{"id":24303,"date":"2020-10-09T07:57:46","date_gmt":"2020-10-09T06:57:46","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=24303"},"modified":"2020-10-09T12:09:25","modified_gmt":"2020-10-09T11:09:25","slug":"government-pledges-to-help-tackle-huge-broadband-uso-quotes","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2020\/10\/government-pledges-to-help-tackle-huge-broadband-uso-quotes.html","title":{"rendered":"Government Pledge to Help Tackle Huge Broadband USO Costs UPDATE"},"content":{"rendered":"

The UK Government’s Digital Minister, Matt Warman, has called on Ofcom<\/a> and BT<\/a> to find a “resolution<\/em>” to the situation with the new Universal Service Obligation (USO) for broadband, which results in some homes being quoted tens or even hundreds of thousands of pounds to get a 10Mbps+ capable ISP connection.<\/p>\n

The USO is supposed to mean that those who live in an area where download speeds of at least 10Mbps (1Mbps upload) aren\u2019t achievable now have the \u201clegal right<\/em>\u201d to \u201crequest<\/em>\u201d a 10Mbps+ capable connection from BT<\/a> (or KCOM<\/a> if you live in the Hull area), excluding areas that are due to benefit from a \u201cpublicly funded broadband rollout plan within the next 12 months<\/em>\u201d.<\/p>\n

NOTE:<\/strong> See our March 2020 Summary of the 10Mbps Broadband USO for more<\/a>.<\/div>\n

A cost threshold of \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\u2019t have to pay for this work to be done. However, if it costs more than that to connect your home, and you still want a connection, then you can optionally choose to pay the proposed excess costs or forget it.<\/p>\n

The USO’s design has always recognised the reality that some areas, reflecting tens of thousands of UK premises, will be massively expensive to upgrade and thus unlikely to ever be covered by the USO. Back in August 2020 we wrote an extensive article on this problem (high USO costs examined<\/a><\/strong>), which saw one home being quoted as much as \u00a31.1m<\/strong> for an upgrade (most in this group will get quotes in the tens of thousands).<\/p>\n

The fact that such “eye-watering<\/em>” costs exists is no surprise and reflects the reality of trying to build a new fibre network to cater for an area where not even mobile signals can reach (the focus on full fibre means these quotes are usually for FTTP<\/a>). Nevertheless, our previous article found some significant inconsistencies in BT<\/a>’s USO quotes (based on Openreach<\/a>’s data) and their processes, as well as plenty of mixed messaging. The good news is that these issues have now caught the attention of parliament.<\/p>\n

Matt Warman, UK Digital Infrastructure Minister, said:<\/strong><\/p>\n

“I\u2019d now like to turn specifically to the issue of high quotes that have been received by some customers from one the Universal Service Providers.<\/p>\n

Many people who have been waiting patiently for the eventual launch of the USO have written to me to express their disappointment and a feeling of unfairness about the way that quotes have been calculated.<\/p>\n

They are rightly surprised as to why one household is to be expected to foot the bill for a piece of infrastructure that may well benefit many of their neighbours as well. I will elaborate on some of their concerns for the benefit of the house.<\/p>\n

It would appear that initially USO applicants were routinely being asked verbally for six figure sums without further information or context, which created great confusion. I understand that more information is now being provided, after discussion with Ofcom<\/a>.<\/p>\n

In some cases – such as one correspondent from the constituency of Burton – contributions for costs in excess of \u00a350,000 were requested, when the neighbouring community was already connected to fibre.<\/p>\n

Some of the quotations are eye-watering, in many cases beyond local average incomes and in the case of one quotation in the constituency of Copeland, substantially more than the average house price in the area.<\/p>\n

Another correspondent from the Staffordshire Moorlands constituency was unable to understand why her quote under the USO was essentially the same as a previous quotation from Openreach<\/a> under a community partnership scheme, to cover the entire community.<\/p>\n

…<\/p>\n

When this issue was brought to my attention, I was equally as surprised. While I cannot promise that every quote received by customers will be lower than the cost threshold, I believe every quote should be calculated in a fair and transparent manner.<\/p>\n

When we legislated in 2018 to introduce the USO, we included provisions that require Ofcom<\/a> to ensure that, when calculating the cost of providing a broadband connection to a particular location, due account is taken of the extent to which the cost may be shared between multiple locations.<\/p>\n

Whilst some of the premises eligible for the USO are extremely remote – I\u2019m aware of an initial quote of over million pounds for an island community with no subsea cable – and constructing new networks to reach them will always be expensive, many of the eligible premises are close to other neighbours who are also eligible, and as my honourable friend\u2019s constituents have likely indicated, would reasonably expect costs to be shared and fairly distributed.”<\/p><\/blockquote>\n

In response Warman has written to Ofcom’s CEO, Dame Melanie Dawes<\/strong>, to outline his concerns and called on them to find a “resolution<\/em>” with BT. “I have been assured that Ofcom and BT remain in discussions about the most appropriate way to move forward, but I want to reassure members that customers who either get a quote from BT or proceed on the basis of a quote that has been provided, will not be at a disadvantage should a resolution be found as a result of these discussions<\/em>,” added the MP.<\/p>\n

The regulator itself is currently understood to be “seriously considering enforcement action<\/em>” against BT, although it’s important to understand that there are some very real cost barriers here that cannot simply be swept aside by good intentions. Many of the problems tend to stem from the difficulty of accurately estimating the cost of deployment in such remote locations, but even if you improve that side then the cost itself remains a key obstacle.<\/p>\n

The USO is an industry funded scheme and, unless the USO rules are changed and significantly more funding found, then there will still be areas where the cost of delivery is going to be unaffordable for some homes (i.e. those who live in some of the remotest parts of the UK). The Government’s future \u00a35bn programme may help to resolve some of this, but that too will no doubt have its “value for money<\/em>” focused limitations to consider.<\/p>\n

A BT Spokesperson said:<\/strong><\/p>\n

“We recognise that expensive USO quotes have come as a shock and we want to improve how we communicate costs to customers. We\u2019ve listened and are working hard to enable communities to be able to share the costs of an USO connection. We will launch this as soon as possible as we know it will help drive down costs for individuals.<\/p>\n

For some communities, even if they share the costs, the price will remain out of reach. The USO scheme will deliver for the vast majority without decent connectivity and we can connect 400,000 of these properties using 4G<\/a>. For properties we can\u2019t reach over 4G<\/a> we are already in the process of building connections to 4000 premises through the USO scheme. However, it does not overcome the challenges of connecting the most difficult places which represent 0.5% of the country.<\/p>\n

We strongly believe this needs to change – alongside the existing USO programme, we need a new plan for the hardest to reach. This has to be a shared endeavour, across industry and with Government and Ofcom. We\u2019d like to see a task force set up, with cross-party support and use our experience and expertise to find a new solution. Options could include alternative technologies, such as satellite<\/a> (including exploration of the potential role of OneWeb<\/a>) as well as clarity on the Government\u2019s \u00a35bn funding for rural full fibre.”<\/p><\/blockquote>\n

At this point some people often like to point towards the many alternative network ISPs that could help deliver the USO, such as by using more cost-effective technologies in rural areas (e.g. fixed wireless networks). But it’s important to remember that so far none of those have been willing to take on the significant legal and financial burden of delivering such an obligation.<\/p>\n

Going forward it’s possible that the new generation of low latency LEO based satellite<\/a> broadband networks, such as from SpaceX (Starlink<\/a>) or OneWeb<\/a>, might be able to help plug the gap, but so far neither has announced any solid packages or solutions for tackling rural homes in the UK.<\/p>\n

In the meantime, Matt Warman said he “hopes to see progress on this important issue in the near future<\/em>.”<\/p>\n

UPDATE 12:08pm<\/strong><\/p>\n

We’ve added a comment from BT above.<\/p>\n","protected":false},"excerpt":{"rendered":"

The UK Government’s Digital Minister, Matt Warman, has called on Ofcom and BT to find a “resolution” to the situation with the new Universal Service Obligation (USO) for broadband, which results in some homes being quoted tens or even hundreds of thousands of pounds to get a 10Mbps+ capable ISP connection.<\/p>\n","protected":false},"author":1,"featured_media":23840,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1],"tags":[474,56,414,36,69,38,89,537,71],"class_list":["post-24303","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uk_isp_news","tag-bt","tag-fttp","tag-northern-ireland","tag-ofcom-regulation","tag-bt-openreach","tag-politics","tag-scotland","tag-uso","tag-wales"],"share_on_mastodon":{"url":"","error":""},"yoast_head":"\nGovernment Pledge to Help Tackle Huge Broadband USO Costs UPDATE - ISPreview UK<\/title>\n<meta name=\"description\" content=\"The UK Government's Digital Minister, Matt Warman, has called on Ofcom and BT to find a "resolution" to the situation with the new Universal Service\" \/>\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\/10\/government-pledges-to-help-tackle-huge-broadband-uso-quotes.html\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Government Pledge to Help Tackle Huge Broadband USO Costs UPDATE - 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