Will the new 10Mbps USO solve the final 5% issue?

Will the new 10Mbps USO solve the final 5% issue?

Following promises in the 2015 Budget back in March, the Government has finally confirmed plans to introduce a 10Mbps Universal Service Obligation (USO) for all broadband services across the UK by 2020. With the Government already under pressure to complete the superfast broadband rollout to the final 5% of the UK’s most hard to reach communities, we ask will this latest USO help to achieve that goal or cause further issues?

17 November 2015

[caption id="attachment_135" align="alignleft" width="128"]Darren Darren Farnden, Head of Marketing[/caption] Following promises in the 2015 Budget back in March, the Government has finally confirmed plans to introduce a 10Mbps Universal Service Obligation (USO) for all broadband services across the UK by 2020. With the Government already under pressure to complete the superfast broadband rollout to the final 5% of the UK’s most hard to reach communities, we ask will this latest USO help to achieve that goal or cause further issues? Commenting on the plans Prime Minister David Cameron said: “Access to the Internet shouldn’t be a luxury; it should be a right – absolutely fundamental to life in 21st century Britain. That is why I’m announcing a giant leap in my digital mission for Britain. Just as our forebears effectively brought gas, electricity and water to all, we’re going to bring fast broadband to every home and business that wants it. That’s right: we’re getting Britain – all of Britain – online, and on the way to becoming the most prosperous economy in the whole of Europe.” Currently the UK only has a lesser Universal Service Commitment (USC) on BT Openreach which requires them to deliver the “reasonable request of any End-user“ and “data rates that are sufficient to permit functional internet access”, which can in some cases still equate to archaic dial-up speeds. The Government’s own targets were to deliver a minimum 2Mbps USC to all users in line with its superfast broadband rollout to 95% of the UK by 2018. So, how will a USO help? The big difference between a USC and a USO is that the USO is legally binding and a USC is really little more than a promise. That’s why the Government’s announcement of the faster 10Mbps USO could be the first step in solving the issue of connecting the final 5%. With a USO of 10Mbps in place, providers and Government would have to deliver at least 10Mbps to these areas in order to fulfil this obligation. Over recent months there has been a lot of speculation about how the final 5% will be connected with multiple technologies and providers suggested, including extended FTTC coverage and G.Fast from BT, satellite, altnet and mobile solutions. No decisions or consultations have been concluded as yet, which has led to speculation that the USO announcement could be somewhat of a ‘get out of jail’ clause by the Government. As satellite is already technically capable of achieving these speeds, could this be the Government’s way of announcing a win without any investment, or will it enable them to simply pass the buck to providers and push all responsibility for the final 5% on them in order to achieve the new USO? A consultation on the new USO will begin in early 2016, which will hopefully shed more light on the finer details, such as will the USO apply to all providers or just BT Openreach? Will it be based on throughput or sync speed? Will it provide 10Mbps upload as well as download speeds? - just some of the questions already being raised by industry. Will this affect the potential BT and Openreach split? If this new USO does fundamentally fall to BT and/or Openreach, how will that affect the industry’s calls and Ofcom’s decision over a potential split between the two companies? Some of BT’s competitors such as Sky have already attempted to strengthen their calls for change, stating: "This is a welcome initiative and fits with Sky's belief that the UK needs to be more ambitious in its digital infrastructure. However, it is unthinkable that Government would hand an even bigger role to BT given problems with the current roll out, its history of poor service and the risk of declining competition. An independent Openreach, freed from the control of BT, would be able to work with the whole industry to deliver the investment and innovation that the UK needs." Similarly, Virgin has called for state funded subsidies to be scrapped, opening the way to a fairer playing field of industry innovation and deployment. Ofcom is yet to announce a decision on the potential split and it will be interesting to see if the USO consultation has any impact on that decision. We agree with Sky that a separate Openreach serving the industry more freely could deliver major improvements to service and innovation and would make sense from the point of view of monitoring and controlling the effectiveness of the USO. We think the concept of a new 10Mbps USO is great news for the industry, channel and customers alike and we hope that it’s not used as an excuse by Government to pass off the responsibility of connecting the final 5% to incumbent providers who may not be able to deliver the most suitable technology. However, within the consultation next year there are a number of key factors for consideration, including the potential funding to reach this obligation’s requirements, the potential impact a USO could have on competition and new entrants within the market and, importantly, how it will be monitored and reported on by Ofcom. Have your say! Do you welcome the new 10Mbps USO or do you have concerns? Do you think this is just a way for the Government to pass the buck to ISPs to connect the final 5%? Do you think this could help or hinder the ongoing debate over the potential Openreach split? Share your opinion by leaving us a comment below. Related articles Further information [subscribe2]

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