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BSG analyses potential broadband USO in UK

May 4, 2017

The Broadband Stakeholder Group (BSG) has launched Impact of a Broadband USO in the UK, a report commissioned from Plum Consulting to analyse the impact of the design considerations of a potential broadband USO (universal service obligation) in the UK. This report complements the technical advice produced by Ofcom in December 2016 for Government

The Government announced in 2015 that it intended to give people the legal right to request a broadband connection that would deliver them a minimum speed of 10Mbit/s no matter where they lived through a broadband universal service obligation (USO). Last week, the Digital Economy Act was passed and confirmed this commitment but the exact specifications and funding mechanism have yet to be agreed.

The BSG is supportive of the goal of universally available, good quality broadband access. The report serves to highlight the difficulty in designing a USO that meets this goal whilst providing value for money and limiting competitive distortion.  In particular, the report demonstrates that the level at which the cost threshold is set is critical to the success of the USO, the scale of the funding needed but also the number of premises that the USO service would ultimately connect.

The report estimated what the net costs would be to deliver a broadband USO service set at 10Mbit/s and at 30Mbit/s with various levels of data usage and the outcomes possible in terms of achieving universal coverage:

The report also found that further information is needed to assess the economic benefit for each USO connection and in order to provide an accurate cost-benefit analysis, as part of the Government’s approach to designing the USO.

Richard Hooper, Chair of the Broadband Stakeholder Group, said: “This reports rightly highlights the complexity of designing a broadband USO that is both cost-effective and built to achieve digital inclusion across the country. Our report adds to the evidence base on the best way that a USO can positively contribute to the goal of universal good quality broadband and we look forward in engaging further in this debate with Government.”

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