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Ofcom details options for new UK universal service obligation for broadband

As little as 5% of homes and businesses in the UK could benefit from the introduction of a new universal service obligation (USO) for broadband, according to one of two options outlined by telecoms regulator Ofcom.

Ofcom was tasked by the UK government with submitting a report containing "technical analysis and recommendations to support the design of the USO" before the end of 2016, after the government late last year set out its intention to deliver a new USO for broadband.

In that report (107-page / 1.21MB PDF) now published, which follows a consultation with stakeholders earlier this year, Ofcom has outlined a number of options for how the USO for broadband could be implemented by the government. It proposed two possible options regarding the scope of the new USO.

Under one option, the USO for broadband would apply to every home and business in the UK.

However, according to the second option, which Ofcom said would ensure the "intervention is proportionate", only those premises that do not already have access to "decent" broadband services would be eligible for services to be delivered under the USO.

Ofcom said that a "decent" broadband service should initially be defined as one capable of delivering download speeds of 10 Mbps. However, it said that could change over time in line with "consumer needs". Under its second option, the USO for broadband would only apply to the 5% of premises that do not currently have access to broadband services capable of delivering download speeds of 10 Mbps.

In November last year the UK government announced plans to give homes and businesses a "legal right to request a connection to broadband with speeds of 10 Mbps, no matter where they live", by the end of the current parliament in 2020.

In its report, Ofcom said the government could deliver this by mandating a "standard broadband service" only, where download speeds of 10 Mbps are possible, but not guaranteed. It said a broadband speed of 10 Mbps "is sufficient now to allow multiple users to simultaneously use the internet, including web browsing, video streaming, video calling and gaming".

As part of Ofcom's report, it also considered two further options for a more advanced USO for broadband.

The first advanced option would be a "more highly specified standard broadband service", with data caps specified, along with latency requirements and other technical requirements.

A second advanced option would involve the setting of an enhanced USO in accordance with technical specifications that would class the services made available to users as 'superfast' broadband.

Under that option, homes and businesses would be given a right to access broadband services with download speeds of at least 30 Mbps, with guaranteed speeds of at least 10 Mbps. Upload speeds of 6 Mbps would also have to be possible, along with fast response times, and an unlimited data use cap would apply.

A mix of technologies would need to be used to deliver the USO for broadband to "address different local circumstances", Ofcom said. These could include fibre to the cabinet (FTTC), fibre to the premises (FTTP), fixed wireless and mobile, and satellite technology, it said.

Ofcom's proposals also look at how a new industry fund could be established to deliver the USO for broadband, in line with the EU Universal Services Directive (USD). Such a fund is favoured by the UK government. Ofcom's proposals looked at how internet service providers (ISPs) might be compensated for any "unfair net cost burden" on them as a result of a new USO for broadband being introduced.

Ofcom said: "The USD requires any industry fund to be transparent, non-discriminatory, proportionate, and cause the least market distortion. It defines ‘least market distortion’ as meaning the costs should be recovered in a way that minimises the impact on end-users of communications services, and suggests this could be achieved by spreading costs as widely as possible. This would be the guiding principle for any fund design."

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