UK broadband update August 2017

More USO developments: further to last month’s update, Ofcom published an update to its estimated costs of the different broadband universal service obligation (USO) scenarios set out in its December 2016.report to government. Rather than precise figures, these figures represent preliminary estimates of the order of magnitude of each scenario’s cost, and what drives those costs, to inform policy development. The new update also includes modelling for an additional technical broadband scenario, based on a download speed of 20Mbit/s with 2Mbit/s upload. Also see commentary from ISP Review.

Ofcom also published a further consultation in relation to its Wholesale Local Access (WLA) market review (also see this update from March 2017), setting out how Ofcom intends to amend its charge control proposals in the light of the additional costs BT would incur if its recent offer to deliver the broadband USO was to be taken forward. Again, see commentaries from ISP Review and ThinkBroadband, which also published an analysis of the size of the proposed BT USO footprint.

The Telegraph reported comments by TalkTalk chief executive Tristia Harrison that BT’s USO offer is "legally questionable"  and will be “more complicated and more expensive to implement than it may at first appear”. BBC News and ISP Review reported that the Scottish Government had written to the Department for Digital, Culture, Media and Sport (DCMS) in the light of BT’s offer, warning that its acceptance would risk extending BT’s monopoly in rural areas. A study by the University of Aberdeen called for the Government to prioritise delivering superfast broadband to the final few in rural communities across the UK or risk many homes and businesses without an adequate connection falling further behind urban areas by being excluded from access to services in future. uSwitch reported the Country Land & Business Association's (CLA) opposition to BT’s proposal; it argues that a right to broadband access should not be replaced by a deal with a single provider.

More on duct and pole access: also in relation to its WLA market review, Ofcom published a further consultation on duct and pole access, setting out detailed pricing proposals on the setting of rental charges, the financial limit for the recovery of network adjustment costs, and changes to regulatory financial reporting requirements. Duct and pole access is a key part of ensuring “a strategic shift to encourage the large-scale deployment of new ultrafast broadband networks, including fibre direct to homes and businesses“. Also see this previous Ofcom press release from April 2017.

Ofcom publishes 2017 Communications Market Report: Ofcom’s extensive annual review of the markets it regulates found that eight in ten adults in the UK (79%) – or 40 million people – use catch-up technology such as BBC iPlayer, or subscription services such as Netflix, to watch multiple episodes of a series in one sitting. Factors driving this trend include the availability of faster home internet speeds, a rise in the number of connected TVs and increased take-up of smartphones and tablets. In June 2016 44% of broadband connections were superfast offering speeds of 30Mbit/s or more, up from 38% the previous year. Nearly two-thirds of mobile subscriptions were enabled for 4G, up from 46% in 2015. More than seven in ten consumers now own a smartphone. See this previous post for details of Ofcom’s 2016 CMR; also see Ofcom’s 2016 Connected Nations Report for further analysis of fixed and mobile broadband connectivity.

More on consumer broadband: Which? published further analysis as part of its Fix Bad Broadband campaign, finding that consumers are receiving significantly slower broadband speeds than anticipated: the faster the expected speed, the bigger the expectation gap between what consumers thought they should receive and actual speed recorded in broadband speed tests. uSwitch published new research showing that 83% of broadband users have experienced reliability issues during the last 12 months: “Slow loading pages was a particularly common issue, with 71% citing this as a problem, while 67% were unhappy with their internet disconnecting. Meanwhile, 63% complained about buffering and 54% reported crashing.”

Other developments this month:

• The government published its latest Broadband Performance Indicator: 4,551,226 premises had a superfast broadband service made available by the end of June 2017 as a result of Broadband Delivery UK (BDUK)-supported projects.
• The Government launched a new consultation on proposals to implement 100% business rates relief for new full fibre infrastructure, as announced in the 2016 Autumn Statement.
• ISP Review reported that a leaked copy of Openreach’s consultation document on the large-scale deployment of full fibre broadband, which could cover up to 10 million premises by around 2025, sets the cost of such a deployment as being between £3bn and £6bn.
• The Mayor of London, Sadiq Khan, announced a package of measures to boost digital connectivity across the capital and tackle London’s areas of poor connectivity, including the appointment of a troubleshooting ‘Not Spot Team’ and proposals to provide mobile coverage on the underground (also see this previous post).
• Industry body techUK' published From Good to Great: Digital Connectivity for a World Class Economy, a new report setting out its “vision to transform the UK’s communications infrastructure to ensure every British business can become a digital business and create an open digital economy that works for everyone.” The report calls for “near-universal availability of superfast, and at least 90 per cent availability of ultrafast to both business and household premises driven by clear market demand”, together with “widespread geographic coverage by mobile, fixed, Wi-Fi, satellite, Internet of Things-specific networks, and early 5G commercial deployment.”
• The Financial Times reported on the recent significant investment in UK broadband by alternative network (altnet) providers: “in the past three months, some £500m worth of equity and new debt has been invested in companies installing small alternative networks”. Major altnet providers include Truespeed Communications, CityFibre, Gigaclear, Community Fibre and Hyperoptic.