Colour us shocked: ISPs not that keen to sign up for Universal Service Obligation

'Either the government pays for it, or consumers do'


Telco regulator Ofcom has admitted that internet service providers are not particularly eager to sign up to the government's Universal Service Obligation.

The USO is intended to give everyone the legal right to request 10Mbps by 2018.

However, in its summary of responses for its call for input to the plans earlier this year, Ofcom said providers were lukewarm about taking on the role.

It said: "We note that, although the majority of respondents called for a competitive designation process, most industry stakeholders did not express a willingness to become a designated USO provider.

"This could affect the degree to which there is competition in the designation process, although industry may be more willing to come forward for designation once the specification and scope of a USO are clear."

The regulator said that it considers that commercial broadband delivery has not, to date, succeeded in meeting the needs of a significant number of UK households and is unlikely to do so in the near future.

The USO could be funded using public funds, a levy on industry, or a combination of the two.

"The majority of public sector stakeholders were in favour of an industry-funded mechanism. This is also the Government’s preference for funding the USO.

"However, the majority of industry and some consumer and business groups argued that public funding would be more appropriate," it said.

In response to today’s publication of Ofcom’s Universal Service Obligation call for inputs, the Internet Service Providers Association warned that the USO could lead to rising consumer prices and potential market distortions and so the government should pursue a "safety net" approach that provides access to core digital services.

The body is arguing that highly targeted public funding for the most rural areas is the best way to deliver the USO and calling on Ofcom "to recognise that a new broadband levy on all providers is anti-competitive, could hinder network rollout and lead to higher prices."

Responding to the latest developments, ISPA Chair James Blessing said: “ISPA supports the principle of broadband universality and feels a 'safety net' for the hardest to reach areas is the right approach, but given the clear socio-economic benefits of broadband, public funding should help fund a USO.”

The 115 responses received by Ofcom will be taken into consideration in our forthcoming advice to government. That is due to published by the end of this year. ®

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