BT

BT calls for change as Ofcom launches USO investigation

16 October 2020 | Melanie Mingas

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BT has called for a new plan for rural and remote connectivity in the UK after Ofcom launched an investigation into its compliance with universal service obligations (USOs).

Announced on 15 October, Ofcom’s investigation will assess BT’s USO around broadband provision, with the findings scheduled to be published before the end of this year.

Confirming the investigation, Ofcom said: “While the cost of some connections will be high due to the remoteness of many of these premises, we are concerned that BT may not be complying with the regulatory conditions correctly where it assesses excess costs for a given connection. This could result in some customers’ quote for a connection being higher than necessary.”

Stating its disappointment with the decision, BT said that alongside the existing USO programme, a new plan is needed for the hardest to reach.

A spokesperson told Capacity: “We strongly disagree with Ofcom’s assessment of our delivery of the USO. We are disappointed that they have opened an investigation when we’re fully committed to working with both Ofcom and the government to find better ways to connect the hardest to reach. We are obliged to send USO quotes to customers when they request them and appreciate that for the most remote properties some of these can be unaffordable. We’re working hard to enable communities to be able to share the costs of an USO connection to help drive down costs for individuals. We will launch this as soon as possible.”

The spokesperson continued to explain that “for some communities”, even when costs are shared the price remains out of reach. BT said it can connect 400,000 properties that do not current have “decent connectivity”, using 4G. For properties where this isn’t suitable, BT said it is “already building connections to 4,000 premises through the USO scheme”. However, that means the USO scheme leaves 0.5% of the country without coverage, are BT said are “the most difficult places” to connect.

“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’d 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 (including exploration of the potential role of OneWeb) as well as clarity on the Government’s £5bn funding for rural full fibre.”

The British government introduced legislation around USOs in March of 2018, giving homes and businesses across the country the right to request “a decent broadband connection”.

Ofcom outlined three criteria and named BT, KCOM and Hyperoptic and having satisfied these. Hyperoptic subsequently withdrew its interest and BT was proposed as the universal service provider across the whole of the UK excluding the Hull area, with KCOM appointed for the Hull area.

The proposal was confirmed in December 2018, designating BT a Universal Service Provider and imposing regulatory conditions around USO connections to eligible consumers.

The objective was to ensure customers could request a USO connection from BT if they could not currently receive “affordable broadband services with speeds of at least 10 Mbit/s and upload speeds of at least 1 Mbit/s”, among other technical parameters.

For BT this meant that once a request was received it should assess the costs of providing that connection and, where this is less than £3,400, the regulation stated that BT must provide the connection. In scenarios where the assessed costs exceed that amount, Ofcom said “BT must also provide the connection if the customer is willing to pay the excess costs”.

As required by the legislation, BT must account for the potential for costs to be shared among other customers who could use the same infrastructure. BT was told it must apply this methodology to calculate the costs of each requested connection.