{"id":23268,"date":"2020-08-30T00:01:02","date_gmt":"2020-08-29T23:01:02","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=23268"},"modified":"2020-08-26T17:07:59","modified_gmt":"2020-08-26T16:07:59","slug":"the-high-cost-of-broadband-for-uso-excluded-uk-communities","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2020\/08\/the-high-cost-of-broadband-for-uso-excluded-uk-communities.html","title":{"rendered":"The High Cost of Broadband for USO Excluded UK Communities"},"content":{"rendered":"<p>The elephant in the room of the UK Government&#8217;s broadband centric <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2020\/03\/10mbps-uk-broadband-universal-service-obligation-to-go-live.html\">Universal Service Obligation<\/a> (USO) has always been the fact that it isn&#8217;t truly &#8220;<em>universal<\/em>&#8221; and tens of thousands of premises have fallen outside of its scope. In other words, getting a minimum speed of 10Mbps can become very expensive for some.<!--more--><\/p>\n<p>Assuming you were all following the development of the new USO on ISPreview.co.uk, then you probably already know about the pricey catch-22 of its design, but since the obligation was implemented in March 2020 many people are now finding out about this for the first time. Needless to say, the high cost of deployment is quickly being brought into a sharp focus.<\/p>\n<div class=\"bq2\"><strong>NOTE:<\/strong> <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/ofcom\" target=\"_blank\">Ofcom<\/a>&#8217;s spring 2020 coverage data found that around 2% of the UK or 608,000 premises fall into the USO (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2020\/05\/ofcom-full-fibre-broadband-grows-to-3-5million-uk-premises.html\">here<\/a>), which drops to 189,000 premises when <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/4g\">4G<\/a> (mobile) is included as a solution.<\/div>\n<p>Before we get started it&#8217;s important to understand what the USO is and how it works. Essentially, those who live in an area where download speeds of at least 10Mbps (1Mbps upload) aren&#8217;t achievable have gained the &#8220;<em>legal right<\/em>&#8221; to &#8220;<em>request<\/em>&#8221; a 10Mbps+ capable connection from <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/britishtelecom\" rel=\"nofollow\" target=\"_blank\">BT<\/a> (or <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/kcom\" rel=\"nofollow\" target=\"_blank\">KCOM<\/a> if you live in Hull). Meanwhile areas that are due to benefit from a &#8220;<em>publicly funded broadband rollout plan within the next 12 months<\/em>&#8221; remain excluded.<\/p>\n<p>A cost threshold of <strong>\u00a33,400 per premises<\/strong> applies to the USO. In other words, if the cost of building or upgrading your share of the network connection is \u00a33,400 or less, then you won&#8217;t have to pay for this work to be done. If it costs more than that to connect your home, and you still want a connection, then you can choose to pay the excess costs or forget it. The build itself is expected to take 12 months, but may take up to 24 months for some.<\/p>\n<p>Originally the expectation was that this would be delivered using fixed line broadband ISP solutions, such as <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/fttc\">FTTC<\/a> or <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/fttp\">FTTP<\/a>, but <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/ofcom\" target=\"_blank\">Ofcom<\/a>&#8217;s decision to allow <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/4g\">4G<\/a> (mobile broadband) into the mix has changed things (see above). Despite this, there are still some areas where neither <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/4g\">4G<\/a> nor fixed lines can reach at 10Mbps. <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/britishtelecom\" rel=\"nofollow\" target=\"_blank\">BT<\/a> previously estimated that 110,000 premises could end up being too expensive for even the USO to solve.<\/p>\n<h3><span style=\"color: #339966;\"><strong>Expensive Civil Engineering<\/strong><\/span><\/h3>\n<p>In order to understand how expensive it is to connect remote communities we have to look back at a few practical examples, including some by other operators. One such scheme was the excellent <strong><a href=\"http:\/\/balquhidder.net\" target=\"_blank\" rel=\"noopener noreferrer\">Balquhidder<\/a><\/strong> deployment in rural Scotland (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2019\/02\/final-cabinet-installed-for-balquhidder-1gbps-community-ftth-build.html\">here<\/a>), which aimed to connect c.200 premises (mostly homes) around Loch Doine and Loch Voil with <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/fttp\">FTTP<\/a>. This cost over \u00a3400,000 (\u00a32,000 per premises) due, in part, to the sparse and rugged terrain.<\/p>\n<p>Other recent examples include the <strong><a href=\"https:\/\/www.myfi.wales\/\" target=\"_blank\" rel=\"noopener noreferrer\">Michaelston-y-Fedw<\/a> <\/strong>community project in rural Wales (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2018\/11\/rural-wales-ftth-project-is-2018-finalist-for-the-eu-broadband-awards.html\">here<\/a>), which at the time was working to a budget of around \u00a3260,000 (<strong>\u20ac300,000<\/strong>) in order to connect roughly 70 properties, but they&#8217;ve since raised this to 200 with <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/fttp\">FTTP<\/a> &#8211; this equates to a per premises cost of around \u00a31,300-\u00a31,400.<\/p>\n<p>At the cheaper end of the spectrum there are examples like the <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/openreach\" target=\"_blank\">Openreach<\/a> (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/britishtelecom\" rel=\"nofollow\" target=\"_blank\">BT<\/a>) based <strong><a href=\"https:\/\/www.openreach.com\/fibre-broadband\/community-fibre-partnerships\" target=\"_blank\" rel=\"noopener noreferrer\">Community Fibre Partnership<\/a><\/strong> (CFP) in the rural Welsh village of <strong>Llancarfan<\/strong> (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2019\/03\/llancarfan-hails-largest-fttp-community-fibre-partnership-in-wales.html\">here<\/a>), which was quoted about \u00a367,000 to cover 129 properties (\u00a3519 per premises). Meanwhile another <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/openreach\" target=\"_blank\">Openreach<\/a> build to connect just 5 remote rural homes around <strong>Morton Farm<\/strong> (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2019\/05\/moans-after-22-7k-openreach-fttp-quote-for-5-rural-fife-homes.html\">here<\/a>), just south of Tayport in Fife (Scotland), was quoted around \u00a323,000 (\u00a34,600 per premises).<\/p>\n<p>Crucially some community projects can save a lot of money by involving volunteers to help build the network and encouraging local land owners (e.g. farmers) to waive their right to wayleave fees, but other locations aren&#8217;t so lucky. Suffice to say that every area is different, but it&#8217;s a well established fact that connecting up smaller rural communities is a slow and expensive business (hence why they&#8217;re usually the last to benefit).<\/p>\n<p><a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/openreach\" target=\"_blank\">Openreach<\/a> has previously estimated that some rural communities in the final 10% of areas could require an &#8220;<em>outlay of around \u00a34,000 each to pass<\/em>&#8221; with FTTP (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2019\/08\/openreach-fttp-final-10-of-uk-likely-to-cost-4000-per-premises.html\">here<\/a>), which compares with build costs of \u00a3300-\u00a3400 for the first 50% of more commercially viable UK premises. Meanwhile <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/ofcom\" target=\"_blank\">Ofcom<\/a>&#8217;s more optimistic model indicated that the capital expenditure needed to do FTTP for the first c.20 million UK premises is under \u00a3500 per premises, but above that point it quickly rises to around \u00a32,500 (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2019\/06\/ofcom-uk-examines-the-cost-of-deploying-full-fibre-broadband.html\">here<\/a>).<\/p>\n<h3><span style=\"color: #339966;\"><strong>Costs for the USO Excluded<\/strong><\/span><\/h3>\n<p>The above examples seem to indicate that a cost threshold of \u00a33,400 per premises should be enough to help cover the bulk of costs for many USO communities that exist without access to either a viable fixed line or 4G solution, although clearly BT expects that quite a few areas will still be more expensive than this to tackle. Indeed some extremes will exist that go way above that level.<\/p>\n<p>According to one of Ofcom&#8217;s documents on the USO design from March 2018 (<a href=\"https:\/\/assets.publishing.service.gov.uk\/government\/uploads\/system\/uploads\/attachment_data\/file\/695121\/USO_consultation_government_response_28_March.pdf\">here<\/a>), &#8220;<em>The final 1% of UK premises are materially more expensive to connect than premises in the rest of the country, and within this, that the most expensive premises to connect could cost \u00a345,000 or more<\/em>&#8221; (a specific broadband technology isn&#8217;t mentioned for this estimate).<\/p>\n<p>The regulator also stated that a \u00a33,400 threshold should achieve 99.8% coverage &#8220;<em>while avoiding the exponential costs of the most expensive to reach premises<\/em>&#8220;, which the <strong>Local Government Association<\/strong> (LGA) estimates would leave c.60,000 unserved by the USO (this is below BT&#8217;s estimate but still in roughly the same sort of ballpark).<\/p>\n<p>The USO has now been in operation for several months, albeit at reduced effectiveness due to the <strong>COVID-19<\/strong> crisis, and as a result we&#8217;re starting to see a growing list of USO requests that seem to fall outside of the cost threshold. The following examples represent those that cost more than the per premises threshold (i.e. the quotes have already subtracted the cost threshold, leaving a bigger bill left to pay).<\/p>\n<div class=\"bq2\"><strong>NOTE:<\/strong> Quotes will often only apply to SOME of the community (clusters), particularly if it&#8217;s already partly served by an existing 10Mbps+ capable connection (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/fttc\">FTTC<\/a>, <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/adsl\">ADSL<\/a>, 4G etc.).<\/div>\n<blockquote><p><span style=\"color: #339966;\"><strong>Example USO Quotes (those not fully covered by the \u00a33,400):<\/strong><\/span><\/p>\n<p><strong>\u27a0<\/strong> <strong>Llangwm<\/strong> (Monmouthshire), home to about 20 properties within a 200 metre radius of the quoted premises (100+ properties across the entire area), was quoted \u00a330,000 to one resident.<\/p>\n<p><strong>\u27a0<\/strong> <strong>Pandy<\/strong> (Ceiriog Valley, Wrexham) saw 11 individual properties each being quoted figures between \u00a311,000 and \u00a330,000. Most were about 4km from the nearest known fibre, but only two got the \u00a330k quote and oddly they were 2km closer to that fibre than the others.<\/p>\n<p style=\"padding-left: 40px;\"><strong>USO Quotes Received<\/strong><br \/>\n\u00a311,782<br \/>\n\u00a311,000<br \/>\n\u00a311,782<br \/>\n\u00a311,782<br \/>\n\u00a312,000<br \/>\n\u00a311,782<br \/>\n\u00a312,000<br \/>\n\u00a311,782<br \/>\n\u00a311,782<br \/>\n\u00a330,000<br \/>\n\u00a330,000<br \/>\nTOTAL: \u00a3165,692.00<\/p>\n<p>Locals were later informed that the community partnership (CFP) scheme was their only way forward &#8211; instead of the USO &#8211; and they, by comparison, had an initial quote of \u00a3150k 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 other properties did not exist (i.e. just plots or old sheds).<\/p>\n<p>Residents have since updated Openreach with the correct information and added a few premises they missed. Once gigabit vouchers are added (only under a CFP) then the final quote is expected to be less than half the original, which just goes to show that you can never fully rely on the first quote to be accurate (i.e. if you can, do your own checking as a community first).<\/p>\n<p><strong>\u27a0 Brentor<\/strong> (Devon), home to around 400 people (100+ premises), saw some individuals being given quotes of \u00a342,000 to \u00a345,000.<\/p>\n<p><strong>\u27a0 Strathconon<\/strong> [general area] (Highlands), an extremely remote location in Scotland with 21 premises (mostly holiday cottages), saw one individual (John) being given a quote of \u00a31.1m (let that sink in!). Despite this John was previously given a separate CFP quote by Openreach for the same area and that came in at \u00a3535k, although it also included two other nearby communities (80+ premises).<\/p>\n<p>Meanwhile a &#8220;<em>neighbour<\/em>&#8221; about 2.8 miles away (via road) got a USO quote for only \u00a3160k, which reflected about 18 properties and is similarly remote. However, it&#8217;s hoped that <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2020\/02\/first-mobile-mast-live-in-scotlands-delayed-4g-infill-scheme.html\">Scotland&#8217;s 4G Infill Programme<\/a> will soon complete a new mobile mast, which looks as if it may serve the area (it remains to be seen if that delivers 10Mbps+).<\/p><\/blockquote>\n<p>We have also seen various other quotes, but we don&#8217;t yet have enough information about all of them and in any case the trend is often similar to those listed above. Crucially, the process for handling these has revealed that BT&#8217;s messaging still needs some significant improvement.<\/p>\n<p>In order to better illustrate these issues we&#8217;re going to pick out one example from<strong> Colin Dawes<\/strong>, who lives in the rural village of <strong>Brentor<\/strong> (mentioned above) on the edge of Dartmoor in Devon and take you through some of his story. A lot of what Colin has experienced is shared in common with others who have found themselves in this same boat.<\/p>\n<h3><span style=\"color: #339966;\"><strong>Example USO Complaint from Rural Devon<\/strong><\/span><\/h3>\n<p>Colin lives across an area of moorland currently served by a buried copper cable that also serves the rest of the village, but at present the best fixed broadband speed at his location is less than 5Mbps and there&#8217;s no viable mobile signal. <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/airband\" rel=\"nofollow\" target=\"_blank\">Airband<\/a>&#8217;s fixed wireless network is also nearby-ish but, due to tall trees, that isn&#8217;t an option for everybody.<\/p>\n<p>Please click to continue reading on page 2..<\/p>\n<p><!--nextpage--><\/p>\n<p>Colin applied for the USO and was found to be eligible: &#8220;<em>There are apparently twenty five or more nearby properties in the same situation in my village of Brentor. I have been asked to contribute \u00a342,457.20 (after the deduction of the \u00a33,400 USO grant) towards the cost. Several other local residents have been asked for the same sum<\/em>,&#8221; he added.<\/p>\n<p>Like most of the people who have shared their stories with ISPreview.co.uk over the past few months, Colin has been left confused by how BT&#8217;s quotes work and are being pieced together (technically they&#8217;re from Openreach).<\/p>\n<p>The operator&#8217;s tendency to give differing figures for similar properties has also done little to help this issue (better messaging is needed to correctly explain how everything works).<\/p>\n<blockquote class=\"bq1\"><p><strong>Colin Dawes told ISPreview.co.uk:<\/strong><\/p>\n<p>&#8220;I have been told that my quote of \u00a342,457.20 was calculated by deducting all the USO grants from the 26 eligible premises (\u00a33,400 each) from the total cost of network installation. From the information in my deadlock letter from BT (see below), this means that the installation cost is based on 26 eligible properties providing a total grant of \u00a388,400, plus the remaining sum of \u00a342,457.20, coming in total to \u00a3130,857.20. I believe that the 26 houses might only represent 70% of all the eligible houses in Brentor.<\/p>\n<p>On top of all this, a neighbour has a deadlock letter stating that only 14 houses are eligible for grants, but miraculously his quote also works out to \u00a342,457.20. Someone is clearly making things up as they go along.<\/p>\n<p>Another neighbour has had a deadlock letter but this only quotes the cost as between \u00a330,000 &#8211; \u00a340,000, although it mentions it being based on 26 eligible houses.&#8221;<\/p><\/blockquote>\n<p>However BT&#8217;s USO helpdesk later informed him that only the first premises asking to be connected has to pay the \u00a342,457.20 and after that everyone else gets the connection for free (i.e. hard luck if you&#8217;re the first person to pay, which is where a little community organisation and related encouragement or facilitation from BT could help). &#8220;<em>We were previously told that all of us would have to pay<\/em>,&#8221; said Colin.<\/p>\n<p>As for the question of why a cluster of 14 premises in the same postcode got the same quote as those in a cluster of 26, BT informed Colin that details of the cluster design are commercially sensitive information. Using his neighbour as an example, Colin added, &#8220;<em>strange that he is in a different cluster, when he shares a post code with us and other neighbours in the cluster of 26, and is sited between our houses!<\/em>&#8220;. Below is a copy of his neighbour&#8217;s deadlock letter (article continues beneath).<\/p>\n<p style=\"text-align: center;\"><span style=\"color: #339966;\"><strong>Example of BT&#8217;s USO Deadlock Letter<\/strong><\/span><\/p>\n<p><img decoding=\"async\" class=\"ngg-singlepic ngg-none\" style=\"padding: 0px; width: 100%;\" src=\"https:\/\/www.ispreview.co.uk\/wp-content\/gallery\/2020-article-illustrations\/bt_uso_deadlock_letter.png\" alt=\"bt uso deadlock letter\"><\/p>\n<p>Fast forward several months, to August 2020, and Colin has informed us that, after most of his community complained, BT has suddenly changed their tune (again) and have now pledged to roll-out the new service at zero cost. &#8220;<em>We were all told by phone that the Openreach engineers had looked at their cost estimates again and had found that they could build our new fibre network within the parameters of the funding available<\/em>,&#8221; said Colin.<\/p>\n<p>Quite the turnaround and another example of why a) nobody should take the first quote they receive as accurate and, b) the importance of encouraging your community to work together in its response (we can&#8217;t stress this enough &#8211; many will just give up at the first hurdle, but you shouldn&#8217;t!). Sadly though, there&#8217;s another sting in the tail left of this story and, much like before, BT seem to be sending mixed messages.<\/p>\n<blockquote class=\"bq1\"><p><strong>Colin Dawes told ISPreview.co.uk:<\/strong><\/p>\n<p>&#8220;I called the help desk again just to be sure that the quote was the zero one and not the \u00a342,457.20 one. About a week later they emailed to say that they reserved the right to charge something if the cost of building the network went higher than their estimate.<\/p>\n<p>When I rang the USO help desk to complain that I had already accepted a verbal quote of \u00a3zero I was told that this is within the Ofcom terms and conditions for the USO scheme. I asked where I could see the terms and conditions and was referred to the 164-page Ofcom document \u2018<em>Delivering the Universal Broadband Service<\/em>\u2019. Try ploughing through that!<\/p>\n<p>I also looked at the BT document &#8211; &#8216;<em>Your right to request a decent broadband service<\/em>&#8216; and it clearly states under the heading &#8216;<em>What will it cost<\/em>&#8216; : &#8216;<em>If the cost of building or upgrading your share of the network connection is \u00a33,400 or less, you won\u2019t have to pay for this work to be done. If it will cost more than \u00a33,400 to connect your home, and you still want a connection, you will have to pay the excess costs. If you want to do this, BT\/ <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/kcom\" rel=\"nofollow\" target=\"_blank\">KCOM<\/a> will conduct a survey and give you a quote within 60 days<\/em>.&#8217; Nowhere does it say that this price will be revisited at a later date if the network building cost increases.<\/p>\n<p>I enquired about the legality of charging more at a later date with Ofcom and they told me that when I verbally accepted the BT quote it is fixed and BT cannot charge more. I&#8217;m still taking this matter to the communications ombudsman to be sure that I cannot be charged more and I expect them to uphold the complaint after what Ofcom told me.<\/p>\n<p>During my conversation with Ofcom I was told that in exceptional circumstances the USO funding can be increased to <strong>\u00a36,800 per property<\/strong>, so there shouldn\u2019t be many cases where charges need to be made.&#8221;<\/p><\/blockquote>\n<p>Suffice to say, the whole episode has been a bit of a confused mess for those simply trying to get a decent broadband connection. Colin&#8217;s experience has also been echoed by many of the other complaints we&#8217;ve received, although this has at least helped to identify the need for further improvements in how BT communicates with those making a USO request.<\/p>\n<blockquote><p><strong><span style=\"color: #339966;\">Common Problems Identified by ISPreview<\/span><br \/>\n<\/strong><\/p>\n<p><span style=\"color: #000000;\"><strong>\u27a0<\/strong><\/span> People who receive such quotes often make the mistake of assuming that this is the cost to connect their own individual home, which is technically true but becomes confusing when everybody starts adding local quotes together in an effort to figure out the total cost. Except that&#8217;s not how this works. A spokesperson for BT said, &#8220;<em>Once a customer accepts the bill then the structure is built and all users on that structure benefit with no additional build cost<\/em>.&#8221; BT explains this in more detail later on, but clearly they need a better way of communicating this.<\/p>\n<p><span style=\"color: #000000;\"><strong>\u27a0<\/strong><\/span> The first quote is perhaps more akin to a desktop quote, which is an estimate and can make mistakes. The cost may thus increase, or even decrease, when it comes to conducting a deeper survey (e.g. after complaints) or when acting as a community to correct mistakes made by Openreach&#8217;s analysis.<\/p>\n<p><span style=\"color: #000000;\"><strong>\u27a0<\/strong><\/span> Under the rules BT are required to provide a &#8220;<em>detailed quote,<\/em>&#8221; but in practice most of the quotes tend to be quite vague (i.e. they give a cost, identify the number of USO premises eligible and a rough % breakdown of where the cost is going &#8211; street works (civils), cabling \/ jointing etc.). In fairness, this is fairly standard form from the Openreach side.<\/p>\n<p>Often people aren&#8217;t even told what broadband technology the quote covers (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/fttc\">FTTC<\/a> or FTTP). As one person said: &#8220;<em>I pressed the USO help desk people to give me an idea of what we would get. After all, would you pay \u00a3\u00a3\u00a3\u00a3 for a car and not know if you were getting a Reliant Robin or a Ferrari? I was told that BT aren\u2019t really doing copper technology any more &#8230; so we would <u>probably<\/u> be getting FTTP<\/em>.&#8221;<\/p>\n<p><span style=\"color: #000000;\"><strong>\u27a0<\/strong> <\/span>The &#8220;<em>deadlock<\/em>&#8221; letter that people receive after complaining about their quote being too expensive (see the above example) recommends &#8220;<em>if you&#8217;re unhappy, and as this is our final response, you can contact the Ombudsman Services<\/em>&#8221; (Ofcom approved ADR complaints handler).<\/p>\n<p>However, despite telling people to do this (Ofcom do the same), some people are then finding that BT sometimes objects to their complaint when it&#8217;s raised by the customer with OS. The reason given is because the customer does not have a BT account. At present it&#8217;s unclear how many USO ADR complaints, if any, have actually resulted in a positive ruling for consumers.<\/p>\n<p>One of those affected said it best: &#8220;<em>To me this seems wrong, since the complaint is against BT as the agent of the government in delivering the USO, not as their phone provider. The deadlock letter received &#8230; suggested that they could take recourse through the ombudsman!<\/em>&#8221;<\/p>\n<p><span style=\"color: #000000;\"><strong>\u27a0<\/strong> <\/span>A 4G mobile solution is sometimes being recommended in areas where, even with an external antenna fitted, either the weakness of the signal or poor capacity at the mast conspires to deliver sub 10Mbps speeds. Mobile is a highly variable service and getting an accurate gauge on performance can, in some areas, be incredibly difficult. Sadly this often only becomes apparent later and the customer then has to complain.<\/p>\n<p><span style=\"color: #000000;\"><strong>\u27a0<\/strong> <\/span>People who accept a USO quote from BT are later sent a letter that warns: &#8220;<em>However, if the cost of building the network increases significantly, you might need to pay an extra charge for the work to continue. We&#8217;ll let you know if that happens so you can decide what to do<\/em>.&#8221; This can discourage some people, but Ofcom informs that nobody should be forced to pay more than the agreed amount (obviously if you choose not to pay then you don&#8217;t get the service).<\/p>\n<p><span style=\"color: #000000;\"><strong>\u27a0<\/strong><\/span> Which is cheaper &#8211; the USO route via BT or trying for a CFP via Openreach directly? Technically speaking the USO should be cheaper as the cost threshold (\u00a33,400) is, in many areas, bigger than the \u00a31,500 vouchers offered to homes with rural CFPs (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2019\/05\/200m-uk-rural-gigabit-broadband-connectivity-programme-starts.html\">here<\/a>), but some areas (e.g. West Sussex &#8211; <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2020\/06\/west-sussex-uk-boosts-rural-gigabit-broadband-vouchers-to-4k.html\">here<\/a>) have boosted their vouchers via CFP to \u00a34K or more.<\/p>\n<p>A few other areas have found that CFP quotes were still cheaper than the USO due to unclear reasons (e.g. the earlier example from the Highlands of Scotland), but experiences do vary. As it stands, vouchers constitute public funding and thus they cannot be combined with the industry funded USO.<\/p><\/blockquote>\n<h3><span style=\"color: #339966;\"><strong>Closing Thoughts<br \/>\n<\/strong><\/span><\/h3>\n<p>In an ideal world the USO wouldn&#8217;t need ordinary people to know about the underlying local infrastructure in order for it to work both clearly and effectively for those who need it, particularly those groups who sit outside of its cost threshold. Sadly, time and again we have seen examples where, in order to get a reliable idea of fair costing, the community often has to work together in order to identify and correct for mistakes in BT&#8217;s initial quote.<\/p>\n<p>Please click to finish reading on page 3 (including responses from BT and Ofcom)..<\/p>\n<p><!--nextpage--><\/p>\n<p>However not every community is going to be as willing to challenge such quotes as others and, when acting as an individual, it can clearly be extremely difficult to know whether or not you&#8217;re being treated fairly by BT. On this point there&#8217;s a notable lack of knowledgeable independent oversight (this too would be difficult since assessing whether a quote is fair or accurate can be tricky without engineers on the ground).<\/p>\n<p>In fairness this is difficult for BT too and they&#8217;re still learning. Communities change over time and Openreach&#8217;s internal data isn&#8217;t always as accurate or detailed as we&#8217;d like. On top of that the USO was introduced just as the <strong>COVID-19<\/strong> crisis was really starting to kick off, which created an additional headache due to limited resources (although they did have a year to prepare for it beforehand).<\/p>\n<p>On the other hand, it&#8217;s not like BT&#8217;s quotes are all falling massively outside of the ball park (excluding a few extreme examples), as we can see when comparing against some of the other non-BT examples. Furthermore, it&#8217;s worth remembering that BT and <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/kcom\" rel=\"nofollow\" target=\"_blank\">KCOM<\/a> were the only ones out of an entire industry that were willing to take on the high costs and legal responsibility of delivering the USO.<\/p>\n<p>At this point we should mention that BT contribute toward funding the USO themselves, but Ofcom can establish a <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2020\/05\/ofcom-sets-out-funding-rules-for-10mbps-uk-broadband-uso.html\"><strong>Universal Service Fund<\/strong><\/a> (USF) with the wider industry if they &#8220;<em>find that there is an unfair net cost burden<\/em>&#8221; being imposed on BT or KCOM due to its delivery (i.e. compensation for the USO operators). So far this hasn&#8217;t happened but, given the above quotes, we suspect there may be an argument for establishing the USF. &#8220;<em>For the fund to be triggered, BT will need to submit detailed costs demonstrating the net burden of delivering the USO<\/em>,&#8221; said the operator&#8217;s July 2020 financial results.<\/p>\n<h3><span style=\"color: #339966;\"><strong>What do the regulator and BT say?<\/strong><\/span><\/h3>\n<p>We raised some of the key points from our investigation above with Ofcom and BT. In response a spokesperson for the regulator told ISPreview.co.uk that they were &#8220;<em>concerned about the high amounts BT has quoted some people &#8230; particularly where connection costs could be split across a number of homes in an area. We\u2019ve raised this with BT as a matter of urgency and expect it to take action<\/em>.&#8221;<\/p>\n<p>Ofcom added that, under the USO, BT are required to take due account of the extent to which costs may be shared by multiple locations (i.e. demand aggregation). However, as we&#8217;ve seen above, the quotes don&#8217;t always seem to make much sense and end up causing confusion (e.g. one moment it&#8217;s \u00a330k, but for others in the same area it&#8217;s \u00a312k and in some cases this has later become free etc.).<\/p>\n<p>The regulator clarified that, &#8220;<em>while each quote has to be sent to &#8211; and paid for by &#8211; an individual rather than a collective, BT\u2019s costs (whether above or below \u00a33,400) should be calculated and shared according to the demand aggregation model (which effectively assumes that sharing will take place), rather than lumping all shared costs into individual quotes<\/em>.&#8221;<\/p>\n<blockquote class=\"bq1\"><p><strong>A BT Spokesperson said:<\/strong><\/p>\n<p>&#8220;The common theme in these cases appears to be driven by the fact that the current USO process seeks to maximise the efficiency of USO build by \u201cclustering\u201d potential USO customers onto a single fibre splitter where possible. Therefore when we receive a single request for USO we will seek to build a splitter based FTTP solution that addresses that customer and other USO customers in the same area.<\/p>\n<p>We will contribute the USO funding threshold of \u00a33400 to the costs for each potential USO customer addressed (subject to an Ofcom agreed take up assumption of 70%) in order to calculate the excess cost over and above the USO contributions, and that total excess cost bill will be presented to the customer who requests the service, and similarly other customers on the same cluster will receive an equivalent bill until it is accepted by one of them.<\/p>\n<p>Once a customer accepts the bill then the structure is built and all users on that structure benefit with <em>no additional build cost<\/em>. Therefore in the first case of multiple similar but different quotes in Pandy this appears to be customers on multiple clusters receiving quotes to build their particular cluster, and in the case of the Brentor case the cost of the cluster build (once USO contributions have been deducted) would be \u00a342,00 and once this is paid the structure would be built and all customers on the structure receive the benefit at no additional cost.<\/p>\n<p>We are also looking at alternative approaches to sharing these excess costs amongst more of the potential beneficiaries rather than just the requesting customer with Ofcom, however <em>the USO process isn\u2019t currently set up to accommodate this type of request<\/em> but we are working with Ofcom to find a solution where it can be possible but without the risk of BT incurring costs which it cannot recover.&#8221;<\/p><\/blockquote>\n<p>BT also pointed out that Openreach had recently improved their costing model for the USO and as a result of that they have been able to lower the cost to some customers who received quotes under the old model. &#8220;<em>This has been achieved by sharing build costs across more premises than we initially thought. This meant that the revised quotes were much lower and in some cases, as you highlight here, were actually free,<\/em>&#8221; said BT (all affected customers are said to have been contacted directly about this).<\/p>\n<p>Moving on to the subject of complaints (ADR) about the USO process, Ofcom noted that the ombudsman &#8220;<em>can only rule on whether BT have followed the proper process when providing their quote<\/em>&#8221; and will not be carrying out their own costing exercise to independently verify it. BT also clarified why they had attempted to reject some complaints.<\/p>\n<blockquote class=\"bq1\"><p><strong>A BT Spokesperson said:<\/strong><\/p>\n<p>&#8220;We became aware of a number of instances of this type of issue, on investigation they appear to have been caused by customer enquiries being handled by the normal BT Consumer teams rather than the dedicated USO teams. Our normal BT Consumer team process requires a BT customer account in order to progress.<\/p>\n<p>This resulted in some failures as you have highlighted here. We have made changes to the process to direct USO issues to a dedicated USO complaint route that should have now resolved these issues.&#8221;<\/p><\/blockquote>\n<p>As for the issue of who pays, such as when somebody agrees to proceed (i.e. pay the proposed excess costs in the quote) and then the final price increases again, the regulator&#8217;s view is that &#8220;<em>if the customer does not want to do this, BT can remove eligibility<\/em>&#8221; (i.e. you may walk away with nothing but also no surprise bill to pay). Generally, Ofcom said that BT should deliver the build based on the agreed excess costs.<\/p>\n<div class=\"bq2\"><strong>NOTE: <\/strong> If a connection is originally estimated to cost below \u00a33,400, but then costs increase, BT are expected to continue this build at no extra cost to the customer until costs reach \u00a36,800 &#8211; at which point they should ask the customer if they want to pay the excess above \u00a36,800.<\/div>\n<blockquote class=\"bq1\"><p><strong>Ofcom&#8217;s spokesperson concluded:<\/strong><\/p>\n<p>&#8220;We\u2019re continuously monitoring how the USO is going, to make sure it\u2019s delivering the desired benefits for customers. As mentioned above, we\u2019re concerned about the information some people are receiving, which we\u2019ve raised with BT.&#8221;<\/p><\/blockquote>\n<p>We also raised this same issues with BT.<\/p>\n<blockquote class=\"bq1\"><p><strong>A BT Spokesperson said:<\/strong><\/p>\n<p>&#8220;This \u201ccost of building may increase\u201d letter should only have been sent to customers who were below the USO cost threshold and thus were eligible to receive the USO build without incurring additional costs. In that case though there is a risk that actual cost, when we come to build the solution are more than the USO threshold. In that case, we will seek to continue to build up to a cost of double the USO threshold (i.e. \u00a36,800) at our expense.<\/p>\n<p>However in the event of unforeseen costs beyond that we would then go back to the customer and offer them the option of paying the additional cost or halting the build at no charge to them.&#8221;<\/p><\/blockquote>\n<p>Finally, we asked BT why their quotes failed to name the broadband technology that would be delivered (FTTC or FTTP etc.). A spokesperson for the operator said, &#8220;<em>Generally this will be via FTTP, however the USO regulations require us to build the most efficient solution that delivers the USO &#8230; In some cases the USO specification may be achievable via other technologies such as an FTTC solution. As a result when we build new fixed infrastructure for USO we cannot guarantee that it will be FTTP, though in practice we expect it will be in most cases<\/em>.&#8221;<\/p>\n<p>As much as we agree with BT&#8217;s viewpoint on this, it still doesn&#8217;t entirely explain why the operator can&#8217;t include this information on their quotes. After all, by the time a quote has been issued then the operator must have already know what technology is best to use.<\/p>\n<h3><span style=\"color: #339966;\"><strong>Conclusion<\/strong><\/span><\/h3>\n<p>Overall it&#8217;s hard not to see the USO as being a bit of a disappointment, which is partly down to its minimum speed (note &#8211; a faster speed would have created various complications with competition, <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2017\/05\/uk-broadband-stakeholders-reveals-cost-implementing-10mbps-uso.html\">high cost<\/a> and potential delivery delays), and the fact that Ofcom allowed the use of highly variable 4G mobile technology alongside fixed fibre-based methods. Making the USO faster also wouldn&#8217;t solve the existing issues with delivery (if anything, they&#8217;d get harder).<\/p>\n<p>The fact that the Government kept promoting the USO as a solution for everybody &#8211; those missed out by their other superfast and gigabit broadband programmes &#8211; certainly hasn&#8217;t helped. In fact, neither does that word &#8220;<em>universal<\/em>,&#8221; which in both cases served to create an unrealistic expectation of faster broadband speeds at no extra cost for all of the hardest to reach locations; even though it clearly can&#8217;t deliver this for everybody.<\/p>\n<p>One final point to make is that, if anything, the USO situation is helping to demonstrate just how expensive it really is to connect-up those who fall outside of the cost threshold and also how difficult it is to accurately cost such work. Even if we correct for some of the issues with BT&#8217;s quotes, such work will still be incredibly expensive to complete via fixed lines in remote areas, which is an unavoidable reality.<\/p>\n<p>As it stands the UK Government has stipulated in its legislation (Digital Economy Act 2017) that the definition of the USO speed should be reviewed when at least 75% of premises in the UK subscribe to a broadband service that provides a download speed of at least 30Mbps. Last year&#8217;s <strong><a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2019\/12\/connected-nations-2019-3-million-uk-premises-can-get-full-fibre.html\">Connected Nations 2019<\/a><\/strong> report put this figure at 59% (i.e. we don&#8217;t think it&#8217;ll hit 75% this year, but we&#8217;re getting much closer).<\/p>\n<p>Going forward it&#8217;s hoped that the Government&#8217;s plan to invest \u00a35bn to help get those in the final 20% of UK premises hooked-up to a gigabit-capable broadband service (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2020\/07\/progress-on-bduk-plan-for-5bn-uk-gigabit-broadband-rollout.html\">here<\/a>) will also help to tackle some of the aforementioned areas. Meanwhile Scotland&#8217;s R100 programme (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2020\/08\/update-on-r100-progress-in-scotland-and-possible-voucher-delay.html\">here<\/a>), the <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/welshgov\" target=\"_blank\">Welsh Government<\/a>&#8217;s Phase 2 deployment (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2020\/07\/wales-extends-bt-fttp-broadband-rollout-to-39000-premises.html\">here<\/a>) and Northern Ireland&#8217;s Project Stratum (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2020\/05\/granahan-mccourt-exits-n-ireland-superfast-broadband-project.html\">here<\/a>) should also help.<\/p>\n<div class=\"bq2\"><strong>NOTE:<\/strong> BT has published the <a href=\"https:\/\/www.bt.com\/broadband\/usoterms\" target=\"_blank\" rel=\"noopener noreferrer\">USO Network Build Terms<\/a> online, which are worth a read.<\/div>\n<p>Remember, if BT or KCOM decide you are not eligible for the USO, they should tell you about your right to challenge this decision and they should also tell you how you can complain (even though complaining might not make much of a difference).<\/p>\n<blockquote><p><strong>Ofcom Statement on USO Complaints<\/strong><\/p>\n<p>Customers have free access to alternative dispute resolution schemes. They will help resolve your issue if the complaint remains unresolved after 8 weeks, or sooner if deadlock has been reached with BT or KCOM. You do not need to be an existing customer of BT or KCOM to dispute an eligibility decision.<\/p>\n<p>Although Ofcom does not investigate individual complaints your help in highlighting problems plays a vital part in our work.<\/p>\n<p>You can <a href=\"https:\/\/www.ofcom.org.uk\/phones-telecoms-and-internet\/advice-for-consumers\/?a=96944\" target=\"_blank\" rel=\"noopener noreferrer\">complain to Ofcom<\/a> on our website, or by calling us on 0300 123 3333 or 020 7981 3040.<\/p>\n<p>If you wish to speak to us in Welsh, please contact our Welsh language line on 0300 123 2023.<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"<p>The elephant in the room of the UK Government&#8217;s broadband centric Universal Service Obligation (USO) has always been the fact that it isn&#8217;t truly &#8220;universal&#8221; and tens of thousands of premises have fallen outside of its scope. In other words, getting a minimum speed of 10Mbps can become very expensive for some.<\/p>\n","protected":false},"author":1,"featured_media":23509,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[6,1],"tags":[107,414,36,38,89,537,71],"class_list":["post-23268","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-editorial_article","category-uk_isp_news","tag-adr","tag-northern-ireland","tag-ofcom-regulation","tag-politics","tag-scotland","tag-uso","tag-wales"],"share_on_mastodon":{"url":"","error":""},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.8 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>The High Cost of Broadband for USO Excluded UK Communities - ISPreview UK<\/title>\n<meta name=\"description\" content=\"The elephant in the room of the UK Government&#039;s broadband centric Universal Service Obligation (USO) has always been the fact that it isn&#039;t truly\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ispreview.co.uk\/index.php\/2020\/08\/the-high-cost-of-broadband-for-uso-excluded-uk-communities.html\" \/>\n<link rel=\"next\" href=\"https:\/\/www.ispreview.co.uk\/index.php\/2020\/08\/the-high-cost-of-broadband-for-uso-excluded-uk-communities.html\/2\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The High Cost of Broadband for USO Excluded UK Communities - 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