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Fast broadband for all? The new Universal Service Obligation

Posted: 16/06/2020

What is the Universal Service Obligation (USO) for broadband?

Since 20 March 2020, the USO has provided a new right (which the UK Government describes as a “safety net”) to every eligible home and business to request a decent and affordable broadband connection from BT (or, for properties in Hull, KCOM).

The Government defines a decent connection as one that delivers 10 megabits per second (Mbps) download speed and 1 Mbps upload speed. Telecoms regulator Ofcom has defined an affordable connection as one that costs £46.10 per month or less.

In December 2019, Ofcom estimated that approximately 155,000 premises (0.5% of UK premises) would potentially be eligible for the USO, taking into account fixed-line and wireless connections.

How does the scheme work and is there a cost?

Those who believe they may be eligible for the scheme should check the relevant provider’s website: linked here for BT or here for KCOM (in Hull).

A home or business’ eligibility is based on the following criteria:

Once BT or KCOM has received an application, they will have 30 days to confirm whether or not the applicant is eligible and how much it will cost to build the connection. If it will cost more than £3,400, and the applicant still wants the connection, then the applicant must pay the excess cost. If an applicant wants to proceed, BT or KCOM should conduct a full survey and provide a quote for the costs within 60 days of an application being received.

Once connected, beneficiaries pays the same price for the new broadband service as anyone else on the same package, with a cap of £46.10 per month.

How long does it take to get connected?

Ofcom has set standards for delivery on requests for connections:

  • BT must deliver at least 80% of connections within 12 months, 95% within 18 months and 99% within 24 months of the confirmed order under the USO; and
  • KCOM must deliver a connection no later than 12 months after someone places their order under the USO (unless there are exceptional circumstances that make it more difficult).

Opinion: will the USO deliver?

Whilst Ofcom reported as recently as December 2019 that only 54% of premises had taken up superfast broadband UK-wide, compared with 94% of premises that had access to a potential connection, it seems, at least to the writer, that the technological and policy landscape has changed significantly, particularly in recent months, with a paradigm shift since Covid-19 forced the closure of almost all businesses’ physical offices and increased the demand for home working connectivity and streaming services.

The Government first published “A New Broadband Universal Service Obligation Consultation” in March 2016. There was, even then, a concern that the 10 Mbps speed would be outdated by the time the USO came into force.

For those who do not currently have access to decent and affordable broadband the USO offers some hope of obtaining broadband, which would give them real access to the online world. However, in light of the shift towards home and flexible working, will 10 Mbps download and 1 Mbps upload really be sufficient?

The Digital Economy Act 2017 sets out two mechanisms that enable the UK Government to initiate a review of the USO:

  • A discretionary power that allows the Secretary of State to direct Ofcom to review the USO at any time (after consulting with Ofcom).
  • A requirement that the USO be reviewed when the uptake of superfast broadband (30 Mbps or more) reaches at least 75% of UK premises.

How the USO changes over time, and whether it proves to be of material use to those struggling without access to a decent and affordable connection, remains to be seen.

This article has been co-written with Matthew Letts, a paralegal in the commercial dispute resolution team.

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Penningtons Manches Cooper LLP