BT's compliance with broadband USO under investigation

Concerns have been raised about the high quotes that customers are receiving to connect their broadband to minimum speeds of 10Mb.

Ofcom say they are concerned BT is not complying with their obligation to consider whether other nearby customers would also benefit from installations.

BT refuted the claims, and the investigation is expected to be complete by the end of the year.

Source: Ofcom

Regulatory breaches

The investigation centres on whether BT is breaching their regulatory obligations by failing to assess the costs of connections properly.

Once BT have assessed a USO request, if the costs of installation are less than £3,400 then BT must install that connection themselves.

If the costs are more than £3,400 then BT should provide the connection if the customer is willing to pay the excess amount.

However, within the legislation there are rules about how those excess costs should be assessed, specifically whether the costs of an installation could be shared by multiple customers who would all benefit from the same infrastructure.

In remote hamlets, for example, excess costs among a group of a dozen homes could be much more affordable for customers than if the quote was simply for one home by itself.

Ofcom is gathering evidence and will report back on their findings and next steps by the end of 2020.

BT's response

In response to Ofcom's announcement, BT have strongly disagreed with the reasons for the investigation and defended their position.

They say they consistently work with the regulator and the Government to help connect homes that are hard to reach, but they're concerned about the challenges of the most difficult places to reach which account for 0.5% of the country.

On the specific allegation of high quotes, BT say they will soon launch a scheme to enable communities to share the costs of a USO installation that will lower costs for individual customers.

Yet they warn the prices will still remain too high for some customers, and they argue a new plan is needed for the properties that are hardest to reach.

According to BT, they are already building USO connections to 4,000 premises and there is the potential for 400,000 to be connected via 4G services rather than fixed line broadband.

What is the USO?

The USO came into force in March 2020, giving customers with poor broadband the power to request a connection of 10Mb or more from BT or KCOM (in Hull).

It followed years of wrangling between the regulator and broadband companies, with a group of ISPs launching a legal challenge in 2017 to stop BT taking on the USO voluntarily as they had proposed to do.

The ISPs argued BT's voluntary proposal would undermine the broadband market and increase the dominance of BT and Openreach.

Ultimately, however, the Government and Ofcom negotiated a legally binding agreement with BT and KCOM, which brings us to this current investigation about whether BT are living up to their end of the bargain.

We're eight months into the USO, long enough for trends to begin to show themselves, and there have been multiples reports in the media about USO quotes running into the tens and hundreds of thousands.

In practice, BT is right about the financial difficulties of installing broadband connections in very remote areas, which is why the £3,400 cap was included in the legislation.

Yet if that cap is so low that it is cutting out vast swathes of struggling households, serious questions need to be asked about the value of the USO for remote homes.