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Lobbying body calls for Broadband Universal Service Obligation
Thursday 15 March 2012 15:19:31 by Andrew Ferguson

The House of Lords Select Committee on Communications launched a call for evidence on Superfast Broadband and the Country Land & Business Association (CLA) has taken the opportunity to highlight the need for a Universal Service Obligation to help close the digital divide in rural areas.

"The Government is moving more of its services online and has even recognised that broadband is essential to the economic well-being of rural areas. However, there is no legal requirement for the Government to deliver the basic two Mbps speed that many rural businesses currently struggle to receive.

The CLA's submission to the House of Lords Select Committee on Communications makes it clear that the rural-urban digital divide needs to be closed as soon as possible. Rural businesses have the potential to act as a dynamo for economic growth but they must be given the same tools as urban businesses to do the job."

CLA President Harry Cotterell

The current situation in the UK is that there will be a 2 Mbps Universal Service Commitment in place for 2015, as part of the BDUK led Superfast Broadband roll-outs. With solutions such as BET, Fixed Wireless, 4G and satellite services being used in the hardest to reach areas. A USC carries no legal obligation, so if a local authority decides that a property in its area, e.g. a lone property 4 miles from the nearest other property that is in the shadow of a large hill (i.e. no visibility of the Ku and Ka band satellites) they are not obliged to provide a service.

A Universal Service Obligation contains a legal requirement, and currently the only one governing internet access is the basic telephone USO, which only applies to BT (and KC in the Hull area) where they must provide a telephone to a property for the standard fixed installation price (~£120) so long as the cost to the company is under £3500. If the estimated cost to install a service to a property is above this £3500 threshold then BT would inform the customer of the likely cost, and in some cases remote businesses have paid £30,000 to get a phone line installed under the USO. The phone line needs only provide a basic 28 Kilo bits per second functional internet access service.

A Universal Service Obligation for broadband is more complex, as the BDUK projects are meant to stimulate commercial roll-outs, and forcing an obligation could scare away potential bidders, particularly if a threshold similar to the phone £3500 figure is imposed. If a USO is implemented, then the most likely implementation solution will be satellite access, which while less than perfect is adequate for most business needs, and certainly should allow rural farmers to file the mountains of e-forms they have to do.

Another danger of an imposed obligation is that it may weaken the ability for areas to push superfast services further into the last 10% of properties, as the obligation to service the final 0.1% will eat a disproportionate amount of money. So while a Universal Service Obligation is a great idea, the concern centres around where will the money come from to fund it, and who will get saddled with the obligation?

Comments

Posted by Michael_Chare over 5 years ago
I would like to see BT saddled with the USO, and I would like to see them being able to recover their costs from all terrestrial providers in some equitable way. A more interesting question to me is what speed of service should be provided. At the moment my lines is connected at 1.6mbps. The BDUK funding to increase this to 2mbps may well not make much difference.

Posted by chrysalis over 5 years ago
A USO is fine but it conflicts with ofcoms principles of budget priced broadband hence its never really happened.
Posted by AspieMum over 5 years ago
I used to get 1.7MBs but since December I can only get 0.8MBs. LLU providers should have the obligation too as they have their own equipment in the exchange and it shouldn't provide a worse service than through BT equipment. After all people don't always know its LLU when they sign up with an ISP.
Posted by herdwick over 5 years ago
An interesting one for the legal department. The phone line USO is enforceable because BT have Significant Market Power in phone line provision. A broadband USO might work in Market 1 where they are also deemed to have SMP in wholesale broadband supply, but that's hardly "universal".
Posted by Rocket_Man over 5 years ago
If the choice is anywhere from £3.5k to £30k then you'd be well advised to seek an alternative solution. Satellite services offer VoIP, VPN & SKYPE and UK IP adress. Have a look at what Avonline have to offer, it's highly competitive and gives assured speeds. www.avonline.co.uk
Posted by Michael_Chare over 5 years ago
I would say that Avonlines price of £25/pm for 4GB download at 6mbps was expensive, though there is a special offer of an 8GB limit.
Posted by ToowayDirect over 5 years ago
ToowayDirect and Tariam provide global coverage through numerous different satellites in different parts of the sky which means it’s very rare that line of site, eg. near hills, is an issue because of the variety of options we have. As a service provider we would be delighted to support the government in developing a Universal Service Obligation. As you state satellite broadband is often the only viable option in the most remote areas, which is why we are striving to drive up speed and performance and down the cost through innovation and investment. Tom Wheeler, Director, www.ToowayDirect.com
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