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Government rejects BT's offer and makes broadband USO legal right

The government announces it will make high speed broadband a legal right, thereby rejecting BT’s offer to deliver the 10Mbps Universal Service Obligation broadband service across the UK on a voluntary basis

The government has decided to put universal high speed broadband on a legal footing, going for a regulatory approach instead of BT’s voluntary offer to deliver the Universal Service Obligation (USO).

The decision means everyone in the UK will have a legal right to access broadband speeds of at least 10Mbps by 2020 as set out in the Digital Economy Act.

In July 2017, telecoms giant BT made a formal offer to become the designated universal service provider (USP) for the USO, something which would have cost BT between £450m and £600m. 

At the time, culture secretary Karen Bradley said the government “warmly welcomed BT’s offer” and would consider BT’s offer alongside the lengthy consultation on the USO. 

However, Bradley announced 20 December that the government did not feel the offer was strong enough to take the regulatory USO “off the table”.

“We know how important broadband is to homes and businesses and we want everyone to benefit from a fast and reliable connection,” she said.

“We are grateful to BT for their proposal, but we have decided that only a regulatory approach will make high speed broadband a reality for everyone in the UK, regardless of where they live or work.”

Commenting on the government’s announcement, a BT spokesperson said it respected its decision, and will continue to work closely with government, Ofcom and industry to “help deliver the regulatory USO”.

“BT and Openreach want to get on with the job of making decent broadband available to everyone in the UK, so we’ll continue to explore the commercial options for bringing faster speeds to those parts of the country which are hardest to reach,” the spokesperson said.

“We look forward to receiving more details from the government outlining its approach to defining the regulatory USO, including the proposed funding mechanism.”

Need for speed

Under the regulatory approach, the service will exist as a safety net, meaning that a 10Mbps service will be available to everyone to request from 2020, regardless of where they live.

The regulatory approach also means minimum speeds can be increased over time, and the government said this will provide “for greater enforcement to help ensure household and businesses do get connected”.

BT’s approach, on the other hand, would have seen Openreach proactively build the network infrastructure to connect the majority of premises, rather than waiting for it to be done on request.

At the time, BT said its approach would mean that many of the premises covered by the USO would receive broadband speeds higher than 10Mbps, and that those covered would receive connections more quickly than can be delivered under a regulatory approach.

Read more about the USO

The USO speed has been a thorny subject. In February, the House of Lords called for the government to increase the minimum speed from 10Mbps to 30Mbps – 20Mbps higher than the 10Mbps the government has said would be sufficient.  

Jonathan Mendelsohn, shadow minister for business, energy and industrial strategy, and shadow minister for international trade, introduced an amendment to the Digital Economy Bill, calling for a 30Mbps USO while the bill was making its way through the House of Lords, which was approved. 

However, in the period before the general election in June, the amendment was struck down by members of Parliament (MPs) in favour of the original 10Mbps option. The next steps for government is to set out a design for the legal right to be introduced in secondary legislation in early 2018.

Commenting on the government’s decision, Matthew Hare, CEO of Gigaclear, said he welcomed the government’s decision to reject BT’s proposal. However, he added that although 10Mbps is a “sensible basic threshold, providers should be given the opportunity to provide faster speeds”.

Read more on Telecoms networks and broadband communications

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