To BT or to not BT is the question for Scotland

Since the 1980’s the UK telecoms regulation environment has been about reducing the monopoly of BT Group and while Ofcom has secured significant changes in the creation of Openreach a decade ago and the recent changes in how Openreach operates it seems there is still a lot more to and Scotland appears worried that the ?600m USO proposals from BT recently will scare off firms who have started to express interest in the 100% superfast project by end of 2021 that is R100 project in Scotland. The message seems to be that like some English councils have already done for the next round of projects BT is off the radar. Details for the R100 project are thin on the ground but we assume in private when discussing with potential suppliers more information on the ambitions and technicalities is made available, the problem is that with Westminster and Ofcom pushing ahead with a 10 Mbps option available on demand to all the UK by the end of 2021 we have two projects heading for a clash.

ISPreview has a copy of lengthy letter[1] from Fergus Ewing, Scotland’s Rural Economy Secretary outlining their worries with the way the USO is progressing and in particular concerns over the recent ?600m of private investment by BT to deliver the USO pledge but without the full letter of the law being used. Scotland has a big interest in the broadband USO since for the UK as a whole it has 1 in 6 of those premises under 10 Mbps currently (137,145 out of 888,860 across the UK) when Scotland only comprises 1 in 11 of the total number of premises. The Superfast Scotland project is within a month of meeting its 95% fibre goal by the end of 2017, and is likely to hit 95% of Scotland with access to a 15 Mbps or faster service[2] by the end of 2017.

Scotland still has indications that parts of the BDUK roll-outs will be FTTP based, but the project is still delivering VDSL2 in large volumes, the FTTP generally does not appear until the final stages of the major phases. So while some in Scotland may be worrying about the USO extending BT’s monopoly, the areas like the many islands off the Scottish coast have now almost all seen a superfast foothold created by evil BT as part of its superfast contracts in Scotland and these bridgeheads mean many alternative local providers will have a harder battle winning enough customers to support the roll-out of services to the much harder areas. The reality is that there are many factors at play with the broadband USO and until the gainshare mechanism of the many BDUK projects have finished delivering getting an accurate idea of the number of premises that may come seeking USO intervention is a big guess, by the end of 2017 the guess should be reasonable and late in 2018 it will be pretty accurate but if as hoped superfast roll-outs deliver 97% superfast coverage across the UK and there is still an additional tail of people getting 12 to 23 Mbps from VDSL2 the number requesting a USO service may be down to such a low volume that full fibre connectivity even if costing ?3,000 to ?5,000 per premise could be a good way of solving USO concerns for a few decades and avoiding the complications of speed escalators.

This may seem fanciful but it seems an ambition worth considering and planning for.

The nuances and interlinked nature of what has happened to Openreach, its ongoing FTTP consultations, the broadband USO and continued trickle re-investment of gainshare from the BDUK projects is a vastly complex puzzle and no one size solution or deadline fits them all, perhaps the solution is to offer the devolved administrations the option to opt out of the Westminster/Ofcom broadband USO and create their own local legislation based around the core framework from Westminster.


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