Insights Ofcom opens investigation into BT’s compliance with its obligations as a broadband universal service provider


In March 2018, the UK Government introduced legislation for a broadband “universal service obligation” (USO), which gives homes and businesses the right to request a decent broadband connection. Ofcom says that it has worked to implement the USO “as quickly and efficiently as possible”. Following consultation, it designated BT as a Universal Service Provider and imposed regulatory conditions setting out how it must provide USO connections to eligible consumers.

Under the legislation, customers can request a USO connection from BT if they cannot currently receive affordable broadband services with speeds of at least 10 Mbit/s and upload speeds of at least 1 Mbit/s (among other technical parameters). Upon receiving such a request, BT must assess the costs of providing that connection and, where this is less than £3,400, BT must provide the connection. Where the assessed costs exceed that amount, BT must also provide the connection if the customer is willing to pay the excess costs.

Ofcom’s conditions set out how BT should assess the costs of providing a connection. In particular, as required by the legislation, BT must take into account that costs may be shared among other customers who could use the same infrastructure. BT must apply this methodology to calculate the costs of each requested connection.

While the cost of some connections will be high due to the remoteness of many of these premises, Ofcom is 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 will now gather evidence, and it expects to determine next steps before the end of 2020. To read Ofcom’s announcement in full, click here.