Ofcom has revealed that only BT (Openreach), KCOM, Hyperoptic, Quickline and Broadway Partners have expressed a formal interest in becoming suppliers for the new Universal Service Obligation (USO), which from 2020 will make it possible for anybody in a slow speed area to request a broadband speed of at least 10Mbps.
The USO is largely expected to focus on catering for the final 1-2% of homes and businesses across the United Kingdom, which effectively reflects those that are unlikely to be served by a “superfast broadband” (24Mbps+) network come 2020 (i.e. this is estimated to be somewhere around 600,000 premises in 2020 or 900,000 if measured today).
The USO is NOT an automatic service upgrade and as such it will only give people the “legal right” to “request” a 10Mbps+ capable broadband connection, albeit only in poorly served areas where no future upgrades are planned to deliver even faster speeds within the next year (necessary to limit any potential conflict from network overbuilds).
Under the plan this obligation would be funded by ISPs (industry) via a new Universal Service Fund (USF). On top of that it will also adopt uniform pricing (i.e. cost the same no matter where you live), have a cost threshold of £3,400 (i.e. you may have to help pay for it if the costs go above this) and support demand aggregation (i.e. multiple properties in an area could help to bring the deployment cost down).
10Mbps USO Specification
* A minimum download “sync” speed of at least 10Mbps (Megabits per second).
* A minimum upload “sync” speed of at least 1Mbps.
* A medium response time with end to end latency of no more than 200ms for speech applications.
* A maximum sharing between customers (contention ratio) of 50:1.
* A minimum data allowance of 100GB.
* A technology neutrality design (can be delivered via a mix of fibre based and wireless solutions).
So far Ofcom has not finalised exactly how the new USO funding would be extracted or which ISPs could supply it. In June 2018 they set out to rectify part of that question by inviting providers to express their interest in becoming suppliers (here). Today’s update reveals who responded.
Ofcom – Responses to the June 2018 Document
We received 11 responses to the June 2018 Document. Of those respondents, 5 expressed an interest in being a Universal Service Provider:
A further 3 respondents commented on the designation process itself without expressing an interest in being designated as a Universal Service Provider, these were:
Responses were also received from Bentley Walker, OneWeb and CityFibre, none of which expressed an interest in being a Universal Service Provider nor commented on the designation process. In this document we address only comments relating to the designation process.
We will consider comments received on other matters, including the responses that suggest the Universal Service Provider should be required to utilise all existing networks in delivering the USO, in a consultation later this year which will set out proposals for formal designation of Universal Service Providers and regulatory obligations.
Nobody will be surprised to find that the existing USO suppliers of BT and KCOM are listed, although it’s good to see some smaller alternative network (altnet) providers being named, even though their coverage is comparatively small. Ofcom is known to be considering whether “different providers could be designated in different areas of the UK, or whether the designation of a single national provider would better meet our objectives.”
Hyperoptic may find it particularly tricky to deliver the USO since they predominantly cover large apartment blocks and are only present in sporadic urban areas, rather than rural ones. Suffice to say that designating based on a geographic area (the proposal is to use Local Authority boundaries) would present some challenges.
Meanwhile Broadway Partners specialise in deploying small fixed wireless broadband networks (often using TV White Space technology) and Quickline is a more traditional Fixed Wireless Access (FWA) ISP, although both could in theory install a network with wider coverage on-demand.
Ofcom’s preferred approach to designating USO providers is the direct one (i.e. a choice based on those ISPs that have formally expressed an interest), although they are also considering a competitive tender process but this would take longer and be more complicated.
The regulator has thus launched another consultation today, which will examine the issue of designation and run until 15th October 2018. Further details on the USO should be published later this year.