Openreach, the engineering arm of BT, has detailed its offer to the government to vastly improve broadband speeds across Britain without the need for universal service obligation to be introduced.
Openreach’s offer, called the UBC (universal broadband coverage), will cost the company between £450m and £600m. It expects to claw back the money through higher wholesale charges to rival broadband companies using its network, which could raise prices for consumers. It said the offer is also dependent on Ofcom easing regulation in the wholesale access market.
The government had planned to introduce a universal service obligation for broadband access. It opened a consultation to consider BT’s alternative offer, which is legally binding. The company argues its offer will deliver faster speeds and more fibre to rural areas than the government’s original plan.
The UBC will see 98.5 per cent of homes and businesses connected to a fixed broadband line by 2020 and 99 per cent by 2022. It will connect some of the remaining house via a fixed-wireless network with the residual 0.3 per cent of premises hooked up to a satellite service.
Plans to develop long-range VDSL networks, which speed up copper lines, have been put on hold despite BT’s previous trials and publicity around the technology, which it called “a great piece of British engineering”.
Some of BT’s rivals have complained that the company has done a backdoor deal with the government to avoid the introduction of universal service obligation, a move that will cost consumers in the form of higher prices.