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Summary and assessment of Ofcom USO Funding Statement 22 May 2020

This consultation started on 5 Nov 19 and closed on 7 Jan 20. On 22 May 20, Ofcom issued its “Statement on the funding process and the making of funding regulations under section 71 of the Communications Act 2003”. This Statement followed Ofcom’s earlier decision (2018) that BT and KCOM are the USO providers in the UK.

Ofcom has decided that it is the responsibility of BT/KCOM to prove that the USO burden is unfair. Until they do that, there is no source of funding of the USO outside the 2 USO providers.

INCA’s Policy and Regulation Service’s assessment is that given the overall size of the potential USO costs and the fact that BT would have to perform extensive modelling to prove the undue burden and then contribute the lion’s share towards a USO fund, should Ofcom establish it, it seems unlikely that BT will pursue that route. And, therefore, unless this changes, it is unlikely there will be any added burden on INCA Members and other independent operators to fund the USO.

INCA will continue to monitor the situation on behalf of its Members.

A more detailed Summary and Assessment is available below for INCA Members.

The challenge remains to make INCA Member networks relevant to enabling BT to provide USO in those areas where an INCA Member network is available. Otherwise BT will be obliged to provide USO over other infrastructure which may need to be built. Ofcom's WFTMR and INCA's response is highly relevant to this.

The work of INCA’s Switching and Wholesale Special interest Group – the SWSIG – is examining this area and will be of interest to any INCA Member who may be impacted by this. You can find out more here.

On a wider policy note, you may also be interested in the INCA Policy & Regulatory Service which is intended to support those INCA Members who do not have a full time public affairs function as well as add resource for those Members who have specific projects in mind. More information is here.