BT and KCOM named broadband USO suppliers

Telecoms regulator Ofcom has named BT and KCOM as the designated providers for the broadband universal service obligation (USO) – the government’s plan for every householder in the UK to be able to request and receive a basic broadband connection of up to 10Mbps, which will become a legal entitlement in 2020.

Ofcom judged a number of expressions of interest against several key criteria in coming to its decision. Providers had to demonstrate that they could adequately finance service delivery and operate it between deployment and any compensation; that their proposed coverage area contained more than 5,000 eligible homes; and that the proposed technology would meet the technical specification set out in the government’s legislation.

“We assessed eight expressions of interest against our set of criteria to inform our proposals for which providers would be best placed to deliver the USO,” said Ofcom. “Airband, Bentley Walker, Broadway Partners, Quickline and Viasat did not satisfy our minimum criteria.

“Hyperoptic did satisfy these criteria, but subsequently withdrew its interest in being a universal service provider. As a result, we propose that BT will be the universal service provider across the whole of the UK excluding the Hull area, and KCOM will be the universal service provider for the Hull area.”

Under the USO, connections will have to be delivered within 12 months of the request being made; to be built at a cost not exceeding £3,400 per property; to be made available at the same price as the rest of the UK and at no more than £45; and to provide the same quality of service as a standard commercial connection.

The two providers will also have to report on their performance and keep records to demonstrate compliance with the conditions, and to allow any claims for funds to be audited properly.

But the USO has not been welcomed by all. During its lengthy gestation, it was frequently attacked as unfit for purpose, with the Houses of Lords and Commons often at odds over the small print. Meanwhile, Ofcom worried that it would not be able to find a provider willing to take on the job, as none appeared willing to step up, although many predicted that the job would indeed end up falling to BT.

Even after the details were ironed out, the criticism continued. At a Connected Britain event earlier this year, UK Wireless Internet Service Providers Association (UKWispa) chair David Burns derided the USO as “silly” and said that a 30Mbps connection was now the minimum viable service for the vast majority of people.

Matt Powell from broadband service comparison site Broadband Genie said the USO would undoubtedly play an important role in ensuring broadband access for the final 2% of properties covered neither by commercial roll-outs nor Broadband Delivery UK (BDUK).

But he added: “The threshold of £3,400 will mean that some premises will not benefit from the USO unless they are willing to pay for costs over this limit.

“In 2016, Ofcom estimated that a £3,400 threshold for a USO of 10Mbps download/1Mbps upload would leave 60,000 premises unserved. Some communities will be able to work around this by combining their funding for a connection which serves multiple properties, but others may have to pay a significant sum over the limit or explore alternatives, such as satellite broadband.”

Ofcom is now inviting stakeholders to give their input on the proposals. The consultation process will run until February 2019.