 10Mbps USO

The UK Government has today launched two interesting new consultations, including one that is seeking views on a looming review of the legally-binding 10Mbps+ Universal Service Obligation (USO) for broadband and another that will help better understand how to improve broadband for “Very Hard to Reach” areas.

We’ll start with the somewhat maligned USO. The obligation, which was introduced in March 2020, is aimed at those who can’t yet receive a 10Mbps or faster download and aren’t expected to be covered by such a network in the next 12-months. Supplied by UK ISPs KCOM (Hull) and BT (rest of the UK), the USO made it possible for such isolated users to request a service capable of 10Mbps+ downloads (1Mbps upload) etc.

At the last update in April 2023, BT revealed that it had provided a USO connection to over 7,000 premises (up from 5,900 in Oct 2022), with 800 further builds in progress (down from 2,000). Many of those who pursued the USO say they were offered 4G (mobile broadband) connections, but those considered delivered under the USO itself usually get full fibre (FTTP) lines. Commercial builds of the latter have also helped to shrink the USO gap.

Ofcom currently states that 62,000 UK premises currently fall into this gap (i.e. those outside of suitable fixed line, fixed wireless and 4G mobile coverage), which rises to 428,000 premises if you exclude wireless solutions (here). Sadly, some homes are would simply be too expensive for the even the USO to tackle (examples), at least in its current form (we’ve seen some tiny and sparse communities being quoted £1-2m).

Suffice to say that 4G is a highly variable method of broadband connectivity, particularly in rural areas, and fixed-line based alternatives are rarely viable enough (cost) to be delivered into remote rural areas under the USO. In short, the whole approach hasn’t been as effective as the aspirations that resulted in its creation, while the wider market and build plans have changed a lot over the past 3 years.

However, when the related legislation was finalised, it did include a trigger to start a formal review of the policy – once 75% of UK premises take up a 30Mbps (“superfast“) service. As of September 2022, 70% of premises have taken such a service, which does not take into account wireless networks whose available service has continued to increase in recent years. “It is likely that a formal review of the broadband USO will therefore be triggered shortly,” said the government today.

Consultation Focus

Based on previous discussions with stakeholders and correspondence the department has received from both applicants and parliamentarians affected by the broadband USO, we have identified the following areas we believe require review:

• Awareness of the broadband USO and the ability to apply for it
• Industry’s delivery of the programme
• Costs associated with the programme, including the reasonable cost threshold
• The broadband USO’s funding mechanisms
• In addition to the above, we are also taking this opportunity to consult on the following areas:
• The policy objectives of the broadband USO
• The service requirements and eligibility of applicants

The consultation will look at each of these areas in turn, and the issues presented, but does not set out any individual mechanisms in detail. Instead, it sets out a range of potential means to address them and welcomes stakeholders’ views on their viability.

The most cost-effective approach here may be to update the USO so that it can take account of recent developments, such as the launch of faster Low Earth Orbit (LEO) based broadband satellite services from Starlink and OneWeb. A number of related trials, some involving BT, are currently taking place across the UK to assess both as additional solutions for rural areas (examples here and here).

However, any bigger changes, such as significantly raising the required speeds, would risk requiring a huge injection of funding, triggering competition concerns by rivals and almost certainly end up being rejected by the industry. Most network operators, except for BT and KCOM, balked at the wider legal and cost obligations of taking on the 10Mbps USO.

Secretary of State for Rural Affairs, Thérèse Coffey, said:

“Our countryside, home to millions of people, is rich in potential and we want to make sure that everyone can develop their skills and reach the opportunities for success.

So whether through improved connectivity, housing or transport I’m championing rural communities as we seek to grow our economy – so that every part of our country gets the support it needs to thrive.”

The government’s new consultation on all this is expected to run until 11:55pm on 27th November 2023 (here), but it’s not the only rural broadband consultation being launched today. On top of this, they’ve also begun YET ANOTHER consultation (here) that “will help us to better understand how to improve broadband for Very Hard to Reach” areas.

Very Hard to Reach Areas

At present, the Government’s £5bn Project Gigabit broadband scheme aims to extend 1Gbps capable (download speed) networks to reach nationwide coverage (c. 99%) by around 2030 (here). But the government has also previously recognised that 0.3% of UK premises (i.e. under 100,000) will be “Very Hard to Reach” (i.e. too expensive for even Project Gigabit to tackle). This is roughly the same area as the USO, hence why we’re seeing both consultations being published at the same time – alignment.

The Government has already consulted upon alternative options for tackling VHTR areas (here), such as by considering LEO based satellite and fixed wireless access solutions. As above, we’ve already seen some related LEO satellite trials, and thus we’re unsure what the government expect to learn from this latest review that isn’t already abundantly obvious from past reviews.

VHTR Consultation Focus

The purpose of this consultation, which will be open for 8 weeks, is to set out further detail on our policy positions, provide further details on the analysis carried out as a result of the call for evidence responses and give respondents the opportunity to provide further evidence on any progress they have made or further barriers they have encountered since the call for evidence closed. This consultation specifically covers the following areas:

• The government’s policy position
• Our evaluation criteria for determining policy options and the potential options available to us
• The service parameters that very hard to reach premises may require
• Barriers to delivery that remain for very hard to reach premises.

The consultation will look at each of these areas in turn, setting out our proposals where applicable but also providing a range of potential options the government is considering. We welcome stakeholders’ views on any, and all, issues addressed as part of this document.

The new consultation will remain open for feedback for the same length of time as the USO one above. But the realities here are that, unless the government provides much more funding to tackle those extremely remote areas with full fibre delivery (they’ve already largely dismissed that idea under Project Gigabit), then they’re likely to be left with a policy that favours a mix of satellite, fixed wireless and mobile network based solutions. Much like has always been the case.