BT demands 'new plan' as Ofcom investigates USO price hikes

BT has hit out against Ofcom’s decision to launch an investigation into its compliance with broadband USO rules, calling for a new plan for connecting hard to reach areas.

To put it simply, the UK regulator is looking into whether BT is inflating the cost for homeowners when it quotes for the provision of a 10 Mbps broadband connection, as laid out in universal service obligation rules in 2018. The rules state that consumers has the right to request a service of 10 Mbps (download speed) and that the USO provider – BT for most of the country, KCOM in Hull – must quote for the installation of such a connection. If the quote comes in lower than £3,400, the homeowner is not required to pay for the work. If it is higher, the homeowner can choose to make up the difference.

The national press has been peppered with stories of massive quotes from BT since the scheme came into force in March, with some premises being told that the installation of a high-speed broadband line would cost in the hundreds of thousands of pounds.

Naturally, some areas of the UK would be extremely costly to connect using fibre, and Ofcom recognises this, but it is not convinced BT is playing fair in all cases.

“While the cost of some connections will be high due to the remoteness of many of these premises, we are concerned that BT may not be complying with the regulatory conditions correctly where it assesses excess costs for a given connection. This could result in some customers’ quote for a connection being higher than necessary,” Ofcom said.

BT is incensed at the accusation.

“We strongly disagree with Ofcom’s assessment of our delivery of the USO. We are disappointed that they have opened an investigation when we’re fully committed to working with both Ofcom and the Government to find better ways to connect the hardest to reach,” the telco said in a canned statement emailed to Telecoms.com.

BT acknowledges that it has sent effectively unaffordable quotes to some seriously remote properties and insists it is working on ways to enable communities to share the cost of connection under the USO, which would in turn bring down costs for individuals. “We will launch this as soon as possible,” it said. However, it believes the scope of the USO is not adequate for the 0.5% of the UK in the most difficult locations.

“Alongside the existing USO programme, we need a new plan for the hardest to reach,” the telco said. “This has to be a shared endeavour, across industry and with Government and Ofcom. We’d like to see a task force set up, with cross-party support and use our experience and expertise to find a new solution. Options could include alternative technologies, such as satellite (including exploration of the potential role of OneWeb) as well as clarity on the Government’s £5bn funding for rural full fibre.”

BT may have a point with regard to the limitations of the USO, but that doesn’t give it the right to bump up its quotes…if Ofcom’s investigation shows that that is indeed what it has been doing.

We should have an answer fairly soon. The regulator says it will gather evidence with a view to determining its next steps before the end of the year.