Universal Access to Broadband in the UK

Communications Management Association

Universal Access to Broadband in the UK | A Paper by CMA | 15 March 2007


Background

“Universal service" means an obligation imposed on one or more operators of electronic communications networks and/or services to provide a minimum set of services to all users, regardless of their geographical location within the national territory, at an affordable price.

“Universal Access” has no formal definition in legal or regulatory circles. It is used to indicate access to broadband (of some speed) by anyone, living anywhere. However, it is not clear how or by whom connectivity would be provided, nor who would fund the provision. Ofcom’s current Discussion Paper on next generation access, and an imminent formal consultation, are designed, inter alia, to address such issues.

It is important to note that the formal definition of universal service includes the notion of access to services, but the form of such access is not specified. This lies at the heart of the matter.

“Universal Service” is defined by Directive 2002/22/EC on universal service and users' rights relating to electronic communications networks and services.
In the UK DTI is the formal Universal Service authority, not Ofcom. However, DTI delegates to Ofcom most of the duties under the Directive and does so by the universal service order. One such duty is to ensure “availability” of the universal service. (The Member States must ensure that the telecommunications services are made available to all users in their territory, regardless of their geographical location, at a specified quality level and an affordable price). Ofcom has not changed the old (1998) Oftel definition of “availability” as providing basic telephony and dial-up access to internet-based services at a minimum speed of 28.8kbps.

Section 65 of the Coms Act 2003 states:
(1) The Secretary of State must by order ("the universal service order") set out the extent to which the things falling within subsection (2) must, for the purpose of securing compliance with Community obligations for the time being in force, be provided, made available or supplied throughout the United Kingdom.
(2) Those things are-
(a) electronic communications networks and electronic communications services;
(b) facilities capable of being made available as part of or in connection with an electronic communications service;
etc.

The Schedule to the current universal service order says:
(1) At least one designated universal service provider shall meet all reasonable requests by end-users for connection at a fixed location to the public telephone network and for access to publicly available telephone services at a fixed location.
(2) The connection referred to in sub-paragraph (1) shall be capable of allowing end-users to make and receive local, national and international telephone calls, facsimile communications and data communications, at data rates that are sufficient to permit functional Internet access, taking into account prevailing technologies used by the majority of subscribers and technological feasibility. (CMA’s italics)


Universal Access (to broadband)

Universal Service is primarily associated with “users’ rights” and consumer protection. Universal Access (to broadband) is more closely associated with the wider economic benefits to society.
Previous debates on universal access to broadband have taken place in the shadow of discussions on Universal Service. Given the focus on “availability” this has been an entirely logical approach. However, universal, dial-up access (at 28.8kbps) is a concept that has its roots in the days of the monopoly provider and its relevance is fading fast. The Ofcom report (Dec 06) into the “Wireless Last Mile”, Part 1, concludes with the comment:
“We also noted that the USO as it stands at 28kb/s may in fact not define the new digital divide:
Any bandwidth/latency offering below the cut-off for new, future services would be effectively no useful connection at all. Hence a new service driven requirement (probably based on some large screen display service, e.g. HDTV) could set the effective future digital divide for subscribers.”
Moreover, the rationale for extending the scope of universal service to include broadband derives from public policy objectives that are enshrined in the Lisbon Agenda and the Commission’s subsequent implementation programme, “i2010”.
It is now argued that only clear separation of the concepts of Universal Service and Universal Access seems likely to promote transparent and uncluttered discussion.

Recent Developments

In a “Communication” of 24 May 2005, on the review of the scope of universal service, the Commission examined whether the scope of universal service should be changed in the light of recent technological, social and economic developments. In this the Commission analysed in particular mobile communication services and broadband services and concluded that ;
“… the regulatory data complemented by market-based analyses show that only a small, although rapidly growing, minority of European consumers currently make use of broadband services. As the figure of 6.5% actual take-up per head of population shows, the EU as a whole does not meet the criterion of use of the service by a “majority of consumers”. Broadband has not yet become necessary for normal participation in society, such that lack of access implies social exclusion. At the present time, therefore, the conditions for including broadband services within the scope of universal service (as set out in the Directive) are not fulfilled.”
However, that same Communication asked:
“Taking into account existing and expected technological developments, should universal service at some point in future separate the access to infrastructure element from the service provision element and address only access to the communications infrastructure, on the grounds that competitive provision of services, (e.g., telephone service provided using Voice over IP) will ensure their availability and affordability?”
However, the current view taken by the Commission (Apr 2006) remains:
“bringing mobile and broadband internet services to users is best left to the market – except where structural problems such as geographical remoteness justify specific public investment "to help bridge the broadband gap."
BUT - While consumer organisations specialising in electronic communications supported the Commission’s conclusions, a number of consumer and other organisations felt that the review criteria of the Universal Service Directive or the Commission’s assessment were too restrictive. They advocated extending the scope of universal service to mobile and/or broadband services. The Commission decided in March 2006 to take account of some of the remaining concerns by its "Broadband for all Policy".
The Commission has said that it will issue a “Green Paper” on universal service in July 2007.

The Office of National Statistics report “Internet connectivity, December 2006” states:
Nearly eight out of ten connections to the Internet are now via broadband. In December 2006, broadband connections accounted for 79.2 percent of all Internet connections, up from 75.8 per cent in September 2006. This is according to the latest update to the survey of Internet Service Providers (ISPs).
Dial-up connections continued to decline and accounted for 20.8 per cent of all Internet connections in December 2006.
As dial-up subscriptions decrease, there is less interest in measuring the different types of dial-up, and more in broadband. Therefore, with effect from this release, data on metered and unmetered dial-up subscriptions have been discontinued. These have been replaced by data on broadband connection speeds. The three categories of broadband connection speed used are; less than or equal to 2 megabits per second; greater than 2 megabits per second and less than or equal to 8 megabits per second; and greater than 8 megabits per second.


Action Required

It is requested that DTI give consideration to:
(a) the merit of convincing the Commission that it should allow Member States to implement their own universal access to broadband policies, uncluttered by the consumer protection focus of the Universal Service Directive.
(b) the need to update the wording in the Schedule to the UK’s universal service order: “at data rates that are sufficient to permit functional Internet access, taking into account prevailing technologies used by the majority of subscribers and technological feasibility” . “Functional Internet Access” is a term that is no longer entirely relevant in today’s market, where, for example, VoD supplied over the telco’s own, private network goes nowhere near the internet. And, as Ofcom’s own report into the Wireless Last Mile (above) states: “Any bandwidth/latency offering below the cut-off for new, future services would be effectively no useful connection at all”. “The majority of subscribers” is a phrase that does no service to the case for e-inclusion. However, it does suggest that once the number of broadband users exceeds 50%, then Ofcom has a duty under the universal service order to take this into account when reviewing the need to upgrade data rates. The ONS report of Dec 06 (above) suggests that the 50% figure has long since been exceeded.

CMA, 15 March 2007