BT and KCOM chosen to deliver universal broadband services

Telecoms regulator Ofcom has opened a consultation (171-page / 3.54MB PDF) on its proposals, which would, if confirmed, see the companies mandated to deliver broadband services that meet the minimum standards stipulated in UK law to eligible homes and businesses. KCOM has been designated as the universal service provider for the Hull area, while BT has been designated to provide the services throughout the rest of the UK.

Out-Law.com reported last week that Ofcom's consultation was to be expected before the end of 2018.

The government announced last year that it would press ahead with introducing a universal service obligation (USO) for broadband after deciding against taking up a voluntary offer from BT to deliver universal broadband access to properties across the country. It subsequently consulted on the make-up of the USO and confirmed the details in new legislation that came into force in April this year.

The USO for broadband is made up of several components, the main feature of which is a right for property owners in the UK to have access to broadband services with minimum download speeds of 10Mbps.

"Additional quality parameters" are also mandated, including minimum upload speeds of 1Mbps, restrictions on the sharing of bandwith across customers, a duty to minimise delays in the transmission of data over the broadband networks, and a requirement to allow customers to download at least 100GBs of data every month under the service on offer.

Industry will be responsible for funding the delivery of the USO for broadband through a "cost-sharing mechanism" to be set up by Ofcom. Ofcom has the power to designate providers of the USO for broadband and has until 28 March 2020 to implement the USO. The regulator is obliged to designate which broadband providers are subject to the USO requirements and establish and administer an industry fund to compensate the 'universal service providers' for "any unfair net cost burden".

New rules setting out how the designation process came into force on 4 December. According to the new regulations, Ofcom "shall propose the designation of such persons as they consider appropriate as universal service providers". Ofcom must give the reasons for making that proposal. The regulations also provide for "alternative proposals" to be put forward by businesses, and Ofcom is obliged to consider representations made in response to its own plans, including alternatives, before finalisation its designations.

"If a consumer cannot access a decent, affordable broadband service, they may be eligible for the USO," Ofcom said in its new consultation paper. "Universal service providers will have 30 days to determine whether a consumer is eligible for the USO. As part of this process, they will have to check that: the premises is a home or business; it has no access to existing decent, affordable broadband; it will not be covered by a public rollout scheme in the next 12 months; and the cost of a connection will not exceed £3,400, as set in the legislation."

"Universal service providers will have 12 months to deliver connections to eligible consumers. A consumer should receive their USO service no later than 12 months after they place their order, unless there are exceptional circumstances which would disrupt network build," it said.

The regulator also confirmed the pricing and quality of service requirements the universal service providers will be subject to.

"Universal service providers must offer connections and services on its own network at the same price regardless of whether the consumer is a USO customer or a non-USO customer," Ofcom said. "Although most services are already charged at less than £45 a month, we are proposing to set a maximum cap of £45 a month (incl. VAT) as a further affordability safeguard."

"A USO customer will be entitled to the same quality of service as customers connected through a commercial service," it said.

According to Ofcom's plans, the universal service providers will also face performance reporting and record keeping duties. These are aimed at ensuring they can "demonstrate compliance with the conditions, and to allow any claim for funds to be properly audited and verified". Ofcom said.

Ofcom's consultation is open until 13 February 2019. It said it is "open to alternative proposals from any provider who thinks that it is better placed to deliver the broadband universal service than BT or KCOM".