USO now in effect: What will it mean for the networking sector?

USO now in effect: What will it mean for the networking sector?

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While most of the UK's infrastructure sector has been focusing on essential repair and maintenance works during the coronavirus pandemic, as well as continuing with the rollout of ultrafast gigabit-capable services, efforts to ensure decent connectivity at the other end of the market should not be overlooked.

One of the flagship schemes to close the UK's remaining broadband gaps is the Universal Service Obligation (USO). This has been in the works for some time, but it finally went live in March - although the launch was somewhat overshadowed by other events.

However, it could mean that some of the remaining not-spots - the 1-2 per cent of premises still unable to get a decent broadband connection - can be brought up to speed, regardless of commercial considerations.

What are the criteria for USO connections?

While several providers initially expressed interest in participating in the USO, only BT and KCOM ultimately signed up, perhaps reflecting some of the difficulties in rolling out connectivity to these last remaining not-spots.

However, it's important to remember that while anyone who doesn't meet the minimum requirements of USO now has the right to request an upgrade, this does not necessarily mean they will automatically get it. 

If, for example, there are already plans to upgrade lines through a publicly-funded scheme within the next 12 months, or there are 4G mobile broadband options available, the USO does not apply.

For those that are eligible, the USO sets out a series of minimum specifications that providers will have to meet. These include:

  • Minimum download sync speed of 10Mbps
  • Minimum upload sync speed of 1Mbps
  • Maximum contention ratio of 50:1 (50 customers sharing a single line)
  • No more than 200ms of latency for speech applications
  • A technology-neutral design
  • Uniform pricing for consumers

Who's paying for broadband improvements?

The cost of the rollout is set to be funded by the providers themselves, but only up to a point. If work to reach a property is forecast to cost more than £3,400, the property owners may be required to pay for the excess costs. 

However, Ofcom has stated that where network infrastructure can be shared, build costs should also be shared between premises to determine whether the cost of provision to an individual property would fall below £3,400. 

For example, the regulator states that if a cabinet serves 100 premises and the cost of deploying FTTC is £100,000, then at expected consumer take-up of 70 per cent, this would equate to a per-premises cost of £1,429 - well within the limits under which the provider must fund the work.

Is 10Mbps enough for today's needs?

The 10Mbps requirement may raise a few eyebrows, as it would still leave premises well below what's considered a decent connection. While it may be just about enough for common activities such as video streaming - provided users aren't looking for 4K quality or want to manage multiple users at once - as data volumes grow, it could still leave premises lagging behind.

One reason for this decision may be a financial one, as a faster minimum speed with greater increase costs, which consumers would end up paying for. It could also end up disrupting competition if USO providers are subsidised for significantly faster services.

Another reason for the relatively low threshold may be to allow a wider range of technologies that allow providers to avoid complex and expensive work. It's been reported that some applicants to the scheme are being pointed in the direction of mobile broadband connections based on 4G rather than investing in fixed broadband, which would offer greater reliability and more potential for future upgrades. 

However, this isn't the case everywhere - and many rural locations that fixed-line fibre hasn't yet reached also lack good 4G signals, which may force providers to rethink such a strategy.

What will it mean for the industry moving forward?

At a time when the focus is on gigabit-capable broadband and full fibre - and with the government having set a target of ensuring every property in the UK can access speeds of 1Gbps by 2025 - the USO's 10Mbps target may be seen as a stopgap measure. However, it could help infrastructure providers identify and focus on areas that have been overlooked and help lay the groundwork for future improvements.

While the challenges of bringing high-speed connectivity to rural and remote areas are well understood, and have been a key priority for the next stage of rollouts, there will remain a few areas - including urban and suburban premises - that have missed out of tools like fibre for a variety of reasons, such as regulatory barriers and difficulty gaining access.

The USO may help providers overcome these problems and ensure that when the next generation of broadband connectivity is ready to be deployed, there will be fewer locations where firms have to build from a standing start.

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