UK broadband update August 2016

Ofcom has published a summary of responses to its consultation earlier this year on the design of a broadband universal service obligation (USO) for the UK.

Almost all respondents strongly supported increasing the coverage and quality of UK broadband services, although there were different views on how this should be achieved. Ofcom broadly categorised the responses it received into two groups: those that advocated a more highly specified universal service for all, with the cost of such interventions a more secondary consideration, and those that recognised the need for a safety net to complement existing public- and private sector-led broadband deployments. Responses in this second category did not necessarily consider that a USO was the best means for providing such a safety net.

Views on how the USO should be funded were mixed (options include public funds, a levy on industry, or a combination of the two) and few industry stakeholders expressed a willingness to become a designated USO provider:

• BT said it was difficult to identify how the USO provider could be designated before the specification and scope of the USO is decided (BT also announced a trial of Long Reach VDSL in the Outer Hebrides this month; the technology offers the potential to significantly boost speeds over the long lines often found in rural areas). BT also referred to previous public statements that it is able to deliver 10Mbit/s coverage universally on a voluntary, commercial basis as part of a ‘universal service commitment’, subject to Ofcom making specific changes to the regulatory environment.
• Virgin Media suggested that the case for a broadband USO has not yet been adequately made, but that if a USO was deemed necessary, BT should be the designated USO provider.
• Mobile operators indicated that the USO should be an obligation for fixed providers only.
• Satellite providers indicated satellite broadband could be part of a solution.

Ofcom will provide its final advice to Government by the end of 2016, setting out a range of options for the design of the USO.

Other UK broadband news and developments this month:

• The Local Government Association criticised advertised broadband speeds which are only available to 10 per cent of customers as "misleading" and failing to reflect the experience of many users, particularly those in remote rural areas. Its announcement came as part of its Up to Speed campaign for faster broadband for all UK residents and businesses.
• Point Topic reported on a survey of companies that benefitted from the Government’s Connection Vouchers Scheme, undertaken for the Greater London Authority by Adroit Economics with support from Point Topic, The Fifth Sector and the University of Manchester. The use of faster broadband by London’s small and medium-sized enterprises (SMEs) will enable them to generate £2bn additional sales within the first two years, 32,000 new jobs and to achieve just under £1bn cost savings. Approximately 480 firms took part in the survey and of the respondents that answered, 50% said that faster broadband had a transformational impact on their business.
• ISP Review reported on the Government’s new Broadband Investment Fund (more background here), which aims to help alternative network providers to secure funds for building new ultrafast (100Mbit/s+) broadband infrastructure. Whilst it is anticipated that the technological focus of the Fund is likely to be on fibre, there is scope to invest in other broadband technologies where appropriate, which could include wireless or Fibre to the Cabinet (FTTC) type solutions under certain circumstances.
• Audit Scotland published a progress update on the broadband roll-out in Scotland: 2.2 million out of 2.6 million premises across Scotland had access to fibre broadband (86 per cent) by March 2016 – 1 per cent more than the Scottish Government’s original target. More than 500,000 of these gained access through the contracts let by the Scottish Government and Highlands and Islands Enterprise (HIE). However, extending coverage to the most rural areas remains a challenge and there still much to be done if the Scottish Government is to achieve its vision of a world class digital infrastructure.