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The policitics of the Universal Service Obligation
Friday 06 May 2016 08:11:51 by Andrew Ferguson

Minister of State Ed Vaizey MP sat before a DCMS committee three weeks ago and discussed the USO and future roll-outs three weeks ago and now a great many media outlets are covering this via their political editors, and its sometimes not clear whether the resident tech journalist has had any chance to sanity check pieces appearing.

Headlines are worded variously but plans for high speed internet being dropped, Government renegades on promises, no superfast broadband for rural areas and similar eye catching headlines are getting the attention of readers and to be frank may be giving a very wrong impression of the realities.

A lot hinges around the idea the USO consultation documents and while these sorts of documents often give hints about the eventual delivery of whatever is being discussed they are not legally binding yet, they are discussion documents. As things stand local authorities are meant to be working towards superfast coverage of 95% by the end of 2017 and most are on course, Devon and Somerset are lagging due to no phase 2 contract being signed yet but that is a different matter to the USO.

What we appear to be seeing is the fall-out from a minister being honest and not sugar coating statements, and those who have followed telecoms and broadband closely since the 1990's should be well versed in knowing that things like Universal Service Obligations are usually on-demand and carry a cost cap, e.g. the telephone USO has a cap of £3,400 above which Openreach will send an estimate for the work and you can decide to go ahead. We have always expected something similar for a broadband USO, though it may work differently e.g. satellite broadband should only cost a couple of hundred pounds to install for 99.999% of premises in the UK, but could cost a lot more for a handful of uniquely located homes and workplaces. That said we are sure many would prefer a terrestrial or fixed line broadband solution and this is where the costs become more variable and spending £10,000 to allow one person to get online becomes difficult to justify.

The belief is and it is just that since it takes time to roll-out broadband (unless you through a lot more money at employing people temporarily) is that the UK will overshoot the 95% target with access to 24 Mbps and faster and finish at around 96%. The question to all the political parties is how much money is available to totally ensure that all the final 4% can get 10 Mbps and faster and remember this is not just at the national level, there is nothing stopping individual local authorities from reaching for the golden goal of 100% superfast broadband coverage, other than the small matter of who pays for it.

Comments

Posted by TheEulerID 7 months ago
It is already the case that for all the utilities you can get with very large bills for retrospective connection. It applies to water, sewage, gas and electricity. If your house is currently "off-grid" for any of those, it can cost a lot to implement. People seem to think just because BB can be delivered down an existing wire that the economics of provision are an irrelevance. If people thought of BB as a new utility, it might be viewed differently.
Posted by sheephouse 7 months ago
Broadband isn't quite the same as other utilities (other than telephone). I don't have a sewage connection so I have a septic tank which I have emptied periodically. I don't have a gas supply, so I get gas delivered in bottles periodically. I don't have fast broadband, but periodic bulk deliveries aren't appropriate for that. With other utilities there are alternatives that don't involve the utility companies - broadband requires a connection to somewhere. It is providing that somewhere (whether it is fixed line or wireless) that is the problem.
Posted by jrawle 7 months ago
Heat, light and sanitation are essentials. *Fast* internet access is not. It's for optional leisure use, not a requirement or human right. There is an argument for internet access being essential, for accessing government services, etc. But you don't need 50Mbps for that. 0.5 will suffice. People in the middle of nowhere shouldn't expect super-fast broadband any more than a mainline station, swimming pool, shopping mall, etc. on their doorstep. If they want those, move. There's a trade-off between location and local services.
Posted by godsell4 7 months ago
@jrawle, rural folk are not asking for 50Mb either, the USO is not suggesting that either. Your 0.5Mb suggestion would no doubt become unpractial in the next 5 years of so, so we need to aim the USO higher than that.
Posted by TheEulerID 7 months ago
I think we will see around the 99% or so on the 10mbps service. There are hints that this can be done with finance and resources already available. The last 1% will be the problem (assuming satellite is not considered acceptable).

Unfortunately I rather think 0.5mbps is not going to suffice even for normal browsing as web page bloat seems to be unstoppable.

There has to be a bit of sympathy as society has changed to make BB almost essential.
Posted by gah789 7 months ago
For the 4% or whatever, the issue is not about being able to stream Netflix. Fast broadband is an enabling technology. If you want rural communities to have an economic and social base, it is necessary to find ways of delivering services and supporting employment that do not rely upon travelling ever longer distances. The NHS wants to concentrate resources at major centres, but that means sending ambulances 40-50 miles to bring people to out-patient appointments. If you can avoid 20% of such trips, the costs of health in remote areas may be significantly reduced - or the quality improved.
Posted by sheephouse 7 months ago
@jrawle if sanitation was an essential then I'd have mains sewerage. I don't, but I am able to provide my own alternative. I cannot provide my own internet due to its nature. Yesterday I had a quote for a broadband connection faster than the ADSLMax Premium I have currently (I run a small business, which by its nature has to be in the countryside). Installation minimum £2500, monthly cost £780, all + VAT and a 3 year contract
Posted by gah789 7 months ago
Practically every developed country believes that some support for BB in remote rural areas is an alternative to spending ever greater sums on public transport and other services. This is not about suburban villages in Oxfordshire but crofting communities in the Highlands and large swathes of the border area between England and Scotland or in Wales where population densities are very low and distances & topography are difficult.
Posted by gah789 7 months ago
Relying upon fixed wireless networks the cost should come in at < £1,000 per property covered for a reasonable-sized program. Our costs are much lower. For the final 1%, the total cost might be £300 million. However, this means (a) moving away from the commitment to fixed line technology, and (b) setting up contracts with lots of quite small operators. These are the real barriers to solving the problem.
Posted by rjohnloader 7 months ago
Living in a village luckily connected by microwave to high speed broadband, I fear for other villages. We could only keep a business, quoted £50,000 by BT for FTTP, because we could get them 30Mb/s. I am retired but my 4K TVis happy with my 20Mb/s for downloads and the previous 1.7 wasn't good for much at all. But the country, the traditional heartland of Tories, isn't important it seems. I'm sure that Rishi Sunak, our MP, who claimed to support rural broadband, will be able to spin this latest decision as good for the country. Odd this came out the day AFTER the local elections.
Posted by clivegsd 7 months ago
"*Fast* internet access is not. It's for optional leisure use" I don't think so. Our GP practice now uses online repeat prescription ordering, we live in a rural area so use the internet for shopping, my disabled wife uses it to keep in touch with relatives in the South of England that she otherwise would not be able to do. I do some writing for newspapers or magazines that I wouldn't be able to do otherwise. I live 5 miles from one BB exchange, 10 miles from another BB enabled exchange, I live in a house that is on the main Cumbria to the York Dales and beyond with no internet access
Posted by DrMikeHuntHurtz 7 months ago
@rjohnloader

You should be happy with your 30Mbps, a lot of other Tory heartlands (me included) barely scrape 3Mbps.
Posted by TheEulerID 7 months ago
@gah789

If you lived in Oxfordshire, you can forget the idea that the council is spending more money on buses. Indeed any money. Bus subsidies are being massively cut (things like social care for the elderly are becoming the priority).

However, there is an issue in that it ought to be possible for relatively affluent areas of the country to pay for the higher costs. Unfortunately Ofcom's uniform geographical pricing regimes rather wreck the economics.
Posted by WWWombat 7 months ago
@sheephouse
You list utilities, but then list "suitable alternatives" when normal infrastructure can't deliver. Septic tanks, bottled gas, generators: All ideas that help out, but aren't great.

Broadband is the same. Fixed line is great if it reaches, but alternatives of wireless and satellite are there to be considered.

@DrMike
That 30Mbps you are envious of (really 20Mbps) comes from one of the phase 3 pilot projects, using Airwave wireless. It is the kind of model that @gah789 is probably talking about.
Posted by WWWombat 7 months ago
@rjohn
Nothing came out just after the election. The DCMS committee was three weeks ago, and was covered back then.

The only thing that has happened is mainstream media catching on too late.
Posted by WWWombat 7 months ago
@Andrew
The belief that BDUK-superfast might reach 96% came from BT making the £129m clawback available, based on 30% takeup.

They've now increased that expectation to 33% takeup, and the accumulated clawback has increased to £258m.

Will that start getting us into the 97th percent?
Posted by jrawle 7 months ago
@sheephouse Who paid for the installation of your septic tank? I just looked up the cost: £1000-£2000 for a tank, and the same again for labour. Then you pay to empty it. I don't see why the taxpayer or other customers should pay for rural broadband installation any more than for septic tank installation.
Posted by pug205rally 7 months ago
The other element in all this is a lack of any real competition for fixed line provision in rural areas. If I or my neighbours in a small close 7-10 residents want faster broadband which due to local topology is poorly served by 3/4G then we appear to only be able to ask Openreach and cannot benchmark the price quoted its a case of take it or leave it, I cannot ask someone else. The claim of opening up access to the poles and ducts will never arrive in practice for most I suspect.
Posted by andrew (Favicon staff member) 7 months ago
@WWWombat the combination of KCOM, Gigaclear, Virgin Media and BT may see the 96% surpassed. The final few percent are not just rural crofting barns.
Posted by timandhaylea 7 months ago
I'm not an expert in civil engineering, but I am struggling to understand why it costs so much to run a fibre cable to these areas.
Posted by andrew (Favicon staff member) 7 months ago
Cost is to do the cost of the labour involved, and the income that is generated after the service has been rolled out.

e.g. under current USO if getting a phone line to a property costs £2,500 (around an extra 4 poles or so) Openreach has to absorb that cost and as they only see about £90 per year revenue from line takes 27 years before it looks economic.
Posted by Llety 7 months ago
We put in 1.2km of Openreach duct plus 7 boxes. 1500 quid for the duct, 1000 quid to put it in the ground. It does not need to be that expensive unless you have to go under/over roads.

Jrawle, I wish you a long and happy life with your broadband connection. I was not asking you to pay for mine, just don't object to me getting a usable connection.
Posted by sheephouse 7 months ago
@WWWomba - I'm not necessarily asking for fixed line broadband - wireless would be fine. But it isn't available. Satellite isn't usable as the latency is too high - OK for watching movies (which I don't need), no good for Skype or remote working (which I do). I'm happy to pay installation costs, I'm not happy to pay a heavy monthly premium once I've paid for installation.
Posted by sheephouse 7 months ago
@jrawle Of course I paid for my own septic tank (>£10,000). Who paid for your sewers? - Oh, I and other taxpayers did. Who paid for your library, hospital, roads, London Underground, etc. Oh, that's me too.
Posted by timandhaylea 7 months ago
Thanks @Andrew, but as @Llety says, around a mile of cabling installed for £2.5k.
The issue is around rural availability, so you would have to think that the majority of the dig would be in soft verges, etc. so quotes of £10k+ seem extortionate.
@sheephouse also makes a very good point that once a (fibre) line is installed, customers should only be paying for a standard FTTP service.
I don't see any issue with customers having to pay to get a service installed to a remote location, but it seems that the costs (and process) of trying to get that service is not very clear.
Posted by andrew (Favicon staff member) 7 months ago
@timeandhaylea Pricing is not clear because each one is a custom job.

The standard price is probably a reference to FTTP On Demand, since on phone USO standard monthly pricing applies, and the USO does not yet exist on broadband.
Posted by andrew (Favicon staff member) 7 months ago
Heavy data users on satellite will find themselves paying a premium, and similar can happen for 4G and fixed wireless service sometimes too, but those aren't usually BT so people are happy - or are they not?
Posted by WWWombat 7 months ago
@llety
Well done. Good to see some progress over there.
Posted by WWWombat 7 months ago
@timandhaylea
Not easy to use @llety's number (for a private installation over private land) to match with the actual cost to BT - who necessarily *do* have to go under/over roads.

Without reference to actual numbers, compare the relative needs of a rural outpost vs a suburban pocket.

For both, the cost of a cabinet is similar and the cost of getting power is similar (though some can be exorbitant, in either location). The copper connection to the PCP will be similar.
...
Posted by WWWombat 7 months ago
However, the suburban cab probably needs 300m of fibre (from the previous cab); this is one of the significant costs - perhaps 50-60% of the total. The rural one might need 10x this distance, and cost.

In terms of recouping the cost, the suburban cabinet probably supports 300+ lines - perhaps 5x as many as a rural outpost.

When costs can be 10x, but returns only one-fifth, you can see there is a huge difference in profitability.
...
Posted by WWWombat 7 months ago
So, costs for digging that fibre into place?
- Aerial fibre, strung along poles: £25/metre
- Duct in grass verge: £40/metre
- Duct in footpath: £60/metre
- Duct in roadway: £100/metre

That's where new ducting is required. In some places, ducting can be re-used, but digging will be needed to clear blockages.

Cost, and percentages of new ducting, from the BSG study:
http://www.analysysmason.com/PageFiles/5766/Analysys-Mason-final-report-for-BSG-(Sept2008).pdf
Pages 61 and A-3.
Posted by WWWombat 7 months ago
Those numbers are a long way from @Llety's £2/m - which was just for the ducting. That's the difference of doing things in the road/path/verge, commercially.

Note the BSG study also added something between £1/m and £8/m for the actual fibre cable - the bottom end being for 2 fibres/cable, the top being 280 fibres/cable. For supply to a village, somewhere around 24-48 fibres might be chosen - £3/metre.
Posted by Llety 7 months ago
I was not talking about doing things commercially. A subset of rural people can do the civil's for themselves. We are not talking about BR4N, but a few neighbours for who Openreach is the only realistic option. BT use contractions who often make hell of a mess, farmer in our case was happy for us to do the work, but BT contractors, no ******* way. Getting Openreach, to connect up after the ducting is done, well thats a whole other adventure.
Posted by alewis 7 months ago
@jrawle
"Fast internet access is not."
Rapidly becoming so; enables on-line commerce, grants isolated SME's access to wider markets.

"optional leisure use"
Tell ebay, Amazon et al that the Internet is for "optional leisure use".

"There is an argument...0.5 will suffice."
DEFRA withdraw paper applications for subsidies. Applications had to be via the internet. A 0.5mb connection is insufficient, 2mb is required. Poor coding, but a requirement that users cannot work around. As more services move on-line, your "optional leisure" internet is no longer optional, it is becoming a necessity.
Posted by Llety 7 months ago
For those who think rural broadband is a luxury, I live in an area where young people are moving out, their lives are online and there is no prospect of a viable connection in the next 3 years on the current rate of forward progress.

The other factor often missed is that much rural telco infrastructure is past the end of its life, it need replaced anyway. Aluminum cables run along the ground is not uncommon. Kept alive by frequent expensive engineer visits, its not the way to run an economy
Posted by michael_s_perry 7 months ago
Where I used to live, a small rural hamlet just 2 miles from a fibre equipped exchange, we were luck to get 1 Mbps. The local farmers found that far too slow to cope with the filing of EU-required paperwork about farm payments. Three of the many forms are over a hundred pages long and require additional supporting documentation. The total package can easily exceed 100Mbs of data. Without a fast broadband connection that can take a very long time to upload - expecially in busy periods for the backbone.
(More Follows)
Posted by michael_s_perry 7 months ago
(Contd)
In some areas, satellite broadband doesn't work because of trees and cliffs. They need FTTC at least. It should be made available to all and not be based on a request and extremely high costs of installation.

Many people live in such rural areas because of the nature of their employment. Others moved there long before the internet was invented. They should not be penalised for where they live.
Posted by andrew (Favicon staff member) 7 months ago
Maybe the Government has listened to those saying FTTC is not a rural broadband solution and thus discounted it. Same trees would obviously block all wireless and mobile options too, leaving FTTH and then the question is how much do you spend to increase speeds
Posted by WWWombat 7 months ago
@llety
Sorry - I knew you were doing things non-commercially; I wasn't clear in stating that your cost was indeed non-commercial, while the road/path/verge comparison /was/ commercial.

Presumably if Openreach provided you the duct to install yourselves, they are at least willing to fill it with something, sometime. Preferably before it fills itself with silt.
Posted by WWWombat 7 months ago
@Llety's comment on the migration of the younger generations out of the rural area is true - and not just limited to those. The same happens with families, with kids needing access for homework.

And, of course, people moving out are not getting replaced by people moving in.

A lack of internet in rural areas is doing the same now, as a lack of jobs caused migration to the cities 200 years ago.

If we want vibrant rural communities, they need support - and internet is one aspect.
Posted by damien001 7 months ago
the problem is those who don't have broadband want the others to pay for it, there should be a small amount of funding. Only when there clear return on investment i.e. boost to local economy should extra funding be given. That said fundamentally you don't need more than 2 meg. if people want more move.

In the city we have to put up with pollution, congestion, noise the list goes on. I love going back home to country yes the internet not as fast (aboout 3 megs on a good day) but it does the job. We did not have that until they installed fibre near by
Posted by damien001 7 months ago

So if people think there should be a £1 monthly charge to help people who live in slow spots what about a monthly charge for people in the countryside to help fund solutions to cut pollution, noise ect in the cities. Life is about pro and cons.
Posted by sheephouse 7 months ago
If you don't like pollution and noise in the cities why don't you just move. Of course you'll give up public transport, libraries, hospitals, sewerage, gas, etc - and of course any chance of a usable broadband connection - but apparently you think that's better than asking taxpayers to fund public services so should be quite acceptable to you.
Posted by damien001 7 months ago
and that my point want good broadband that bad move. if tax payers or broadband user going to be expect to pay to cover the cost of providing high speed to diffucult areas then its only fair to expect there be funding to target problems in cities.

I pay enough for my broadband, and quite happy with what I get down in cornwall. And on the subject of sewage the set up we have in cornwall is great, we don't pay anything for sewage, we have asystem that breaks it down another benefit for living not in the cities.
Posted by sheephouse 7 months ago
There is nothing technically difficult in providing broadband in my (and many similar) areas. If ADSL2 were installed I'd get 17Mbps. The problem is an expectation of a high ROI, and a 20% profit margin. I have no problem paying toward infrastructure (wherever it is). I have a problem with being denied it because a commercial company can't make 20% profit from providing it.
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